Service Innovation: Intrinsically Holistic?
Process is the Product
Ed Furash, a well-know bank consultant, was quoted by a banker I interviewed in my NSD research as saying “In financial services process is the product.”
One of the problems with applying NPD models and ideas developed for goods firms to NSD may be that NPD has typically differentiated between product innovation and process innovation.
When automation allows a washing machine to be built in 2 hours rather than over two shifts, quality or price may ultimately be impacted. When online tools allow a mortgage to be granted in one hour rather than one week, the service itself has been dramatically changed.
Those of us interested in service innovation must take a more holistic approach and view innovation in a broader context.
Business Model Innovation is Intrinsic
Helder Sebastiao, professor of entrepreneurship at the University of San Diego, sent me a note yesterday in which he noted that a central theme through the postings in newservicecreation is that in service innovation, unlike NPD-goods, “business model innovation is intrinsic“.
It may be that the key difference between service innovation and traditional NPD-goods is that service innovation is more holistic:
Process is the product
Business model innovation is intrinsic.