What is Service Design? Approaches, Development Process

What is Service Design?

Service Design is the process of designing and developing services that meet the needs and requirements of customers. It is a multidisciplinary approach that involves various stakeholders, including customers, service providers, designers, and other experts.

The goal of Service Design is to create services that are user-friendly, efficient, and effective, and that provide value to both the customers and the service provider.

Concept of Service Design

In literal terms, design is a plan or drawing used to indicate or show how a particular object such as building, garment, machine, product or service will look and/or will function. In case of services, service design refers to a plan or drawing showing a detailed layout of how a service will be delivered to customers.

The term service design was first used in early 1990s by Bill Hollins, who is a pioneer in the field of service design. He started offering ‘service design’ service to organisations that were unable to do it themselves.

Over the years, continuous research in the field of service design led to the establishment of organisations that offer service design services. Generally, organisations that donot have an internal capacity to design their own services hire service design consultancies/organisations. An example of such an organisation is Service Design Network (SDN).

According to SDN, service design refers to an activity of planning and organising people, infrastructure and material components of a service in order to improve interaction between a service provider and customers.

At a Service Design Seminar held in October 2004, a participant Jenny Winhall defined service design as a process across the four D’s -discover,define, develop and deliver. Service design involves understanding the customer, organisation and market, developing ideas, translating them into feasible solutions and implementing them.

Service design constitutes a crucial part of the overall service development life cycle. It is an on-going process that involves components, workshops and projects to introduce newservice practices intoorganisations and improve the overall quality of services. Eventually, service design adapts to organisational needs, which is further translated into business structures and processes.

Most organisations keep on innovating, developing and improving services by continuously modifying its service design as per the requirements an organisation’s stakeholders.

Modifications are generally made by collecting ideas through interactions with stakeholders and by taking inputs from various disciplines such as ethnography, consumer research, product design, industrial design, service marketing and corporate strategy.

Any service designed by an organisation needs inputs from various people. For example, consider the services of the Delhi Metro.

Architects and interior designers build stations; graphic designers develop various boards and signage; metro rails are developed by specialised engineering organisations; programmers and designers develop token generation and other software required by the AFC gates; and security is provided by national security agencies such as CISF.

The following are some principles of service design that organisations must adopt while designing a service:

• Services are designed after taking into consideration various factors such as purpose of service, expected demand for the service and the ability of the service to satisfy customers.
  
  
• The needs and requirements ofcustomers are analysed before designing a service. For example, OlaShare service was designed and developed after the company observed that some people feel that the usual charges of Ola Cabs are high and it could be manageable ifcharges are shared between two or more people travelling on the same route.
  
  
• Services are designed so as to deliver maximum value to the customer.
  
  
• Feedback of customers and inputs from the employees are taken into account before services are designed.

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Approaches to Service System Design

Each service has its own unique features. Thus, the approach applied for each service differs as per the nature of service. However, it is possible to formulate a generic approach for service design. Let us discuss generic approaches to service system design.

Production Line Approach

Under the production line approach, most work processes are automated; however, there are certain areas that require human intervention. Workers are trained and skilled for providing specific services or performing specific tasks.

This approach is usually followed in the manufacturing sector. However, it can also be applied to services. A service organisation that adopts this approach can have a competitive advantage and cost leadership over its rivals as core processes of services are integrated with technology and customers can avail services without visiting the location of the service provider.

This speeds up the overall service delivery process. One such example ofa production line approach to service is ATM where customers can withdraw money or avail various otherservices without visiting the bank.

Under the production line approach, services are standardised. For example, whether you are sitting in a McDonald’s outlet at New Delhi or at Bangalore, services provided by McDonalds will be the same. Under the production line approach, emphasis is given on controlling the process.

A big task is broken down into smaller parts and employees with specialised skills deal with each part individually. The employees are skilled and trained to do a particular function only. The employees have to perform their function in a pre-defined manner. They are not empowered or allowed to customise their function. Thisfacilitates consistent and uniform service delivery.

Customer as a Co-producer Approach

Under this approach, customers can customise the required service(s) as per their convenience. Usually, customers and the service provider both prefer self-service activities as it leads to savings of money and time.

Using this approach, the degree of customisation can be adjusted as per customers’ requirements. For example, food outlets such as McDonald’s have a policy of self-service wherein customers have to give an order and make payment at a counter where they get a printed slip.

An LED board displays the order number that has been prepared and the customer can collect his order from the counter after producing the slip. In this way, this approach helps in reducing operating costs.

The main advantage of this customer as a co-producer approach is that customers generate content that indirectly serves as an advertisement for the service provider. For example, a spa owner builds an exclusive and unique entrance and waiting area.

The customers are likely to take pictures at such places. These pictures are put up on social media and it may likely attract newcustomers.

Customer Contact Approach

A service delivery system is usually made up of various operations. Under the customer contact approach, operations are categorised as high-contact and low-contact operations. The operations that require low or no customer contact are performed at the back end.

High-contact operations are performed at the front end with the involvement of customers. For example, an event management company holds conversation with customers in the beginning to understand their requirements so that it can render services accordingly.

These requirements may include the design of entrance gate, location selection, the type of food to be served, etc. These requirements are fixed after the consent of customer; however, when it comes to the implementation of the service, it is done entirely by the service provider.

For example, a customer directs the service provider that there should be a special cheese and mac dish. In such a case, the customer has given instructions but will not help the service provider in preparing the same.

Information Empowerment Approach

Technology touches our lives on a daily basis. Most services require the use of IT; however, the degree of use may vary. Availability of technology empowers both employees and customers by providing accurate information.

Employees can maintain a record of customers and their needs with the help of record keeping software and database and can render services accordingly.

Similarly, IT also helps customers. For example, courier companies provide the status of shipments on their websites, which helps customers to track their shipments and have a fair idea when their products will be delivered to them.

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Service Development Process

A new service is developed through a staged process involving various steps. This process is called service development process or service development life cycle. The steps involved in the process are discussed as follows:

Determine the Requirement of a New Service

In this step, the service provider assesses whether there is a need to provide a new kind of service to customers or not. A new service can be developed in the following conditions:

Environmental Changes

The market and the environment keep changing. Therefore, under such circumstances, it may become essential to offer new services. For example, a few years ago the people were happily using the 2G Internet services; however, after the advent of 3G Internet services, customers started demanding 3G services from their respective operators.

Now, we also have 4G services in place. This was a case where providing new services became essential. However, there may be instances where the environment and changing circumstances bring up the possibility of developing and offering altogether new services.

For example, with the rise in the income of most people, spas and grooming centres are also developed for pet animals.

Changes in the Business Model of the Service Provider

At times, it becomes necessary for a service organisation to make revisions or entirely change its services because of changes in its business model. For example, when multinational cab aggregators such as Olaand Uber entered the Indian market (in 2011 and 2012 respectively); they focussed more on tying up with cab drivers in order to develop a huge fleet of cabs.

For this, they offered very lucrative incentives to cab drivers. Recently, Ola changed its business model and became customer-centric which led to high penalties and lower income for cab drivers. This also led to nation-wide protests from cab owners.

Understand and Analyse Service Specifications

After the service provider identifies the need for a new service, it is essential to gather information regarding the expected characteristics and functionalities of the new service. The information is collected by holding discussions with existing and prospective customers and employees of the service organisation.

For example, the owner of a beauty salon gets to know about the requirement of a new hairstyle through the employees working at the salon. This is because the employees are in direct contact with customers. In such a case, the owner will himself/herself get the training of that particular hairstyle and train his/her employees further.

The service characteristics should be recorded in a clear, specific and unambiguous manner. The value addition that the service would provide to the customer is defined clearly.

Conduct Feasibility Study for the Service

Under this stage, it is determined whether it is feasible to offer a prospective service. The feasibility needs to be checked on various grounds such as financial feasibility, technical feasibility, political feasibility, operational feasibility, etc.

For example, assume that a person wants to open a centre for teaching Italian cooking in a rural village of India.

This service idea should be dropped immediately because the rural population of India still abides by Indian cooking and the rural people are yet to develop a taste for other countries’ dishes. Secondly, ingredients required for Italian cooking are not so readily available in rural areas.

Develop Service Design

After a feasibility study is conducted, the service system design is developed and rules are set as to how the entire service operation will be broken into manageable suboperations and other minute details. You have already studied about service system design in the previous section.

Service Testing

After the service design is decided, the service provider prepares for a trial run of services. In this stage, a platform is created in order to simulate the service as if they are performed under real-life conditions.

The main advantage of simulating a service is that all possible defects and other deficiencies in service design can be identified and worked upon (removed or reduced) before a service is actually provided to customers.

Service Rollout

After successfully testing the service, it is offered to customers. Before rolling out, the service provider needs to decide about the timings, pricing and other aspects ofthe service.

Post Rollout Monitoring

Once the service provider starts offering the service, he/she needs to continuously monitor the service and keep taking feedback from customers and employees on service response. This ensures that the service provider stays competent in the market.

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Service Blueprinting

Consumers and markets demand both products and services. Moreover, services are more crucial and generate major part of the Gross Domestic Product (GDP) of India. In 2016-17, the service sector accounted for 53.66% of total Gross Value Added (GVA) of India. Services dominate national and global economies.

Therefore, it becomes imperative to bring innovation into the field of services. This can be achieved with the help of innovative methods, techniques and R&D. One such technique of bringing innovation in services is service blueprinting.

A service blueprint refers to a diagram or pictorial representation of all aspects related to the service and its delivery from the viewpoint of the organisation and customers. It represents howdifferent components ofa service are related to each other along with different contact points.

The contact points are the persons/areas from where a customer gets in touch with the organisation. For this, a number of activities are to be performed such as establishing clear objectives, generating ideas, developing the concept, making a service design, prototyping, taking customer feedback and so on.

A service blueprint maps all interactions happened between an organisation and its customers in a chronological manner. A service blueprint helps in the design and redesign of the service development process.

Using a blueprint, a service can be broken intological components. It is important to understand logical components in isolation as well as their role and value-addition in the entire chain. The blueprint also depicts steps in service processes, the means by which processes are executed and the evidence ofservice as consumer experiences it.

Components of Service Blueprinting

There are five components of a service blueprint, which are explained as follows:

• Customer actions: This component includes a description of all actions taken by a customer in a chronological order from start to finish. For example, a customer visits a restaurant and places an order. This is a customer action.
  
  
• Onstage actions taken by employees: This component includes actions taken by front-end employees during the course of service delivery. In the above example, when service employee responds to the order placed by the customer, it is an on-stage action taken bythe employee.
  
  Each time an interaction between the customer and the employee occurs; it leads to a positive or negative experience for the customer.
  
  While getting the desired service, if the customer collects a majority of positive experiences, he/she will develop a positive image of the service organisation whereas if he/she collects the majority of negative experiences, he/she will develop a negative image of the service organisation.
  
  
• Backstage actions taken by employees: This component includes those actions of employees that are not observed directly by customers. Backstage employees usually provide services, which are delivered to the customer or are required for delivering the final service to the customer.
  
  In the given example, chefs preparing the dish for which the order is placed by the customers are performing backstage actions.
  
  
• Support processes: For delivering services to a customer, employees need help of certain support processes in the absence of which service delivery and quality suffer. Usually, employees who do not come in contact of customers directly provide support services.
  
  For example, in hospitals, patients are served food according to their prescribed diet. The food is prepared by chefs in the canteen staff and is served by the delivery staff. In such a case, chefs are not in direct contact with customers.
  
  
• Physical evidence: It refers to the seventh P of the service marketing mix. According to Booms and Bitner, “physical evidence refers to the environment in which the services are delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.” For example, retail shop, bank branch, hotel premises, etc.

Example of Service Blueprinting

Let us understand the concept of service blueprint with help of an example. Assume that a service provider wants to offer a new coaching service. The service provider offers three types of services namely grade A coaching, grade B coaching and grade C coaching.

Each service has a different price. Before going live and offering services to customers, the service provider develops a blueprint ofthese services. The elements contained in the blueprint include customer actions, onstage actions, backstage actions, support processes and the physical evidence.

Customer actions in the given services include coming into the centre and seeking registration for admission by paying the required amount. After taking the admission, students (customers) are given a timetable. Coaching is provided to students every day as per the plan. In the classroom, they meet teachers.

The interactions of students with the reception staff and the teaching staff constitute the onstage interactions. Many faculty members actually prepare the study material and arrange for various facilities such as projectors. These staff members do the backstage work and are responsible for providing support processes.

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Process Design and Improvement

Service process design forms an important part of the service development process. It refers to an activity under which a service provider determines the workflow, equipment and materials required along with the implementation requirements for a particular process.

To design a service process, various tools are used such as flowcharts, process simulation software, service blueprint, etc. However, in spite of taking all precautions, a service provider may face certain glitches in the service process.

To resolve those glitches, service process design improvement is put into place. There are various methods that can be used to improve service process design such as standardisation and variety reduction, mass customisation and modular design, Taguchi method, and quality function deployment. These methods are explained in detail in the next sections.

Degree of Standardisation and Variety Reduction

Standardisation refers to the absence of variety in a service. The greater the degree of standardisation, the lower will be the variety. Standardised processes deliver standardised services. In case of services, it means that each customer or the item will get exactly the same treatment.

For example, assume that there is a therapeutic centre that provides two types of therapies. Trained therapists deliver one type of therapy and the other type of service is delivered using a therapy machine.

Now, you may easily imagine that customers receiving therapies from two different human therapists may perceive services differently. However, the therapy machine delivers the same kind of service every time.

In the preceding example, you saw how standardisation could be applied to core service processes. However, you must note that it can be applied to other aspects related to the service. For example, you may visit various outlets of McDonalds or other popular food chains.

You will observe that interiors and colour combinations of all the outlets is consistent and follows one theme. By doing this, the service provider tries to create its unique selling proposition.

The main advantages ofstandardisation is that despite the complexity of the service process and irrespective of the service centre a customer is visiting, the components and methods of service delivery remain the same.

In addition, standardisation increases the productivity of service employees, as each employee knows his/her role and responsibility fully well. Lastly, the chances of errors and omissions reduce drastically.

The only disadvantage that comes with standardisation is a reduction in variety. At times, customers are not satisfied with the functions offered with different service options. Moreover, in such cases, they want to opt for a hybrid or new type of service that has few functions from first,second and third type ofservices respectively.

Mass Customisation and Modular Design

Most organisations prefer standardisation because it enables them to produce a high volume of products at lowcost.

However, most customers desire a certain level of customisation. Producing a large variety of products or offering highly customised products to the customer may have several repercussions for the organisation such as having to maintain high level of inventory for increased number of services, decrease in productivity of the staff and profits, increase in operating costs, etc.

For example, if a skin clinic offers two types of laser treatments and each treatment requires a different technology, thereby requires buying different treatment machines. Now, assume that customers start demanding another type of treatment that requires buying another machine, which is quite expensive.

In such a scenario, the service provider will have to estimate whether or not it will be a correct decision to buy the new machine. In addition, the service provider must also estimate if he/she will be able to generate sufficient profits from it.

The problem of standardisation vs. customisation can be resolved largely by using methods such as mass customisation and modular design. In the context of products, mass customisation means that the organisation produces a large number of standardised products and some degree of customisation incorporated into it.

However, to achieve mass customisation in services, there arises a need for direct involvement of customers and service employees. Toeffectively deliver the required service, service employees need to have a thorough understanding of configuration rules.

The modular design approach has been applied in products. In this approach, a final product is made by a combination of different standardised components. Different components are assembled together to form a product. In such a design, if there occurs a problem in the product, the component that is affected can be easily replaced without affecting other components.

The concept of modular design can also be applied in case of services. For example, two customers enter the same hotel at the same time. One customer has opted for a deluxe suite whose rent is5000 per day whereas the second customer has opted for a silver suite whose rent is 3000 per day.

Both the customers will ideally receive the same kind of treatment at thereception area where they are welcomed by the staff. However, after their luggage has been shifted to their rooms and they have checked-in, they are offered services as applicable. For instance, the silver room may not have a Jacuzzi whereas it is present in the deluxe room.

Taguchi Method

In practice, various methods are used to design services for quality. Some of these methods include Quality Function Deployment (QFD, House of Quality), Poka-Yoke (Fail Safing) and Taguchi Methods (Robustness). In this section, you will study the Taguchi method in detail.

Before defining the Taguchi method, you should be aware of the concept of robust design. Aproduct or service is said to possess robust design if it can work under a broad range of conditions without affecting its performance.

Genichi Taguchi was a Japanese engineer who developed Taguchi methods in 1950s-60s. Taguchi methods are a set of statistical methods used to improve product/service quality. According to this approach, it is much easier to design products and services that are insensitive to environmental factors rather than controlling environmental factors.

Taguchi methods make use of parameter design that involves specification settings for the service and the service process. They use conventional statistical methods of experimental design. Using Taguchi methods, major advancement in service design can be achieved quite quickly using a small number of experiments.

Major characteristics of the Taguchi’s approach are as follows:

• Quality is designed into the product
  
  
• Quality standard can be achieved by minimising deviation from the target
  
  
• Cost of poor quality varies as the square of the deviation of the quality standard from its target
  
  
• It is based on the robust design concept

For example, telecommunication companies are now building robust communication systems for Expedited Forwarding (EF) of voice traffic in a differentiated service network using Taguchi robust design methodology.

Quality Function Deployment

Quality Function Deployment (QFD) is a method that translates the voice of a customer into quality characteristics of products/services in order to reach customer satisfaction. It is a planning and quality tool that is used to implement quality considerations of the customer into the design of service. Major aspects of QFD are cost, quality and opportunity.

QFD is based on the analysis of hidden customer requirements such as comfort, safety, luxury, etc. These requirements are first seized which are then translated into service design requirements that are further translated into service process requirements. Services are developed by integrating various components. Different components provide different functionalities in order to satisfy customers.

The QFD methodology is based on the development of a matrix known as the House of Quality. This matrix contains a roof-like structure at its top. The rest of the matrix (house) is divided into various cells (rooms).

VOC refers to the Voice of Customers from which service designers derive the objectives of service design. It defines the ‘What’ of service quality. The VOC should be analysed specifically for three factors namely performance requirements, basic requirements and emotional requirements.

After the ‘what’ of service quality has been demarcated, service developers need to answer the ‘how’ ofit, i.e., how design requirements would be implemented. The relations matrix is a matrix that represents the kind ofrelation that exists between a client’s requirements (what) and design requirements (how).

A sample relationship matrix is shown in Table:

In Table, W, Mand S refer to weak, medium and strong relationships. Empty cell indicates no relation between the respective customer and design requirements. Also note that benchmarking is used for assessing and comparing current services with that of competitors.