2007/04/28 13:00 Papers on "Service Innovation in Software and Financial Services"

daviding — Thu, 12 Jul 2007 21:46:16 -0400

2007/04/28 13:00 Papers on "Service Innovation in Software and Financial Services", Innovation in Services Conference, Berkeley, California

This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the Coevolving Innovations web site by David Ing.

Discussant: Antti Ainamo

Papers:

“eInsurance – Novel Services in the Electronic Environment”, by Ahonen, Salonen, Kivisto-Rahnasto, Jarvinen, and Silius
“Building SaaS Business on Top of Open Source – Economic and Legal Considerations, by Oksanen, Helander, Seppanen, Puhakka, and Laine
"Issues in Shifting from a Product-Based Business Model to a Service-Based Model", by Mironov
“Services Innovation: Sourcing In Lessons from True Professionals”, by Antti Ainamo and Marc Ventresca

Note: (power failure in audio recording)

“eInsurance – Novel Services in the Electronic Environment”, by Ahonen, Salonen, Kivisto-Rahnasto, Jarvinen, and Silius

Tampere

Insurance concept for insurance, to help consumers get more familiar with insurance in an electronic environment

Most electronic use in insurance has been just in getting information

Surveys show that customers are interested in operating in the environment

Challenges:

Complex nature
Transaction frequency low, e.g. compared to banking
Physical service component is missing

Tekes research project

Focus group results:

Customers not interested in service, maybe because current service is underdeveloped

Have been doing usability evaluation, compared to British web sites

Practical results for safety and insurance provider

User interface: Drag-and-drop family members into house

Results: "Insurance Selector" service launched by Pohjola Non-life Insurance Company

Feedback that results have been useful

[Questions]

Drop out?

Insurance isn't high involvement, it's not where people go when they're trying to find something interesting

“Building SaaS Business on Top of Open Source – Economic and Legal Considerations, by Oksanen, Helander, Seppanen, Puhakka, and Laine

Of team, am a lawyer working at SoberIT

How to manage open source in a corporate environment

http://www.coss.fi/ossi

"Community Created Content" book available on web site

What is SaaS (aside from the hype)?

Chong and Carraro (2006), it's something between a service provider and a customer
Four levels
Level 1: ASP, service provider offers online application
Didn't take off, as not seen a reliable

At the moment moving to Level 4: scalable, configurable, multi-tenant-efficient

Large server farm

Intellectual property rights: there aren't any, on services

Copyleft

Affero's addition to GPL license

GPL v3

Have created an opensource license checker

[Questions]

Business method patents?

Don't have business method patents in Europe

"Issues in Shifting from a Product-Based Business Model to a Service-Based Model", by Rich Mironov

Practitioner, consulting to companies that want to move to service models

Software business models:

Product / licensing model
Subscription service model
Transaction service model

Service models force "shared succcess"

Survey, pulse of the market

http://www.mironov.com/more/survey_results
If in the product model, still slanted towards large enterprise and government, they're coming up from the bottom of small and medium businesses
If selling a service, subscription is 33% faster, and nearly 50% faster if selling by transaction models
How to tell what the users are using? Licensing models mean that transaction logs are at the customer site, but subscription services have transaction logs and 75% of them aren't looking at them
Service product managers have userids and passwords, but they use product registration cards, so they're not using the data they have
Almost all companies in Silicon Valley are overdesigning the software, because they guess that users use 50% of available functions

Findings

SaaS slows down revenues, and increases early capital requirements, because there's a tasting model where they try it, and then might eventually take more
They don't have people that understand uptime, customer requirements, etc., so they need to change the structure of their firms

Industry metaphors:

Licensing software firms are grocers
Service firms are chefs
Service based pricing (check, please)
Operational metrics: meat thermometer

[Questions]

Quality is more obvious in SaaS

Most companies will fail, as they're missing the capabilities

Types

Different slices
Will see people tossing out a few critical functions

Why do it?

New entrants
People who will lose with new entrants

“Services Innovation: Sourcing In Lessons from True Professionals”, by Antti Ainamo and Marc Ventresca

Why not look at the people who do services only, and don't have anything to do with material products

There's a lot of manufacturing products

Services literature

More tangible
Consumption
Standardized
Customers in the core
Absence of inventory

Differences across services, Zeithaml 1981

High in search qualities
High in experience qualities
High in credence qualities, e.g. legal, dental
Interest in credence offerings

Collected some data in Silicon Valley, Britain and Finland

Case studies under way
1. Service marketing
2. Segments
- Medical diagnosis
- Law
- Consulting
- Advertising
- Architecture
- Design
3. The sociology of status ordering

Case study: Roschier Wallenius legal services in 1990s

Legal company, small business, rules that were broken by the leading partner
Problems and solutions would rise to the partner
Limited scale

Case: Ideo

Intra-organizational network, work in small groups, geographically distributed
They use computers, but that's not the essence of growth
John Kelly has written books, as a way to diffuse messages
Douglass North: Until have clearly specified rules, high uncertainty means "personalized exchange" person to person

Services mindset

Partner is the platform
Goods and supporting technologies as optional value-added

Partnership model

Reificiation: serving on a personal basis clients of high importance
Diffusion (books, mediat atttion) and emergence (problems, solutions)
Blueprinting (delegating to lower salary)

Implications

e.g. HP and Nokia or IBM and Nokia have "exclusive" strategic partnerships for different things
Multiple layers of hierarchies
Dedicated account managers

[Questions]

New? Ideas of branding

Target publication wasn't to introduce very new
Sociology of status, search qualities

Service innovation or service marketing?

Trying to show organization design for service innovations

Coevolving Innovations - 2007/04/28 13:00 Papers on "Service Innovation in Software and Financial Services" - Comments

2007/04/28 13:00 Papers on "Service Innovation in Software and Financial Services"

“eInsurance – Novel Services in the Electronic Environment”, by Ahonen, Salonen, Kivisto-Rahnasto, Jarvinen, and Silius

“Building SaaS Business on Top of Open Source – Economic and Legal Considerations, by Oksanen, Helander, Seppanen, Puhakka, and Laine

"Issues in Shifting from a Product-Based Business Model to a Service-Based Model", by Rich Mironov

“Services Innovation: Sourcing In Lessons from True Professionals”, by Antti Ainamo and Marc Ventresca