Optimal Service Design: What Benefits to Provide to Customers and How to Create them?

Designing a new competitive service or improving an existing one is a challenging task for any service provider. The challenge already starts with the important question of what the service design decision is actually all about. The more or less intangible nature of services and the customer presence in the delivery process creates concern for the total customer perception of the service package and calls for an integrated design of service product and service delivery process.

In our approach, the essence of service design largely depends on what features define the ultimate product from the customer´s point of view and determine value-to-the-customer. For many services, the product is to a large extent an experiential process rather than something merely physical, e.g. in the consulting business or in the entertainment industry. Thus, service design may span the simultaneous determination of tangible product features and the design of the underlying service delivery process, a customer experience dynamically evolving over time. Service design is not only concerned with what benefits to provide to customers but also how to create them.

If the customer interacts during the service delivery process with workforce, equipment, and/or physical environment that create the service, decisions related to the service delivery system may become part of the service design decision, too. Consider the decision of an airline about its service offering – a challenging task that involves various decisions at the interface of operations and marketing: determination of the origin-destination markets to serve, routes and departure times (network and schedule design); assignment of aircraft type to each of the offered flights (fleet assignment); pricing and the design of other ticket conditions (pricing/fare product design).

This demonstrate that service design is a highly complex and interdisciplinary task that encompasses a wide range of different industry-specific decisions requiring the integration of operations-related, market-related, and strategic aspects. Accordingly, service design must be understood as a decision making process guided by a reasonable mix of qualitative and quantitative analysis.

Though service design may sometimes appear to be more art than science, it is much more accessible to quantitative management science and operations research approaches than one might assume. Our research is focused on developing integrated service design models and methods for providing systematic decision support in selected industries. In developing such models, particular attention is given to their performance in real world applications with respect to complexity, availability of data estimation techniques, etc.

Important subtopics in our service design research are

  • Product design,
  • Process design,
  • Service network design,
  • Modeling value-to-the-customer