An Executive Summary Report - The Usage and Effectiveness of New Service Development Tools

Grappling with fierce competitions and economic instability, financial service institutions invest a lot in new service development (NSD) in an attempt to attract new customers and gain competitive advantage. However, to their dismay, NSD success rate is on average 58%To turn things around, a number of NSD tools have been proposed to facilitate development efforts. For a complete report, please contact Jin Dayu at dayu_jin[at]nus[dot]edu[dot]sg

The purpose of this survey is to estimate the usage and effectiveness of NSD tools adopted by Singapore financial service institutions. Specific objectives include: (1) analyze NSD tools usage pattern; (2) assess NSD performance and its measurement; (3) estimate the impact of NSD tools on NSD performance; (4) estimate the influence of NSD innovativeness on the choice of NSD tools.

This report is based on information collected from 34 NSD projects in a mailed survey of 532 Singapore financial institutions. The results for each objective are presented in the following sections.

NSD Tools Usage Pattern
NSD tools are classified into market tools (to encourage customers’ input) and development tools (to facilitate technical development and testing). Their usage is inspected by looking into different development stages and industries.

• Market tools are used more frequently than development tools. Top 3 market tools are brainstorming, benchmarking, and scenario planning. Top 3 development tools are concept testing, structured analysis and design, and service blueprint;

• Most market tools are used in NSD stages with intensive customer interaction while most development tools are employed in the design and testing stages;
• Fund management firms utilize more market tools than other industries, and banks more development tools.

NSD Performance and Its Measurement
NSD performance is assessed by differentiating market performance (commercial outcomes) from operational performance (project execution outcomes). Performance rating and importance attached to specific measurement are evaluated across various industries.

• Financial service institutions obtain better market performance than operational performance. Specifically, real estate firms and banks report above-average operational and market results, and insurance firms achieve above-average market results;
• Firms emphasize more on market outcomes than operational outcomes. Prevalent NSD performance measurements include obtaining high product quality, achieving competitive advantages, and satisfying customer needs;
• The more the importance is attached to certain performance measurement, the better the performance is reported.

NSD Tools Effectiveness
Each NSD project is labeled as either success or failure according to its market performance and operational performance. The tools usage in successful projects is compared to that in failed projects.

• Market tools have a positive impact on operational performance, but not on market performance;
• Development tools have a positive influence on market performance, but not on operational performance.

NSD Innovativeness
NSD innovativeness is mapped along four independent dimensions—firm familiarity, firm fit, customer familiarity, and customer behavior change. Tools usage is compared between projects with higher and lower rating on each dimension.

• Most financial products are modifications and extensions of existing products.
• Firms are inclined to develop services that are compatible with existing resources and are familiar to customers.
• NSD tools are used more frequently when (1) service concepts are new to firm; (2) service concepts are new to customers; (3) firm has sufficient capital and human resources; and (4) behavior change is required for customer consumption.
  

Lesson Learned – How to Make a Company List

Finally, it comes the time for my survey mailing. Actually I began preparing this survey more than two months ago, so I would like to share with you some of the experiences and lessons about how to make a company list.

Step 1—Be clear about what you are looking for.

First thing first, you should make a list of the key information you are looking for. What is the focal industry, service or product? What are the company types, private or public, listed or unlisted? What’s the company size, MNC or SME? Who will be your respondents, CEOs or senior managers?

My study is about new service development (NSD) tools in financial service industry, so I am looking for: (1) names and addresses of financial service companies; (2) names of business development managers; (3) company size.

Step 2—Collect existing database.

Rome was not built in one day. You have to resort to existing databases and base your own on them. You can consult with your university librarians or seniors to see which databases are at your disposal.

I collected four databases in total and they supplement one another.

Step 3—Find strength and weakness of each database.

Then you should spend some time familiarizing yourself with each database. What key information do they include? What is missing? Are they up-to-date? Are they easy to organize? Are they specific enough? Do they offer a broad enough coverage of the industry?

I randomly choose some company from different databases and compare them to the information provided in company’s website (most accurate). The following is what I found,

Step 4—Choose main database.

Main database is the one you will do modification on it later on. After choosing on main database, you will be able to focus more easily and do the job more efficiently. It should possess, if not all, most of the key information.

OneSource cover all the three type of information I want so that I chose it as my main database.

Step 5—Supplement main database.

No database is perfect, so you should supplement main database with the missing company entries from other databases. This is the most critical yet time-consuming part of the whole process and be prepared that it will take you days and even weeks. One tricky part is that different database may use different names to indicate the same company, i.e., LTD/Limited/Ltd. So, I suggest you first sorting all the companies by their names and then compare the main database with only one database at a time. It’s better to color entries from different database because you can you will know which items have already been updated.

The following is a screen shot of my main database where I use different colors to indicate different sources, and you can find it’s really a tedious work.

Step 6—Polish final database.

After combining databases, duplicated items will become a big problem. It is very annoying for companies to receive several surveys, so you need to pay more attestation to that. What you can do is to sort in a single column (e.g., company name, company address, and manager name) to find whether there are similar items.

Another issue is incorrectness. You don’t want your survey to be returned due to incorrect address, so you’d better double-check the information which you are not so sure with the company website (How to Find Company Contact Information).

Some footnotes: some very helpful videos about survey implementation.

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