Service Business Model Innovation: A Conceptual Model and a Framework for Management Consulting

Abstract

This paper develops a conceptual model and a diagnostic framework to assist service innovation managers and policy makers in managing and promoting service business model innovation. We distinguish the concepts of "service innovation," which views service as a perspective on value creation, from "innovative services," which consider services as merely a category of marketing offerings supplement to the existing product lines. We also define service business model innovation as the use of new knowledge (both technological and market knowledge) that capitalizes on the disruptive attributes of specific (emerging) technologies and service characteristics from the perspective of value creation to design and implement an innovative way of offering solutions that satisfy customer's (both explicit and latent) demands. CEO must establish a core vision on service innovation and take the leadership in transforming the entire organizational culture and processes into a service-oriented solution provider in order to create and sustain competitive advantage.