Dear Nicola and David and all,

One way of assessing the effective ROI on design research leading to
improvements on services worldwide  is via the time profile of
organisational mergers.

Maximum optimal organisational size is limited by transaction cost (the cost
of servicing a transaction) leading it a dis-economy of scale that as
organisations increase in size eventually reaches break even point with the
economy of scale curve. (For the theory of this look at Ronald Coase's work
and the development of it by others)

Thus, it is beneficial for firms to increase in size to this breakeven point
for maximum organisation size. Increasing in size by mergers or growth
beyond that point results in lack of economic efficiency and the need to
divest organisational components that are not core business.

Improvements in services design occur in many ways and push the breakeven
point upwards in optimal organisational size terms.

There are many recent examples of this. For example, the service design
improvements for banks moving their customer transactions from tellers to
online offered a reduction in transaction costs for many services from
$25/transaction to 5 cents/transaction.  The reduced transaction costs means
the dis-economy of scale is reduced and the optimal organisational size is
much bigger. Hence the pressure for mergers and aggregation in the Banking
sector.

The net effect of improvements in service design is to reduce transaction
cost (in its many forms) and thus result in mergers  to quickly take
advantage of the financial benefits of economies of scale accessible by
reduced dis-economies of scale.

Hence, the merger rate profile offers the potential for reverse engineering
into ROI for service design improvements in a service-led economy.

Best wishes,
Terry
____________________

Dr. Terence Love, FRDS, AMIMechE, PMACM
Director Design-focused Research Group, Design Out Crime Research Group
Researcher, Digital Ecosystems and Business Intelligence Institute
Associate,  Planning and Transport Research Centre
Curtin University, PO Box U1987, Perth, Western Australia 6845
Mob: 0434 975 848, Fax +61(0)8 9305 7629, [log in to unmask] 
Visiting Professor, Member of Scientific Council 
UNIDCOM/ IADE, Lisbon, Portugal
Honorary Fellow, Institute of Entrepreneurship and Enterprise Development
Management School, Lancaster University, Lancaster, UK
____________________


-----Original Message-----
From: PhD-Design - This list is for discussion of PhD studies and related
research in Design [mailto:[log in to unmask]] On Behalf Of Nicola
Morelli
Sent: Saturday, 2 May 2009 2:29 PM
To: [log in to unmask]
Subject: Re: Service Design

HI David and all,
I suspect the question David asked, in the terms he asked it, covers just a
small part of design research on services. Understanding the ROI in terms of
how design would improve the quality of existing services is a legitimate
question, that concern the redesign of existing services or processes in the
back office of existing services, or experiences in the front office.