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Howe School of Technology ManagementCenter for Business Process InnovationTel +1 201 216 8293

SyllabusMIS 714 – Service Innovation

SemesterSpring 2013

Day of Week/TimeTuesdays, 6:15-8:45

Dr. Michael zur MuehlenStevens Institute of TechnologyHowe School of Technology ManagementBabbio 639

Office Hours:By appointment

Class Website:Moodle

Catalog DescriptionThis course leads students through the identification, analysis, definition, and deployment of service opportunities within public and private organizations. Each of these phases is analyzed in detail to encompass the principal activities, methods, tools and techniques applied in the respective phase. Students will learn how to identify appropriate supporting techniques and information technologies for the different phases of the service life cycle, assess the role of technology, and gauge the organizational impact of service-focused operations. The objective of the course is to enable students to identify, implement and evaluate innovative service offerings in their organization.

Prerequisite course: none

Overview This course prepares students for positions in service-centric organizations, ranging from the traditional service sector (e.g., finance, logistics, professional services) to public administration and product-oriented services organizations. Students will be able to assess the service portfolio of their organization, evaluate opportunities and emerging service trends, and learn the formal analysis and modeling techniques that are essential to realize new service offerings.

The course primarily addresses the needs of public and private organizations with service offerings. It covers topics relevant for IT staff that is participating in designing support systems for services, Business

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu


personnel involved in service modeling projects, and executives involved in service selection and portfolio decisions. The course makes use of real-world case studies to illustrate specific aspects of service analysis, specification, and implementation, and to test student comprehension of the material.



Introduction to Course

A service is a means of delivering customer value by providing certain outcomes that customers want to achieve without the need to own specific assets, costs, or risks. Services represent an increasing share of the GDP of developed nations, and a rapidly climbing source of revenue for organizations in all sectors of the economy. There is a fundamental shift for goods- and parts-producing organizations to restructure their offerings around the needs of their customers and to include supply, maintenance, and in-field operations to their services portfolio. Professional service organizations are increasingly taking over roles that members of their client organizations used to play, and within companies shared service centers allow for the effective deployment of service solutions that otherwise would have required large training or contracting expenditures. It seems that anything can be made a service, but few know in detail how this can be done.

As organizations are shifting from requirements-driven product design to needs-focused service design, they need to understand the full lifecycle of service identification, design, transition, and operation, supported by continual service improvement. They need to synchronize the different lifecycles of products, customers, and services. The course highlights case studies of organizations that have successfully engineered service offerings in product-centric, technology-centric, information-centric and people-centric environments. Students will learn how to identify and realize innovative service opportunities and how modern information technology enables service innovation. The concepts conveyed in this course are applicable to enterprises in traditional service industries (e.g. finance, healthcare, telecom, logistics, professional services), as well as organizations in traditionally product-focused industries (e.g. manufacturing, high technology).

The modules – and the areas of focus for the course - are:– Module 1: Overview of the Service Economy and Service Organizations– Module 2: Product-, Technology-, Process- and People-centric Services– Module 3: Techniques for Service Analysis and Specification– Module 4: Technology Support for Service Innovation

Relationship of Course to Rest of CurriculumThis course is part of the MS in Service Management curriculum and can be



taken as part of the four-course concentration in Business Process Management & Service Innovation, or as an elective within the MSIS program.

The course leverages the existing research program around Business Process Management in the Howe School to incorporate aspects of Service-Oriented Architectures and Process-as-a-Service offerings, and uses partnerships with academics and industry to incorporate new research findings and technology into the curriculum.



Learning GoalsAfter taking this course:

1. Remembering: Students will be able to name the characteristics of services, and the different areas of service innovation organizations can engage in.

2. Understanding: Students will be able to explain the features of successful service designs.

3. Applying: Students will be able to apply the lessons learned in the course case studies to their own organizations or to other organizations in different industry sectors.

4. Analyzing: Students will be able to specify data, process, and organizational requirements that emerge from a service initiative. They will be conversant in both mainstream and specialized documentation techniques, such as Service Blueprinting, BPMN, Entity-Relationship Modeling and Speech-Act Modeling

5. Evaluating: Students will be able to determine the economic rationale behind a service offering and will be able to provide a qualitative assessment of the service potential of an organization.

6. Creating: Students will apply the lessons learned in this course to their own organization and prepare a service innovation proposal as the final project of the course.

7. Students will improve their ability to communicate in group and presentation settings.

Pedagogy- Lecture, reinforced through online discussion- Case Studies- Guest speakers from industry- Hands-on student exercises- Student individual and team presentations- Readings from texts and selected relevant articles and publications

Required Cases– Lynda M. Applegate; Robert D. Austin; Kalle Lyytinen; Esko Penttinen; Timo

Saarinen: F-Secure Corporation: Software as a Service (SaaS) in the Security Solutions Market. Harvard Business School Case 9-809-099

– Thomas J. Delong, Ashish Nanda, Monica Mullick: &Samhoud Service Management. Harvard Business School Case 9-801-389

– Sandra J. Sucher, Stacy McManus: Ritz-Carlton Hotel Co. Harvard Business School Case 9-601-163

– P. Hemp, “My week as a room service waiter at the Ritz,” Harvard Business Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu


Review, 80, 2002, pp. 54.– F. Warren McFarlan, Guoqing Chen, Kai Reimers, Xunhua Guo: Digital China

Holdings Ltd.: Managing the Transition from a Product-Oriented Towards a Service-Oriented Company. Harvard Business School Case 9-307-093

– Vanita Yadav, Sangeeta S. Bharadwaj, K.B.C. Saxena: Tecnovate: Challenges of Business Process Outsourcing. University of Hong Kong Teaching Case HKU611



Required Readings (will be provided as PDF)– S. Alter, “Service system fundamentals: Work system, value chain, and life

cycle,” IBM Systems Journal, 47, 2008, Armonk, NY: International Business Machines Corp, pp. 71-86.

– R. C. Basole, and W. B. Rouse, “Complexity of service value networks: Conceptualization and empirical investigation,” IBM systems journal, 47, 2008, IBM, pp. 53.

– L. L. Berry et al., “Improving Service Quality in America: Lessons Learned [and Executive Commentary],” The Academy of Management Executive (1993-2005), 8, 1994, Academy of Management, pp. 32-52.

– L. L. Berry et al., “Creating new markets through service innovation,” MIT Sloan Management Review, 47, 2006, Sloan Management Review Association, pp. 56.

– M. J. Bitner, A. L. Ostrom, and F. N. Morgan, “Service blueprinting: A practical technique for service innovation,” California Management Review, 50, 2008, University of California, pp. 66ff.

– R. J. Clarke, and A. G. Nilsson, “Business services as communication patterns: A work practice approach for analyzing service encounters,” IBM Systems Journal, 47, 2008, IBM, pp. 129-142.

– T. H. Davenport, “The coming commoditization of processes,” Harvard Business Review, 83, 2005, pp. 100-108.

– F. Frei, “The four things a service business must get right,” Harvard Business Review, 86, 2008, pp. 70.

– J. M. Hall, and M. E. Johnson, “When should a process be art, not science,” Harvard Business Review, 87, 2009, pp. 58-65.

– M. Hammer, and S. Stanton, “How process enterprises really work,” Harvard Business Review, 77, 1999, pp. 108-120.

– M. Komssi et al., “Transforming a Software Product Company into a Service Business: Case Study at F-Secure,” 2009, IEEE Computer, pp. 61-66.

– F. Leymann, D. Roller, and M. T. Schmidt, “Web services and business process management,” IBM systems Journal, 41, 2002, IBM Corp, pp. 198-211.

– P. P. Maglio et al., “Service systems, service scientists, SSME, and innovation,” Communications of the ACM, 49, 2006, ACM, pp. 85.

– I. Miles, “Patterns of innovation in service industries,” IBM Systems Journal, 47, 2008, Citeseer, pp. 115.

– K. Moller, R. Rajala, and M. Westerlund, “Service innovation myopia? A new recipe for client-provider value creation,” California Management Review, 50, 2008, pp. 31.

– A. Parasuraman, V. A. Zeithaml, and L. L. Berry, “A conceptual model of service quality and its implications for future research,” The Journal of Marketing, 49, 1985, American Marketing Association, pp. 41-50.

– H. A. Reijers, S. Limam, and W. M. P. Van Der Aalst, “Product-based workflow design,” Journal of Management Information Systems, 20, 2003, ME Sharpe, pp. 229-262.

– M. Sawhney, R. C. Wolcott, and I. Arroniz, “The 12 different ways for companies to innovate,” IEEE Engineering Management Review, 35, 2007, IEEE, pp. 45-52.



– V. Shankar, L. L. Berry, and T. Dotzel, “A Practical Guide to Combining Products and Services,” Harvard business review, 2009,

– J. Sheehan, “Understanding service sector innovation,” Communications of the ACM, 49, 2006, ACM, pp. 47.

– M. zur Muehlen, and D. T. Ho, “Service process innovation: a case study of BPMN in practice,” 2008, IEEE Computer Society, pp. 372.



Additional Readings (Optional References)– E. Brynjolfsson, Y. Hu, and M. D. Smith, “From niches to riches: Anatomy of the

long tail,” MIT Sloan Management Review, 47, 2006, Sloan Management Review Association, pp. 67.

– L. L. Berry, V. A. Zeithaml, and A. Parasuraman, “Five imperatives for improving service quality,” Sloan Management Review, 31, 1990, pp. 29-38.

– H. Chesbrough, and J. Spohrer, “A research manifesto for services science,” Communications of the ACM, 49, 2006, ACM, pp. 40.

– H. W. Chesbrough, and A. R. Garman, “How open innovation can help you cope in lean times,” Harvard business review, 87, 2009, pp. 68.

– B. Dietrich, “Resource planning for business services,” Communications of the ACM, 49, 2006, ACM, pp. 64.

– N. S. Caswell et al., “Estimating value in service systems: A case study of a repair service system,” IBM Systems Journal, 47, 2008, Armonk, NY: International Business Machines Corp, pp. 87-100.

– L. C. Harris, and E. Ogbonna, “Service sabotage: The dark side of service dynamics,” Business Horizons, 52, 2009, pp. 325-335.

– W. B. Rouse, and M. L. Baba, “Enterprise transformation,” Communications of the ACM, 49, 2006, ACM, pp. 72.

– R. T. Rust, and C. Miu, “What academic research tells us about service,” Communications of the ACM, 49, 2006, ACM, pp. 54.

– A. Majchrzak, and Q. Wang, “Breaking the functional mind-set in process organizations,” Harvard Business Review, 74, 1996, pp. 92-101.

– S. Michel, S. W. Brown, and A. S. Gallan, “Service-logic innovations: How to innovate customers, not products,” California Management Review, 50, 2008, University of California, pp. 49.

– P. P. Maglio, and J. Spohrer, “Fundamentals of service science,” Journal of the Academy of Marketing Science, 36, 2008, Springer, pp. 18-20.

– Parasuraman, V. A. Zeithaml, and L. L. Berry, “Understanding customer expectations of service,” Relationship marketing, 2005, Sage Pubns Ltd, pp. 336.

– F. Payne, K. Storbacka, and P. Frow, “Managing the co-creation of value,” Journal of the Academy of Marketing Science, 36, 2008, Springer, pp. 83-96.

– G. Piccoli et al., “Process completeness: Strategies for aligning service systems with customers’ service needs,” Business Horizons, 52, 2009, Elsevier, pp. 367-376.

– P. G. Raverdy et al., “Service Lifecycle Management,” 2009, EU Project Report.– J. Spohrer, and P. P. Maglio, “The emergence of service science: Toward

systematic service innovations to accelerate co-creation of value,” Production and Operations Management, 17, 2008, POMS, pp. 238-246.

– K. Swank, “The lean service machine,” Harvard Business Review, 81, 2003, pp. 123-130.

– V. A. Zeithaml, A. Parasuraman, and L. L. Berry, “Problems and strategies in services marketing,” The Journal of Marketing, 49, 1985, American Marketing Association, pp. 33-46.



Assignments

The course consists of nine weekly assignments and a final project. The weekly assignments focus on the course content taught in the respective week and serve to reinforce and expand the lessons learned. Students are asked to identify organizations or examples of specific types of service innovation, perform blueprinting and other types of analysis and report their findings in short papers or presentation.

The final project is a service innovation proposal that the students prepare either for their own organization (for part-time students), or an organization of their choice (for full-time students). This proposal combines the content taught in the course with an analysis of an actual organization and its market offerings. The final project consists of a paper and a presentation.

Assignments DueWeekly Assignments Week 2-11Final Project Report Week 14

GradingGrading for each deliverable will be done on a scale from 0-100. The final grade will be computed based on the weighting of the deliverables according to the following resolution:

Points (100 scale) Grade Types of Assignments Final Grade Weight96-100 A Weekly Assignments 6090-95 A- Final Project Report 3085-89 B+ Reliability and Participation 1080-84 B Total Grade 10075-79 B-65-74 C+55-64 C50-54 C-0-49 F

Ethical Conduct

The following statement is printed in the Stevens Graduate Catalog and applies to all students taking Stevens courses, on and off campus.

“Cheating during in-class tests or take-home examinations or homework is, of course, illegal and immoral. A Graduate Academic Evaluation Board exists to investigate academic improprieties, conduct hearings, and determine any



necessary actions. The term ‘academic impropriety’ is meant to include, but is not limited to, cheating on homework, during in-class or take home examinations and plagiarism.“

Consequences of academic impropriety are severe, ranging from receiving an “F” in a course, to a warning from the Dean of the Graduate School, which becomes a part of the permanent student record, to expulsion.

Reference: The Graduate Student Handbook, Academic Year 2009-2010 StevensInstitute of Technology, page 10.

Consistent with the above statements, all homework exercises, tests and exams that are designated as individual assignments MUST contain the following signed statement before they can be accepted for grading. ____________________________________________________________________

I pledge on my honor that I have not given or received any unauthorized assistance on this assignment/examination. I further pledge that I have not copied any material from a book, article, the Internet or any other source except where I have expressly cited the source.

Signature ________________ Date: _____________

Please note that assignments in this class may be submitted to www.turnitin.com, a web-based anti-plagiarism system, for an evaluation of their originality.

Course Schedule # Title Description Assignment

Due Reading

1 Introduction and Overview

What is the difference between Goods- and Service-centric organizations?

A. Parasuraman, V. A. Zeithaml, and L. L. Berry, “A conceptual model of service quality and its implications for future research,” The Journal of Marketing, 49, 1985, American Marketing Association, pp. 41-50.

P. P. Maglio et al., “Service systems, service scientists, SSME, and innovation,” Communications of the ACM, 49, 2006, ACM, pp. 85.

F. X. Frei, “The four things a service business must get right,” Harvard business review, 86, 2008, pp. 70.


http://www.turnitin.com/


# Title Description AssignmentDue Reading

2

Technical and Organizational Levers for Service Innovation

What can an organization change in order to innovate its service offerings?

Description of a Service-centric Organization

M. Sawhney, R. C. Wolcott, and I. Arroniz, “The 12 different ways for companies to innovate,” IEEE Engineering Management Review, 35, 2007, IEEE, pp. 45-52.

J. Sheehan, “Understanding service sector innovation,” Communications of the ACM, 49, 2006, ACM, pp. 47.

3 People-Centric Services

What are typical characteristics of people-focused service organizations, such as Professional Service businesses?Case Study: Ritz Carlton

Case Analysis: Ritz Carlton

Ritz Carlton HBS Case P. Hemp, “My week as a room

service waiter at the Ritz,” Harvard Business Review, 80, 2002, pp. 54.

4

Techniques for Service Analysis: Service Blueprinting

What matters to the customer?What happens in front of and behind the line of visibility?

M. J. Bitner, A. L. Ostrom, and F. N. Morgan, “Service blueprinting: A practical technique for service innovation,” California Management Review, 50, 2008, University of California, pp. 66.

5 Product-Centric Services

How do product-centric organizations move from selling products to selling services?Case Study: Digital China Holdings Ltd.

Case Analysis:Digital China Holdings Ltd.

Digital China Holdings Ltd. HBS Case

V. Shankar, L. L. Berry, and T. Dotzel, “A Practical Guide to Combining Products and Services,” Harvard business review, 2009,

6

Techniques for Service Analysis:Work System Method

How can we analyze the interaction between service provider and consumer, and identify issues?

S. Alter, “Service system fundamentals: Work system, value chain, and life cycle,” IBM Systems Journal, 47, 2008, Armonk, NY: International Business Machines Corp, pp. 71-86.




7Technology-Centric Services

How can organizations leverage technical competencies to sustain a service advantage?Case Study: F-Secure

Case Analysis: F-Secure

F-Secure HBS Case M. Komssi et al., “Transforming

a Software Product Company into a Service Business: Case Study at F-Secure,” 2009, IEEE, pp. 61-66.

8 Process-Centric Services

How do process-as-a-service organizations work?Case Study: Tecnovate

Case Analysis: Tecnovate

Tecnovate UHK Case T. H. Davenport, “The coming

commoditization of processes,” Harvard Business Review, 83, 2005, pp. 100-108.

M. zur Muehlen, and D. T. Ho, “Service process innovation: a case study of BPMN in practice,” Proceedings of the Hawai’i International Conference on System Sciences 2008, IEEE Computer Society, pp. 372.

9Techniques for Specifying Services: Data-as-a-Service

How can data be the source for service offerings?

H. A. Reijers, S. Limam, and W. M. P. van der Aalst, “Product-based workflow design,” Journal of Management Information Systems, 20, 2003, ME Sharpe, pp. 229-262.

10

Techniques for Specifying Services: Process-as-a-Service

How can processes become services?

Analysis of Data-as-a-Service provider

M. Hammer, and S. Stanton, “How process enterprises really work,” Harvard Business Review, 77, 1999 pp. 108-120.

J. M. Hall, and M. E. Johnson, “When should a process be art, not science,” Harvard Business Review, 87, 2009, pp. 58-65.

BPMN 2.0 Poster from HPI Germany

11

Techniques for Specifying Services: Actor-oriented Analysis

What is the role of relationship management in service innovation?

Analysis of Process-as-a-Service provider

R. J. Clarke, and A. G. Nilsson, “Business services as communication patterns: A work practice approach for analyzing service encounters,” IBM Systems Journal, 47, 2008, IBM, pp. 129-142.

12

A Technical View of Services:Leveraging IT in the Services Enterprise

What are the ideas, concepts, technologies, and standards behind a Service-Oriented Architecture?

SOA articles from OMG.org and W3C.org, TBA




13

A Technical View of Services:Services Orchestration and Choreography

How can basic services be bundled and orchestrated to achieve higher-level offerings?

F. Leymann, D. Roller, and M. T. Schmidt, “Web services and business process management,” IBM Systems Journal, 41, 2002, IBM Corp, pp. 198-211.

14

An Economic View of Services: Service Value Networks

How can the value of a service offering be evaluated and enhanced?What are the stages of the service value chain?

Service Innovation Proposal

R. C. Basole, and W. B. Rouse, “Complexity of service value networks: Conceptualization and empirical investigation,” IBM systems journal, 47, 2008, IBM, pp. 53.

All assignments are due as noted. In fairness to others, late work will be penalized 10% per week overdue.


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