Introduction
For a long time, services innovation has been ignored as compared to manufactured product innovation (Rubalcada, 2010). The services sector contributes to a large percentage of the Gross Domestic Products (GDP) of many countries across the world. Innovation is largely embraced in the manufacturing and technology sectors with little or no emphasis on service innovation (Rubalcaba, 2010).
Traditionally, lack of service innovation is based on the perception that services have no tangible value; therefore, it is assumed that services have little or no innovation is necessary for the services.
However, with the continued integration of goods and services in the modern economies, services innovation is essential for businesses in creating customer focussed approach in the realization of superior value of their products. Service innovation is vital in the improvement of customer experience with the business products (Rubalcada, 2010).
Service innovation
There are fundamental differences between innovations done by manufacturing firms and innovation done by service by service firms. Technology is extremely beneficial in innovation of products by manufacturing firms. To produce superior products, manufacturing firms need to carry out intensive research about the changes to be made in the products that are essential in generation of higher revenues.
At the same time, the firms should have sound technology in order to create a superior product (De-Jong, Bruins, Dolfsma & Meijaard 2003). The product innovation process requires a large capital investment to develop a new product that has unique features that are hard to imitate. Product innovation has to deal with product characteristics during the innovation process.
Innovation has accelerated the differentiation of various products in the global markets. Many companies have developed differentiated products by applying innovative strategies. Therefore, innovation is very important in differencing products, and improving the level of customer satisfaction (De-Jong, Bruins, Dolfsma & Meijaard 2003).
Service innovation differs significantly from product innovation in that it does not require much research and development to be carried out. Services innovation is non-technological and therefore requires less money to undertake the process.
Additionally, service innovation involves minimal changes in the procedure of service delivery as compared to product innovation that require substantial changes in product characteristics (De-Jong, Bruins, Dolfsma & Meijaard 2003). Innovation in services there is little distinction between the product itself and the process whereas in manufacturing takes two forms that is goods and the process itself.
According to Bitner, Ostrom and Morgan (2008), customers are involved in firms’ service innovation and delivery. During the design of service innovation, firms should understand the outcome of the service to the customer and the long run effect on the customer behaviour towards the service. Services innovation changes should involve development of marketing, operation, and delivery of channels that are valued by the customer (Bitner, Ostrom & Morgan, 2008).
According to their analysis, Bitner, Ostrom and Morgan (2008) found out that customer involvement in service innovation and service delivery is crucial in the retention of the customers. Firm internal customer service is critical in achieving the core service delivery to the customer.
They recognize the importance human resources in services innovation more than product innovation because the intangible attributes of services. They are of the opinion that service innovation is more varied and complex hence requires the input customers for it to be successful (Bitner, Ostrom & Morgan, 2008).
The above arguments by Bitner, Ostrom and Morgan about the importance involving customer in service innovation and delivery seemed to support earlier argument by Debackere and Van Looy that customers are more involved service innovation and service delivery than product innovation.
The two argued that customers are more involved in service innovation since services changes more radically as compared to products. They claimed that product innovation is not as heterogeneous as the service sectors because customers are just external variable that need to be considered in product development but the real innovation is internally made.
The claims by the Bitner, Ostrom, Morgan, Debackere, and Van Looy (2008) that the customer is more involved in service innovation and service delivery are agreed upon. The customers need to be involved more in service innovations since service innovation is less costly than product innovation.
The services are going to be directly felt by the customer hence justifying their involvement. Services are also offered directly to customers therefore customer involvement is necessary. The intangible and distinctive natures of services necessitate the involvement of customers more than product innovation.
The blueprint techniques offered by Bitner, Ostrom and Morgan allow organizations innovate successfully. The blueprint technique offers guidelines on how organizations can go about innovating services and services delivery. It gives an organization a common point on which to discuss services innovation by focusing on customer, managers, and employees. The blueprint provides an innovation platform on which organizations can codify potential innovation roadmap for future innovations.
Furthermore, the blueprint enables organizations to realize the roles and interdependences that different components in the innovation process have to play for the success of the entire process. Bitner, Ostrom and Morgan offer organization strategies of how they can identify and rectify gaps in the innovation process and the general understanding of innovation experiences.
The blueprint gives an illustration of how different companies have dealt with service innovation and service delivery. These examples are appropriate for the Company to use as benchmarks in the process of service innovation.
The blueprint technique is seen more appropriate to derivative innovation than to the breakthrough innovation projects. The technique is ideal for any organization that is pursuing innovation since it outlines the various steps that the organization can take as innovates. The technique is adaptable and offers practical applications that can be adopted by different firms undertaking innovation.
Conclusion
The services sector has over the year positively contributed to economic development of many economies across the world. The sector rapid growth as compared to manufacturing industry serves as a wake-up call for more innovation in the sector. However, innovation in the service industry has been ignored.
This indicates that there is need to embrace innovation in the service sector to promote its growth. As presented by Bitner, Ostrom and Morgan, organizations that embrace services innovation are bound to reap enormous benefits in both short term and long term. It is dues to increased service innovation in the services sector that the modern economies are witnessing the growth and development.
Well structured innovation in all field, especially in the services sector is bound to accelerate economic growth and development of many countries in the world today. This is achieved through increased customer satisfaction, customer loyalty and variety of services for customers to select. Innovation should be encouraged in the service sector to improve the performance of other sectors of the economy.
Reference List
Bitner, M, J, Ostrom, A, L & Morgan, F, N 2008, ‘Service Blueprinting: A Practical Technique for Service Innovation’, California Management Review, vol. 50, no. 3, pp. 66-94.
De-Jong, J J P, Bruins, A, Dolfsma, W, & Meijaard J 2003, Innovation in service firms explored: what, how and why? Web.
Debackere, K & Van Looy, B 2003, ‘Managing innovation in a service environment’, in Van Looy, B, Gemmel, P & Van Dierdonck, R (eds.), Services management: An integrated approach, 2nd ed., Financial Times Prentice Hall, Harlow, England, pp. 404-426.
Rubalcaba, L 2010, “On the differences between goods and services innovation” Journal of Innovation Economics Vol. 1 no. 5, pp. 17-40