The presentation describes the service innovation process. It describes how to get from a service idea to successful service innovations. We highlight innovation methods for facilitating the creativity and for describing the actual service.
Service innovation for energy services: how to get from an idea to a service innovation
1. Innovation approach for identifying,
developing, and launching new services
PD Dr. Heiko Gebauer
Business innovation in utility sectors
Swiss Federal Institute of Aquatic Science and Technology
(EAWAG)
Zurich, Switzerland
2. Service innovation approaches
Benchmarking
Goals
−Imitating services
from competitors
−Using competitor
services as a
facilitator for creating
new services
Procedures
Customers
Partners
−Creating services
through an in-depth
understanding of
customer needs
−Creating services
based on the
competences of
partners
−Predicting changes
in the service needs
and emergence of
new service needs
−Creating services
based on
partner’s in-depth
understanding of
customer needs
−Monitoring
competitive offerings
−Identification of
service ideas
−Monitoring crossindustry offerings
and service
innovations
−Service
development
−Market launch of
new services
−Partner
workshops
Company
−Creating services
based on
company’s
competencies and
skills
−Leverage existing
services into new
customer segments
−Improving and reinnovating existing
services
−Competence
analysis
−Critical incident
techniques for
existing services
3. Customer-driven service innovation approach
Customers
Supplier of ideas and
challengers
Innovation
process
Definition
Definition
Tasks
−
−
−
−
Instruments
− Behavioral orientation for
segmenting customers
− Process mapping (Lifecycle analysis)
− Utility layers
− Brainwriting
Objectives
Customer segmentation
Customer processes
Customer needs
Idea generation
Co-developer
and tester
Entwicklung
Development
− Idea description
− Module description
− Process description
− Check-lists
− Modularization
− Blueprinting
− Resource planning
− Development workshops
− Prototyping
Purchaser and
Feedback provider
Market
launch
− Executing market tests
− Roll out
− Cost and sales
supervision
− Test markets
− Capacity management
− Customer observation
− Optimization
workshops
Efficiency
Effectiveness
Source: Dörner, Gassmann & Gebauer (2011)
4. Customer-driven service innovation approach
Customers
Supplier of ideas and
Challengers
Innovation
process
Definition
Definition
Tasks
−
−
−
−
Instruments
− Behavioral orientation for
segmenting customers
− Process mapping (Lifecycle analysis)
− Utility layers
− Brainwriting
Objectives
Customer segmentation
Customer processes
Customer needs
Idea generation
Co-developer
and tester
Entwicklung
Development
− Idea description
− Module description
− Process description
− Check-lists
− Modularization
− Blueprinting
− Resource planning
− Development workshops
− Prototyping
Purchaser and
Feedback provider
Market
launch
− Executing market tests
− Roll out
− Cost and sales
supervision
− Test markets
− Capacity management
− Customer observation
− Optimization
workshops
Efficiency
Effectiveness
Source: Dörner, Gassmann & Gebauer (2011)
5. Task 1: Behavioral description of customer
segments
Households
Households
Households
Customer segments
− Commercial customers
(e.g., industry, retails,
farmers, branches and so
on)
− Public institutions (e.g.,
schools, public buildings)
− Private customers
(landlords, tenants,
families)
Usage behavior
−Stand-by, temperature, light,
washing clothes & dishes, cooking,
PC work
Adaptive behavior
−Purchasing and exchange of
devices (fridges, tv, energy saving
lamps, timers, sensors windows &
doors …)
Investment behavior
−Installation of heating pumps, solar
panels, air conditioning, heating
systems, windows, cladding
isolation ...
6. Example – Household description according to
social milieus
Usage
behavior
Investment
behavior
Adaptive
behavior
Households
Social milieus according to social status and basic values
General for consumer behavior
Social status
Specific for utilities
Performers &
Achievers
Traditionals
Environmentally
conscious
Materialistic
Basic values
7. Short description of „Traditionalists“
Characteristics
Description
Values
−
−
−
−
−
−
Interests
− Product interests: Garden, Health, Food
− Potential interests on utility services - today: Day/Night tariff, customer
centre, information material, disconnectable electric meter and - future:
Displays or specific, but simple invoices for controlling energy consumption,
support services, exchange programs for household devices, detection of
heating leakages
Willingness to pay
− Medium, limited financial resources, sufficient time, highest savings
through the exchange programs for household devices
Social status
−
−
−
−
−
Certainty, frugality, and continuity
Saving is an essential attitude
Concrete analysis and control of energy consumption
Limited acceptance of technological innovations
Strong effort on understanding energy efficiency
Long-term decisions
Mostly women
Age: +50
Education: low to medium
Income: medium level
Jobs: Pensioners, housewives, basic employees, farmers
9. Task 2: Identification of household energy
related processes and daily routines
Search
housing
at
Buying
Appliances
Source:
Philips / B2E
e
en
Home
Renovation
Sleeping
Daily life
g ie
Hy
l
ne
Source:
Philips / B2E
nn
Di
Meal
Leisure &
Entertainment
Kids
er
l
ea
M
School
i ng
av
Le ome
h
Kids are
home and
watch TV
Source:
B2E
Work
Source:
Philips
Breakfast
Meal
ea
M
Work
e
en
gi
Hy
i ng
av e
Le om
h
ne
i ng
av
Le ome
h
gi
Hy
Leisure &
Entertainment
Entertainment
l
ea
M
Sleeping
Shared
living
Energy
audit
gie
Hy
…
Lights on
Vacation
Work
Energy
bills
Sleeping
.
Leisure &
Entertainment
g
Hy
ne
ie
Moving
in
Leaving
er
igh
Ne
W
Utility
contracts
ing
av e
Le om
h
Source:
B2E
10. Task 3: Classification of energy related
processes
Relevance of the
processes/activities for energy
issues
High
Results of task 2
Low
Low
High
Frequency of
processes /activities
11. Task 4: Analyzing the utility layers for selected
energy related processes
Selected energy related
processes
Results of task 3
Utility layers 1
Relevance for energy issues
Customer
productivity
High
A
B
Simplicity
Convience
Risks
Low
Low
Frequency
High
Image & fun
Environemental
friendliness
1
– Based on von Kim, W.C. and Mauborgne, R. (2005), Blue Ocean Strategy: How to Create Uncontested Market Space and Make the
Competition Irrelevant, Harvard Business Review Press.
...
12. Task 5: Brainwriting for identifying innovative ideas
for utility services
Brainwriting
Examples
1 • Information services for saving energies
• Feasibility studies for solar panels
• Case studies on how to save energy
Utility layer maps as a
input for idea generation
2
Round 1: Within 5 Minutes writing down
3 Suggestions on a flip chart
Circulating the flip
charts among the team
Result: List of innovative ideas
• Customer card
• Thermal imaging of buildings
• ...
13. Task 7: Description and evaluation of the service
ideas (Check list)
Value-benefit analysis
Customer Customer
situation
needs
Service
idea
Competence
−Demanded
by customers
−Recognized by
customers
−Existing
in the
utility
Importance for
customer
−High
−Medium
−Low
Differentiation
Revenue Charging Implementation time
−Standard −High
−Differen- −Medium
tiator
−Low
−Future
−+
−-
−Short-term
−Mediumterm
−Long-term
14. Customer-driven service innovation approach
Customers &
partners as
Supplier of ideas and
Challengers
Innovation
process
Definition
Definition
Tasks
−
−
−
−
Instruments
− Behavioral orientation for
segmenting customers
− Process mapping (Lifecycle analysis)
− Utility layers
− Brainwriting
Objectives
Customer segmentation
Customer processes
Customer needs
Idea generation
Co-developer
and tester
Entwicklung
Development
− Idea description
− Module description
− Process description
−...
− Check-lists
− Modularization
− Blueprinting
− Resource planning
− Development workshops
− Prototypes
Purchaser and
Feedback provider
Market
launch
− Executing market tests
− Roll out
− Cost and sales
supervision
− Test markets
− Capacity management
− Customer observation
− Optimization
workshops
Efficiency
Effectiveness
Source: Dörner, Gassmann & Gebauer (2011)
15. Task 1: Preliminary description of the service
ideas (Check list)
A) Short summary
a) Main objectives
b) Customer needs
c) Service description
B) Strategy
a) Consistency with the overall strategy
b) Strategic importance
c) Synergies to other services and products
C) Customer needs
a) Customer situation
b) Customer needs
b) „Unique selling proposition“
D) Service description
a) Core elements
b) Standards
c) Service levels and options
d) Involved partners and organizational units
E) Service Process
a) Rough process description
b) Responsibilities within the process
c) Execution of the processes
F) Service marketing
a) Target group
b) Key market
c) Competition
d) Pricing model
e) Selling
f) Promotion
G) Preconditions
a) Feasibility studies
b) Preconditions
c) Restrictions (rlaw, others)
H) Cost & revenue estimation
a) Developing costs and investments
b) Delivery cost
c) Sales prices and sales volume
I) Development plan
a) Time line for the implementation plan
b) Milestones
c) Resource planning
J) Risks
a) Product & service risks
b) Project risks
c) Market and competitive risks
d) Others
16. Task 2: Modularisation of services
Service definitions
Service platform
?
Pure must element
Modul description
ServiceModul
?
ServiceModul
Upgrading Elements
?
ServiceModul
Optional Elements
Necessary basic elements Extension of the basic elements Additional services
Must‘s
Functional analysis
Analysis of customer
requirements
Service functions
for all customer types
Could‘s
Service functions
for specific customer types
Customer type 1
Customer type 2
Customer type 3
17. Sun Power Service packages
This idea had been developed for a specific utility
Core idea
− House-owner has a sufficient roof-surface. By
installing photovoltaic equipment (5 KWPeak), houseowners make significant contribution to
sustainability
− Utility copes with all challenges and provides a total
solution. Challenges include (house-owner has
limited knowledge and wrong expectations)
− Utility covers the whole process starting from a first
counseling, access to financial support, installation
and maintenance of the photovoltaic equipment
− Utility guarantees quality of product and services
through partnering with installers
− Sun Power Service packages contributes to the
extension of renewable energy usage
Key issues:
− Service package descriptions
− Partnering concept
− Communication and promotion of the services
Modul 1: Consulting
Modul 2: Interest
clarification
Modul 3: Feasibility study
Modul 4: Proposal,
Execution (installation), and
operation
18. Thermal imaging services (1)
This idea had been developed for a specific utility
Core idea
− Cost-competitive, simple and neutral entry with
a substantial and clear recommendation for the
customers
− Awareness and engagement into the topic on
energy losses in private buildings
− Modules go beyond the existing offerings of
other service providers and provides more
substantial recommendations to the houseowner
− High standardization and automatization of the
modules
Key issues:
− Full descriptions of each module
− Pilot study and market launches
Module 1:
Mini-Check
Thermal imaging
service
Module 2: Full-scale
thermal imaging
services
Optional module 3:
Energy Performance
Certificate (for
Buildings)
19. Thermal imaging services (2)
This idea had been developed for a specific utility
Module 1:
Mini-Check
Thermal imaging
service
Module 2: Fullscale thermal
imaging services
Optional module
3: Energy
Performance
Certificate (for
Buildings)
Objectives
•Easy and cost-competitive entry of customers into the issue of energy
efficiency of buildings
•Offering a small-size service package, which makes technical sense and
offers an additional value for the house-owners
•Differentiation compared to existing offerings through quality levels
•Clear restrictions of the applications of the thermal images (e.g., no
applications for reclamation on new buildings)
Contents:
•Personal customer contacts
•Written introductions (Check lists for the customer preparations)
•Customer preparations
•Executions of the thermal imaging (selection of specific thermal imaging
days)
•Standardized analysis of the thermal image
•Sending the information to the customers
Charging
•Cost-coverage charging methods of the mini-check of about 100 Euro
(labor costs about 2h equals 100 Euro) without travel costs of 75 Euro
and overhead-cost
20. Thermal imaging services (3)
This idea had been developed for a specific utility
Objectives:
•Identification and description of technical-feasible recommendations
for improving the energy-efficiency of buildings
Module 2: Fullscale thermal
imaging services
Contents:
•Personal customer contact
•Written or verbal introduction (Check list for the customer preparation)
•Detailed preparation of the customers necessary (about 3 days
including windows, heating and building)
•Execution of thermal imaging services (inside and outside)
•Detailed analysis of the images and the formulation of the report
•Discussion of the report with the customers
•Support for the getting subsidies and financial support for energy
efficiency actions
•Implementation of the actions together with the customers
Optional module
3: Energy
Performance
Certificate (for
Buildings)
Charging:
•Charging of the standard module 2 1200 Euro (labor costs of 2 days –
900 Euro costs internally
•Intermediate finances for the implementation actions could be
provided by the utility
Module 1:
Mini-Check
Thermal imaging
service
21. Thermal imaging services (4)
This idea had been developed for a specific utility
Objectives:
•Energy performance certificates are mandatory in various areas. For example, in
the field of subsidized housing, every new, extended, and re-build house with more
than 1000 m2 and renting and selling of houses (buildings).
Module 1:
Mini-Check
Thermal imaging
service
Content:
•Energy performance certificate contains all building information and calculations
related to the thermal characteristics of the building
•Specific norms apply to the energy performance certificate
Module 2: Fullscale thermal
imaging services
Optional module
3: Energy
Performance
Certificate (for
Buildings)
Charging:
•Optional module: Energy performance certificates for about 1500 Euro
•Prices are similar to competitive offerings
22. Task 3: Service blueprinting
Procedure
1
The identification of the service process, that is supposed to be blueprinted
2
The identification of the customer segment or the
supposed to experience the service
3
Picturing the service from the customer’s perspective
4
Picturing the actions of the contact employee
(onstage and backstage), and/or technology actions
5
Linking the contact activities to the needed support functions
6
Adding the evidence of service for every customer action step
23. Sun Power Service packages
This service blueprint had been developed for a specific utility
Customers
Sales
Solar power
center
Installation
partners
Local
authorities
Processes
Activities
Open
discussion
Answering FAQs
Clarification of
interest
Service description
Legal conditions
Self-financing information
Feasibility study
Technical feasibility
Economic feasibility
Proposal
preparation for
subsidies
Proposal development
Self-financing clarification
Informing partners about the
proposal evaluations
(accepted, waiting list, and
rejected)
Implementation
Scheduling of partners
Installation
Acceptance test
Operation
Monitoring
Trouble shooting
- Parties involved in and/or conducting the activities
24. Task 4: Business plan development
Template for business plan
development
Contents
Main content
Content elements
Executive summary
Service description
Customer benefits
Service objectives
Financial key indicators
*R
eferenz zu DL-Ressourcen
Services
Service elements
Service variants
Service documentation
Service marketing
* F equenz
r
Service processes
Customer activities
Internal activities
Customer contact points
Personal resources
Personal resource demand
Personal qualifications
Personal training & education
Personal assessment & compensation
Service partners
Partner agreements
Partner activities
Service quality
Quality standards
Quality control
Financial aspects
Labor costs
Material costs
Educational costs
Overhead costs
Service pricing & controlling
Risk assessment
Product & service risks
Project risks
Market and competitive riss
Implementation plan
Time line
Milestones
Resource planning
Bächli AG
Sei te 6
DL-Kon zep t:
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A) Q ua litätsstanda rds de finieren
(bs pw. lei stungsbezogen, kommunikati onsbez., bedürf ni sbez.)
B) Form der Q ualitä tskontrolle
Periodisch, d.h. alle
........ W ochen
Ad hoc, d.h. stichpr obenweise
(bs pw. Kunden-Feed-back, S ic hproben, Rev iew, Kennzahlen)
t
C) Ve ra ntw or tliche r Q -D ef./Kontr olle
6) Fina nz aspekte
A) Ge schätzt e Koste n pro N achfr age
Personalkosten
Ma erialkost en
t
Hardwarekosten
Ge inkostenanteil
me
CHF
T otal
*
*
*
*
* Totale Kosten pro Periode .........
CH F
CHF
CHF
CHF
CHF
* Bemerkungen
25. Business plan development for energy checks (1)
This business plan had been developed for a specific utility
Objectives:
Short-term objectives:
•Conducting energy consulting services
•Supporting behavioral and investment related actions for improving the
energy efficiency
Module 1:
Measure and
analysis of energy
efficiency
Long-term objectives
•Enabling customers to execute energy efficiency actions themselves
•Establishing a platform for self-services for energy efficiency
•Access to information on value-added services (energy-efficiency
recommendations, energy savings calculator)
Module 2: Guiding
the
implementation
actions
Contents:
•Module 1: Measure and analysis of energy efficiency
•Module 2: Guiding the implementation actions
•Optional module: online energy accounting
Optional module:
Online Energy
accounting
Key financial indicators:
•Separate prices for Module 1 and 2
•Yearly cost contribution for online energy accounting depending on the
identified energy saving potential
26. Business plan development for energy checks (2)
This business plan had been developed for a specific utility
Hotels
Main
implementation
steps
• Pilot study
• Building partner
network
• Final service
development
• Market launch
and assistance
Offices
• Transfer
experiences of
doctor's office to
general offices
• Pilot study
• Market launch
and assistance
Doctor offices
• Final service
development
• Pilot studies
• Market launch
and assistance
Schools
• Pilot study during
Feel-the-Energy
program
• Market launch
and assistance
Time frame
2010-2014
2012-2016
2011-2015
open
Revenues
164‘000 €
607‘500 €
103‘000 €
open
Investments
210‘000 €
910‘000 €
140‘000 €
open
90 Mwh
270 Mwh
50 Mwh
open
Yearly energy
savings
27. Business plan development for energy checks (3)
This business plan had been developed for a specific utility
Service modules
Electricity
Module 1:
Measure and
analysis of energy
efficiency
Module 2:
Guiding the
implementation
actions
Optional module:
Online Energy
accounting
Heating
Water
28. Business plan development for energy checks (3)
This business plan had been developed for a specific utility
Initial situation for hotel energy checks
− Energy-saving potential is relative high, and covers different applications
(heating, warm water, electricity and so on)
− Until now limited number of actions implemented by hotels
− If one hotel will demand the energy check, other hotels are very likely to
follow
− Challenges –technical competencies to conduct the energy check is
beyond the competence base of the utility. Utility has to rely on a various
partners
Short-term objectives
− Execution of energy consulting service together with interested hotels
− Supporting hotels in changing their behavior and investment-related actions
Long-term objectives
− Enabling hotels to execute energy efficiency actions themselves
− Establishing a platform for self-services for energy efficiency
− Access to information on value-added services (energy-efficiency
recommendations, energy savings calculator)
29. Business plan development for energy checks (4)
This business plan had been developed for a specific utility
Target market
− Hotels within the regions, which are confronted with an above-theaverage energy consumption and strong interest in saving energy
− High market potential, because it is a touristic region
Competition
− No competition for measuring energy consumption in hotels
(today)
− No competitor or partner is able to systematically and
comprehensively cover energy efficiency in hotels
Pricing
− Prices are based on individual prices for each module
− Basic modules are relative cheap (cost-covering) in order to avoid
to high upfront investments.
− 60% of the realized energy saving go to the utility within the first
years
30. Business plan development for energy checks (5)
This business plan had been developed for a specific utility
Implementation plan
Pilot study with a
single hotel
Development of the energycheck for hotels
Market launch and assistance
• 100 WD (Working
days)
• Costs (about 500 Euro
per WD) = 50‘000 Euro
Setting-up partners
• Identification of potential
partners
• Developing a partnering
concept (quality criteria, cooperating forms)
Service development
• Standardization of the
service delivery processes
• Setting-up conditions for
service delivery processes
• Market capacity is estimated to be
325 hotels
Estimated effort and costs
• 40 WD
• Costs (about 500 Euro per
WD) = 20‘000 Euro
• Within the first three years about 10%
of the hotels can be convinced to use
the energy checks (32 hotels)
• Following number of hotels are
estimated:
• 1st year = 8 hotels
• 2nd year = 12 hotels
• 3rd year = 12 hotels
• Estimated effort without
consideration of learning effects
• 1st year= 40 WD
• 2nd year = 60 WD
• 3rd year = 60 WD
Comment: Resource demand and costs depend strongly on the time frames, when hotels would
demand the services. Most probably. Hotel only would demand the service during the off-season or
rebuilding periods. Peak management is, therefore, essential for the financial success of the service
31. Business plan development for energy checks (6)
This business plan had been developed for a specific utility
Service delivery process and activities (1): Effort to conduct the
service activities is estimated to take 5 days
Process / activities
Short description
Preparation of the
hotel visits
• Previous energy consumption analysis and definition of performance
indicators
Order clarification at
the hotel
• Checking the technical pre-conditions and economic potentials of the
services and modules (e.g., GSM-Standard, offline or online data
transmission)
• Definition of necessary actions together with selected partners based
on a preliminary analysis
Order explanation
• Price information / explanation of the service, service elements, and
modules
• Information on involving customers (e.g., hotel energy manager)
• Service and consulting contents, guarantees and reliabilities,
integration of partners
Technical
measurement
• Installing measurement equipment depending on the modules
• Online or offline data transmission
Detailed analysis and
assessment of
energy savings
• Data analysis
• Discussion of the data together with the customers (e.g. electric
(energy) consumers together with the hotel energy managers and
technical energy saving potentials identifications)
• Detailed measurements with dedicated measurement instruments
32. Business plan development for energy checks (6)
This business plan had been developed for a specific utility
Service delivery process
Process /
activities
Short description
Developing actions
&
recommendations
• Developing potential actions for increasing energy efficiency
• Cost-benefit-analysis
Report
development
• Categorizing and describing the recommended actions
• Categories
•
Immediate actions (low costs, independent from other actions,
favorable cost-benefit ratio
•
Short-term actions (economic interesting under the assumption of
today’s energy prices or low increases in the energy prices)
•
Specific actions (implemented together with other actions such as
rebuilding or new investments. Might get attractive by higher
energy prices)
Report
presentation
• Report – Design and explanation (pdf and ppt) are key enablers
• Suitable language, clear suggestions
• Discussing the report with the customers
Guiding the
implementation of
tthe actions
•
•
•
•
Discussion of the actions together with the customers
Creating awareness and motivation
Supporting the implementation and coordination of the partners
Labeling – once the actions pay-off in terms of energy efficiency
33. Customer-driven service innovation approach
Customers
Supplier of ideas and
Challengers
Innovation
process
Definition
Definition
Tasks
−
−
−
−
Instruments
− Behavioral orientation for
segmenting customers
− Process mapping (Lifecycle analysis)
− Utility layers
− Brainwriting
Objectives
Customer segmentation
Customer processes
Customer needs
Idea generation
Co-developer
and tester
Entwicklung
Development
− Idea description
− Module description
− Process description
− Check-lists
− Modularization
− Blueprinting
− Resource planning
− Development workshops
− Prototyping
Purchaser and
Feedback provider
Market
launch
− Executing market tests
− Roll out
− Cost and sales
supervision
− Test markets
− Capacity management
− Customer observation
− Optimization
workshops
Efficiency
Effectiveness
Source: Dörner, Gassmann & Gebauer (2011)