New Service Development Success Factors

The factors which can ensure the success of the new service development process are as follows:

1) Nature of Service: These factors are associated with exploring the basic nature of the service in terms of cost, complexity, innovation, quality, and whether it is people or equipment based. The success factors associated with service are innovation, quality, adaptability, and exportability.

The success factors add value to the users’ service and offer a competitive advantage to the service providers.

2) Product-Market Characteristics: The factors which help in ensuring the market success of the new service/product are its suitability, attractiveness, competitiveness, and demand satisfaction of the particular market segment. The assessment of the marketability of a new product or service is obvious.

Usually, those products or services are successful in the target market, which help in catering to identified customers’ needs, which are adaptable enough to match their changing needs, which consistently match the values of the customers and the operating systems.

However, it is quite disappointing that many market researchers fail to assess the market potential completely.

3) Project Synergy: Synergy is associated with two dimensions of success, viz., consistency with the technical competence, resources, funds or the firm, and competency with the current product line and experiences of clientele.

The successful service is the one that “matches the needs of the customers and is supported by expertise knowledge for catering the service.” Therefore, service system similarity is crucial for the new service development.

4) NSD Process: Almost every study concerned with measuring success factors suggested developing a formal and systematic NSD process. It is a crucial factor in the success of new service development. The speed and process formulation for NSD is statically and significantly related, where information technology (IT) functions as an enabling factor.

5) Service Innovation Culture: The last important success factor for the new service development is the organization’s service innovation culture. The organizational culture is represented by the management style and organizational structure. It has been observed by Cooper and Kleinschmidt that a positive culture and climate is vital for successful product development.

Organizational practices that promote an optimistic work culture include supportive teamwork, encouragement of product champions, rewards, supportive risk-taking behaviors, giving independence in handling failures, motivation for novelty and innovation, offering time off for thinking new ideas, and providing venture capital and seed money for internal projects.

It is proposed that those cultural factors which have a positive influence on NPD may also affirmatively affect NSD efforts. For example, it has been found by Froehle et al. that use of cross-functional teams helps in increasing the efficiency of the NSD process but not the speed.

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