An Integrative Perspective to Service Innovation

Duration:	01.10.2006 - 30.09.2008
Project manager:	Toivonen Marja
Research area:	Company Innovation and R&D Operations
Research funders:	The National Technology Agency (Tekes)

General information

An Integrative Perspective to Service Innovation (IPSI) is a theoretically oriented research project, focusing on service innovation. It extends the research conducted empirically in the Knowledge-Intensive Business Service Innovation and Innovation Networks (KIBSINET) project into the area of theoretical issues. The purpose of IPSI is to create grounds for such an approach that would take into consideration both the central role of the customer and the perspective of the service provider when modelling service innovation. First and foremost the project tries to reconcile the views of the theories of service marketing and service engineering, which usually have been developed apart from each other within different schools. This integrative view is supplemented with ideas from other relevant service theories. The project is divided into three parts explained in detail below. The first step is to explore the existing service models and develop them further into a model suitable for innovation analysis. The second step is to define service innovations as outcomes, and examine their dimensions and classifications. The third step is to analyse the different processes which can lead to innovations in services.

1) Modelling the service - the target of innovation

Services differ from manufactured goods in that they are inseparable from their production context. A good starting point for the modelling of services in a way which takes this peculiarity into account and thus enables a service-specific innovation analysis is provided by the Nordic school of services marketing. According to it, services include three basic components: the service concept, service process and service system. Service concept refers to the description of the customer’s needs and how they are to be satisfied. The content and structure of the service are specified here, including, for instance, the specification of the core service and supporting services. The service process is the prototype for every customer process and describes the chain of activities that must function properly when the service is actually produced. The service system constitutes the resources that are required by, or are made available to, the service process in order to realise the service concept. It includes components like the service company’s staff, the physical/technical environment and the organisational structure; also customers function as a resource. In the IPSI study this model is developed further so that it enables the identification of the ‘loci’ of innovations to be examined in the next stage of the study.

2) Defining and describing service innovations as outcomes - dimensions and classifications of innovations

When defining a service innovation, the relationship between innovation and gradual development is one important issue that needs clarification. The repeatability of a renewal is also a topic that must be discussed as an important criterion of innovation in the service context - tailor-made services are often incorrectly interpreted as innovations. Further, a more detailed analysis will be included regarding the question: to whom a renewal must be new in order to be an innovation. In the dimensions of service innovations the following three questions are examined:

1. in which different elements of a service can an innovation happen
2. in which different ways can a service be renewed
3. how should the degree of newness be evaluated

The first question relates to the service model. The second question relates to improving, adding, combining or clarifying particular elements and their relationships. The third question refers to the radical vs. incremental axis. Based on the definition and the analysis of different dimensions of service innovations the IPSI project strives to classify service innovations in an attractive way.

3) Identifying the different processes which can lead to innovations in services

In the innovation process literature, systematic stage-gate models have gained most popularity. The use of these models has been identified also in some service sectors. However, innovations can be created and generated also through practices which do not include specific detailed planning in advance. In services, the development of ideas into innovations is often seen happening parallel with the service delivery process and these two are difficult to separate. In the KIBSINET- research project the service innovation processes are preliminarily divided into three different groups:

1. the traditional state-gate model
2. the model of rapid application, where an idea is implemented directly in the market and if it takes ‘a flying start’, it is then improved, developed and elaborated upon
3. the practice-driven model where the emergence of an innovation is noticed afterwards

This division will developed further during the IPSI project and compared with other divisions of related research. It is possible that also other process types will be brought forth along with the project.

Project personnel