Service I-valuation 2.0

Abstract

The objective of the project Service I-valuation 2.0 is to enhance the scientific knowledge base of service innovation evaluation to enable companies to exploit service innovations in a more efficient way. Therefore, the project aims at developing a comprehensive framework for research in the field of service innovation. In addition, specific topics in the field of evaluating service innovations are covered. Among these are the analysis and identification of service innovation success factors, suitable methods for collaborative idea evaluation prior to market launch, as well as the implementation and assessment of these methods in a prototypical IT system. With this IT system in place it is possible to assess the usability and results of different evaluation methods.

Research Picture

Project Description

Motivation

There is no doubt that the service sector is the most important and fastest growing business sector of developed countries. Considering the composition of the world’s GDP by sectors, services contribute 63.6% and employ 41.9% of the total labor force according to “The World Factbook” of the Central Intelligence Agency (CIA). Therefore, companies have to launch service innovations to remain competitive and to ensure long-term success. Although service innovation is important for companies, it is poorly understood from an academic point of view and fundamental research is lacking. In general, the exploitation of efficient service innovations consists of three steps prior to market launch, which are namely: the exploration of ideas, the development of ideas towards innovations, and the evaluation of ideas as well as innovations. Much research focused on the creativity to explore ideas and develop innovations, in the past. This has lead to a broad range of methods and concepts, increasing the creativity of groups and individuals. However, comparatively less attention has been paid on the evaluation of innovative ideas. The evaluation is the vital element of efficient service innovation management, as it identifies and separates potentially successful ideas from bad ones and outlines which ideas should be pursued. In general, evaluation within innovation management has to fulfill three basic functions. First, it has to provide the basis for stop-or-go decisions of various ideas at certain points within the innovation management process. Second, evaluation of ideas has to focus on the preparation of adequate rankings, indicating an order of priority to allocate the scarce resources of a company as efficient as possible. Third, idea evaluation should identify weak points of ideas to show starting points for improvement activities. Doing so, evaluation provides valuable feedback for further development of an idea.

Focus

The research project Service I-valuation 2.0 focuses on the evaluation of service innovations. Therefore, two different perspectives are utilized. One is the ex ante perspective, covering the evaluation of ideas during service innovation generation and exploitation. As opposed to this, the ex post perspective observes the success of service innovations after market launch. Hence, the market launch is considered a dividing line. Whereas service innovations that have already passed the market launch can be evaluated directly, using specific performance indicators and pulling the respective data, this is not possible for service innovation ideas prior to market launch, as there is no data available.
Affected by this dividing line the research project Service I-valuation 2.0 is split into two generic parts. On the one hand success factors of service innovations have to be identified to show the specific characteristics and differences between successful and unsuccessful service innovations. The success factors can be used as performance indicators if they are dependent on a specific service innovation and provide the possibility to evaluate several services ex post by retrieving existing data. But these performance indicators will be used for the ex ante anticipation of the potential success of a service innovation idea as well. Therefore, it is on the other hand essential to find sufficient methods to generate values for the performance indicators prior to market launch. The basic idea is to make use of collective knowledge to estimate the future success of an idea and to overcome the fact that no data is available. Therefore, existing evaluation methods have to be adapted and new methods have to be developed that utilize collective knowledge to foster a higher evaluation quality.

Tasks

• Service Innovation

To build the foundation for the whole project and to underline the scientific importance of investigating evaluation within service innovation management, it is essential to build a comprehensive framework for academic service innovation research. According to Paton and McLaughlin (2008) as well as Paton (2006) service science can be considered as an emerging multidisciplinary research field, focusing on the combination of fundamental science and engineering theories, models, and applications, aiming at enhancing and improving service innovation. Service science strives basically after generating successful service innovations, which have been poorly understood and their impact has been neglected (Nam and Lee 2010). Hence, the first task within the project Service I-valuation 2.0 is the formation of a wide-spanning service innovation framework, which outlines the relevance for evaluation as one specific spot requiring research.
RQ-1: How can service innovations be investigated from an academic point of view?
RQ-2: Which research topics are important?

• State of the Art

To enhance the existing scientific knowledge base a literature review provides the current state of research in this field. A core theme herein is the identification of existing evaluation methods that are used to evaluate service innovations. The objective is to identify all existing evaluation methods and furthermore to define which methods are already applied for collaborative evaluation and how. In addition, the literature review will provide vital insights how companies evaluate service innovations nowadays and what functions are covered by the evaluation.
RQ-3: Which evaluation methods exist?
RQ-4: How are service innovation ideas evaluated?

• Service Innovation Evaluation

The core theme of this research project is the evaluation of service innovations, either ex ante or ex post. Assuming a difference between the evaluation of service and product innovation fosters the question of how can service innovations be evaluated. To answer this question, the basic approach is to identify the key success factors of service innovations. The success factors can be used as performance indicators if they are dependent on a specific service innovation and provide the possibility to evaluate several services ex post by retrieving existing data. In addition, these performance indicators can be used to anticipate the potential success of a service innovation idea. Therefore, the success factor analysis is a key element of the whole research project.
RQ-5: What are the success factors of service innovations?

• Collaborative Adaption

Utilizing collective knowledge is an essential element of this research project. The objective is to develop suitable approaches that enable existing evaluation methods to be used for collaborative evaluation. The underlying theory is the wisdom of crowds (James Surowiecki), implying that a large group of individuals can often provide more accurate estimations and thereby better decisions than single experts or small homogenous groups. In addition, the beauty contest theory (John Maynard Keynes) can be utilized to enhance the performance of small groups. This theory outlines that it is possible to reach a higher level of intelligence than the sum of all individuals by asking all participants to anticipate what the average opinion expects the average opinion to be.
RQ-6: What changes are required to utilize existing methods collaboratively?

• Development of New Methods

The gained knowledge within the task of collaborative adaption will be used to develop new collaborative evaluation methods. In this context, a lot of interest will be paid to the generation of methods that are easy and intuitive to use within a company. Therefore, one major requirement is the development of methods that reduce the time needed to evaluate an idea per participant to a minimum. In addition, the overall function of providing valuable feedback to improve service innovation ideas has to be covered. Initial results from the literature review outline that existing evaluation methods are lacking this functionality. Nevertheless, the feedback and provision of starting points for improvement activities is considered a highly important element of evaluation methods for the generation and exploitation of successful service innovations.
RQ-7: What new evaluation methods can be developed?

• Method Landscape

To enhance the efficiency of innovation management, multiple innovation processes have been developed in the past and are utilized within companies today. These processes include respective gates at certain points, where all ideas are evaluated and a stop or go decision is made. As there are multiple gates within an innovation management process and the maturity degree of ideas entering a gate changes from the first to the last gate, it is important to use adequate methods for the evaluation. Assuming that the maturity degree at the first gate will be the lowest and that there is relatively less information available to decide on an idea’s future, other methods have to be utilized than at the end of the processes, where the maturity degree is high and a lot of information is available. Hence, a method landscape will be developed which arranges all methods along the innovation process, referring to the maturity degree of an idea. This method landscape will support responsible innovation managers by their task to select a suitable evaluation method for a certain gate within their innovation process.
RQ-8: Where and when can evaluation methods be utilized within the innovation process?

• Method-Characteristics-Matrix

Besides the method landscape a method-characteristics-matrix will be developed, aiming at an additional information piece to support the method selection activities within companies. The general assumption for this task is that different companies have different requirements on their evaluation methods. Therefore, it is essential to identify the requirements that are important for the selection of an evaluation method and to specify the respective characteristic for each method. The objective is to generate a method-characteristics-matrix that provides insights into the specific characteristics of each method. With the method-characteristics-matrix in place, the selection of adequate evaluation methods will be simplified, as the method-characteristics-matrix provides the possibility to compare all methods on the same basis.
RQ-9: How and to which extend can evaluation methods be utilized within the innovation process?

• Prototypical Implementation

The prototypical implementation of service innovation evaluation methods has basically two objectives. First, the prototypical implementation provides the possibility to utilize the evaluation methods easily. Second, the prototypical implementation facilitates an assessment of the adapted and new developed evaluation methods. Within the prototypical implementation, a central requirement is to design the methods in an intuitive and simple way, so that they can be used without large explanations. Therefore, usability will be the basic requirement. The prototypical implementation will be part of a university-spanning common research project (Open-I), aiming at the development of an IT system to support corporate open innovation communities.
RQ-10: How to design IT systems to support collaborative service innovation evaluation?

Related Student Reports (excerpt)