Service innovation economics

Service innovation economics

By the end of the day, service innovation is all about revenue, profit, and return on investments. Specifically, each of the research topics new business models, innovation leadership, and service design and customer experience is about detecting correlations and effects.

Identifying direct and indirect effects of various service innovation initiatives

The direct effects of service innovation are linked to cash flow resulting from customer decisions (adoption and repurchase) and changes in customer behavior (change of patronage and adoption). Other effects include firm valuation and firm attractiveness on the talent and labor market. Estimating these effects will be building on research within the field of return on quality (Rust, Zahorik and Keiningham 1995) and later works pertaining to customer equity (see for example Hogan, Lemon and Rust, 2002; Rust, Lemon and Zeithaml, 2004).

The indirect effects are related to any effects from service innovations that impacts productivity or organizational culture. For example will efforts to improve customer experiences through service design have an impact on how the firm is organized. Any transitional changes may have a short-term negative impact on performance before any positive impacts (for example increased efficiency and effectiveness or boost in moral) take place.

Finally, being able to estimate the effects of any service innovation initiative prior to making the actual investments or launching the project is crucial. For this reason we will explore the possibility of developing one or several user-friendly decision support models for this purpose.

The work within this research area will be both qualitative and quantitative. During 2015 we will explore through various conversations with CSI partners their experiences and view pertaining to any direct and indirect effects of service innovation, adequate KPIs to capture the same. We will also make a deep-dive into the academic literature in order to get an overview of the field and to structure our approach.

Stian Daazenko

4.1 Direct and indirect effects of service innovation

Bekk Management Consulting

Activities current year: Establishing project group and identification of cases and planning

Personnel: BMC faggruppe Effektivisering, theme-leaders theme 1, 2 and 3

Participants from service providers: Telenor, DNB, Posten, Norgesgruppen og EVRY.

Stian Daazenko

4.2 Predictive estimations of effects from service innovation initiatives

Project leader BEKK Management Consulting (Harald Kjølner)

Personnel: BMC faggruppe Effektivisering, Tor W. Andreassen, NHH researchers and CSI service providers.