What can human-centered innovators learn from a tech focused approach to service innovation?

Starting with technology to drive service innovation may feel counter intuitive, when we want to create better value and experiences for customers and users.

So when I initially started reading the paper on “Digital service innovation in B2B markets” I felt conflicted. The paper takes a technology focused view to innovation. But I was curious to understand what drives this focus on the technology, and how it might nudge my thinking.

Here is what I (a human-centered innovator) learned from reading the paper.

A DEFINITION OF SERVICE INNOVATION

The paper provides two useful definitions:

SERVICE INNOVATION is defined as: “A new offering and/or process that is adopted by stakeholders in an ecosystem and that creates value for them.”

This definition shifts the focus from the output delivered — the technology created by the service provider — to the value created for the beneficiary.

THREE KEY DIMENSIONS of Service Innovation:

• “What” — The Service Offering: The new service features.
• “How” — The Service Process: The dynamic activities that deliver the service.
• “Who/for whom” — The Service Ecosystem: The integration of resources among stakeholders.

TECH AS A LEVER FOR INNOVATION

• IoT enables new business models of non-ownership.
• IoT connect previously unconnected devices to gain new insights about their usage and business processes.
• Intelligent Automation enhances processes to augment human capabilities, and gains data and insights about these processes.
• Digital Platforms integrate people and resources ecosystem to create new sources and value that previously not possible And make them accessible to individuals. And wider ecosystem.

HOW CREATE SERVICE INNOVATION

• Focus on all three service dimensions: the offering, process and ecosystem, because one dimension will impact the other dimensions.
• Consider the synergistic role of multiple technologies.

🚨 BUT, technology alone is not enough. Innovators must…

• Reconfigure organizations and design new business models to harness the technology potential.
• Consider the larger ecosystem: understand stakeholders and the institutional arrangements governing their behaviors.
• Align beneficiaries, business models and governance structures.
• Leverage automation and augmentation to enhance human capabilities, rather than merely replacing them.

💡 CONCLUSION

Surprisingly, taking a strong tech focused view on innovation puts a more emphasis on the non-technical aspects. It makes readers acutely aware that while technology is a powerful lever, it is only a starting point. Innovators must move on to the intangible dimensions of service innovation to create success.

Reference: “Digital service innovation in B2B markets” by Christian Kowalkowski, Jochen Wirtz, Michael Ehret. December 2023.

Photo by Eric Krull on Unsplash