HI David,
My impression is that your impression that GK and I (or I should just talk for myself) tend to slide away from the question of ROI is due to the fact that we are overlapping two different layers, or maybe three: I agree with you that service designers HAVE to demonstrate the ROI for their activity, but I was talking about service design RESEARCH. My question is: if Einstein had to demonstrate the ROI of the theory of relativity would he been allowed to work? (here I'm challenging my weak knowledge of past tenses, but I hope the sense is there). Yet scientists and researchers working on the technical and operative aspects of his studies were forced to demonstrate the ROI of their work. 
Perhaps this sounds again too rhetoric, however research works at this level in many cases. Of course a case based research may be able to demonstrate ROI for that specific case, but I understood your question was on service design in general, and I take it as a question at the theoretical level, which I cannot answer. As a referee of some service design conferences in the engineering design area I have seen several papers, especially from Asian colleagues, that have been able to demonstrate ROI of service design cases, but each of that case was calculating the ROI on the basis of criteria that were fixed "a priori", before and without the contribution of the designer. This probably introduces a possible third layer in this discussion, which connects with your very interesting analysis of the redesign of the Australian Taxation System. Indeed you suggest a question: for whom should the ROI be calculated? I don't know the question of the redesign of the Australian Taxation system as you do (I only know that I had to use a consultant, too, when I was in Australia, even if I had a relatively simple economy), but my question is whether the boundary shift you mention was exactly what the government or the ATO wanted to achieve: to outsource a large part of the work to the citizens or to consultants. IN this case the ROI for the ATO is easy to calculate, whereas it is quite hard to calculate the ROI if the target are the citizens, not only because one should calculate time and money, but also because there are intangible costs, such as the lack of trust in the system, the psychological distance between citizens and the ATO and, perhaps, the impression that in this complexity one could cheat the system better (here my Italian culture is emerging, as you see...).
But if we consider this layer (that is on strategic decisions, rather than on service design) I'm not sure that service designers (here I mean the people with the technical knowledge to organise front and back office of a service) can provide an answer to any question, they may be able to support decisions, but I'm not sure they should be accountable for calculating the ROI, especially when they derive from political or strategic considerations.
"hilsen" from a sunny Denmark.
Nicola

Nicola Morelli, PhD
Associate Professor, School of Architecture and Design
Aalborg University, Aalborg, Denmark
http://servicedesign.wikispaces.com/
Blog http://nicomorelli.wordpress.com/
skype: nicomorelli


-----Original Message-----
From: David Sless [mailto:[log in to unmask]] 
Sent: 2. maj 2009 10:32
To: phd-design phd-design
Cc: Nicola Morelli
Subject: Re: Service Design

Hi Nicola and all,

I think there is in your answer, like GK's, an attempt to slide away  
from the questions I have asked. So let me pin it down a bit more.

Many of us in design are aware that one of the things that design may  
be able to offer (I say *may be* advisedly) are new scenarios or even  
transformation of services into something entirely new. This happens  
to many of us designers in the Scoping Stage-that open ended fuzzy  
part of the process where we explore possibilities, find out about the  
context of use, collaborate with the stakeholders, and play 'what if'  
games by hypothetically shifting the problem boundaries. It's what  
comes immediately after scoping, by way of benchmarking the current  
state of affairs, that is largely absent from contemporary practice,  
including btw much that has come out of the UK Design Council.

You mention the Australian Taxation Service as an example. As it  
happens I know quite a lot about the Australian Taxation Office (ATO)  
and it's seeming championing of design. So let me use that as an  
example of why I think ROI, whether narrowly or broadly defined is  
critically important and why we cannot slide away from it by yet  
another 'transformation'.

There is much I cannot say, because of confidentiality, but there is  
enough in the public domain of the stuff I have published in the  
design literature and on my blog for people to get the gist.

First, the current wave of interest in design is a reinvention of an  
initiative in which I had quite a large part in, during the 1980s. One  
has to ask why, after significant investment in design research and  
training the ATO abandoned that initiative by the end of the 1980s.  
The reasons were economic and systemic and those reasons prevail  
today, only more so! In the late 1980s the ATO introduced a policy of  
what it called 'self assessment'. At the time, I remember asking  
senior people in the ATO who this 'self' was? Many did not understand  
the question.

Second, what was already happening in Australia at the time-a gradual  
drift by individuals and small businesses to using accountants and tax  
consultants as opposed to seeking help from the tax office- 
accelerated. The situation today is that well over 75% of the  
population and all businesses large and small use tax consultants and  
accountants as intermediaries between themselves and the ATO. The ATO  
has effectively outsourced the complexity of the system and with it  
most of the expertise in tax collecting and the administrative costs  
associated with tax collection. Roughly speaking, for every dollar the  
ATO spends, we-the citizens and tax payers-are estimated to spend  
about ten dollars in collecting, administrating and complying with the  
system, but nobody knows the full cost. As an example, in an  
organisation like ours, about half our administrative costs are  
concerned with collecting tax, compliance, and auditing. We are  
therefore a part of the Australian Taxation System( ATS), and we are  
collectively, as citizens and tax payers, a larger part than that run  
by the ATO. An interesting example of invisible boundary shifting.

It is significant that in all the recent flurry of excitable writing  
about redesigning the ATS all the emphasis is about what is happening  
is on the ATO, the smallest part of the overall system. Like most  
government departments the ATO has been asked by successive  
governments to do whatever it does with less money. The systemic  
effect of this is that the ATO has shrunk beyond the point where it  
could meaningfully run the ATS. It cannot even afford to recruit the  
professional it would need to redesign its own activity, let alone  
that of the entire system.

It is also significant that in all the talk about 'improvement' by the  
ATO and those who have written about its new found interest in design,  
there is no mention of  what might be acceptable evidence of this  
'improvement'. As a tax payer it's very simple. The system will be  
improved when it costs me less time and less money to administer. But  
to date, the tax office doesn't even not know how much it costs the  
rest of us to administer the system. If it doesn't know this, how will  
it know when it has brought about any improvement in the system? The  
ATO interest in design is, in my view, window dressing.

You say Nicola
> So I would take David question as the initial question, which need  
> revisions, because service design research (as in fact any research  
> on innovation) before answering the existing open question, tends to  
> re-frame the questions altogether.

Well that's fine and I embrace that, particularly if it means an end  
to death and taxes. But I suspect that even with the very best of  
Service Design (whatever that might be) we are a long way from making  
either death or taxes optional, let alone just life style choices.

So it's easy to get caught up in the rhetoric, play the change and  
transforming game, and forget the often grim, boring, concrete reality  
of ordinary life. I make a simple request as a researcher and a  
citizen of anyone who claims to be in the improvement business,  
whether through design or something else. Give me some evidence for  
the claims you make or stop making the claims until you have some  
evidence. But please don't tell me that it doesn't matter.

David
-- 

blog: www.communication.org.au/dsblog
web: http://www.communication.org.au