Current models and practices

Figure 2.

Distribution of service design capabilities within the private and public sector in London

Thanks to its constantly increasing popularity, companies are acquiring service design capabilities following different paths.

Some of them rely on independent design agencies – often for projects of limited size ( 1 ) – or ask for the support of large management consultant agencies which have recently added the right internal capabilities acquiring design firms ( 2 ). Sometimes management consultancies ask for external support for specific pieces of work and act as clients for small independent design agencies ( 3 ).

Other companies are building in-house design departments or integrating service designers in their teams ( 4 ). Similarly, most of the public work is carried out internally by the Government Digital Services department ( 5 ).

Chiara Cacciani quote
Chiara Cacciani

Product Manager
at Facebook

“Companies are realising they can bring the service design work in-house and consultancies, as a consequence, need to create more tangible value.

On the consultancy side one evolution I found very interesting was to restructure their team around three core areas:
1) business model and strategy
2) what they define as "service design" - which consists in UX/UI work and
3) coding and building the MVP; as well as to have a venture approach – they would own/have shares in every product built, hence an interest in keep improving the product.

Big companies on the other hand are applying service design skills more and more internally. Triggered by cost efficiency, they are trying to bring designers in-house building innovation departments that focus mainly on new product development.”

Eva Kirchberger quote
Eva Kirchberger

DESMA Research Associate
at Engine London

“It seems like Engine has been responding to some requests from the market – service design is very trendy now and as we all know consultancies like McKinsey, Accenture, as well as digital firms are moving into this field. That causes a lot of pressure for Engine and also the clients’ expectations change because they start to compare the offered services to what they get from other firms. As those firms are mostly from other disciplines and areas, it is a strange place for Engine to be in because there are some expected things they wouldn’t necessarily have done.

On the other hand, it is also a huge opportunity because different expectations and needs make projects become bigger and they become comparable to the one which are typically done by management consultancies. So there’s this kind of frenemy situation: the management consultancy is kind of the enemy because they pitch for the same jobs, but at the same time they can be clients.”

Jason Mesut quote
Jason Mesut

Founder at Resonant Design and Innovation Ltd,
former Head of User Experience at Plan

“I think there are increasingly more consultancies buying user experience/digital studios. And they want to do more of the bigger system-thinking: when they don't just have UX people, they use some of their business analysts to understand cultural changes - I talk about the Deloitte, Accenture, EY, buying the agencies to try get into that space. And they're the better places to actually do those complex pieces of work because of the relationships they have with the legacy software and with very senior stakeholders

The real challenge with them is that you have the small design thing at the top - which is almost leading the sexy sell and often doesn't get bought in the project - and the reason they want that is that there's a whole source of systems implementation and support that follows: millions of pounds, years of contracts that follows those ideas. The difficulty is that, if you are in the design part, you can't recommend something that doesn't mean you are going to get all of that later value for the onsell. This is why I do believe in a sort of level of independence as well, where you want to go when you want some sort of independent advice: the thing is that, as a company, I might just want a little bit of work that is cheaper – and that's it. So I think there's a role for independent agencies as well.”

Marzia Arico quote
Marzia Aricò

Service Design & Strategy Consultant
at Livework Rotterdam

“A number of multinational companies are investing in hiring service designers to build the capabilities internally. I found these companies extremely interesting – what will this investment generate? They differ from other companies that use service design as a way to promote themselves through a shining appearance: those companies are actually changing from the inside, with some potential interesting outputs that will start becoming visible within the next 5 years.”

Oli Shaw quote
Oli Shaw

Creative Director & Design Strategy | Group Design Director
at Fjord

“Fjord has been acquired by Accenture two years ago: I believe what changed is the scale of the problems and the abilities to create more impact - which are both bigger. I've also worked in other agencies - big and small, before Fjord - and one of the challenges has always been having the right access to the right level within an organization to create impact. At Fjord we’ve got a 15 years of relationship with some of those clients - so if you need to go and see the CEO of the corporate company you're working for, Accenture gives you the ability, for instance, to explain how important that specific part of the project will be – or equally the CEO might come to us in case he needs help framing a specific unknown problem.

The split that I've been looking at more is within Ad agencies, - like AKQA, Wieden + Kennedy - that are moving more towards what service design is doing. This is happening both among traditional “Above The Line” agencies and branding agencies as well like McCollins. They Recently hired a couple of good people doing more of experience design: they were saying that by doing brand strategy they also do the service that goes into that. And then you have digital agencies and service design agencies like Fjord, IDEO and RDA and they are all combining into this area. There are also consulting companies; more and more of them are buying design agencies. So Fjord used to be in the previous group but is now in the “consulting” group

In the UK, the GDS (Government Digital Services) team "swallowed up" a lot of good service designers, and they work within the public sector: only a few agencies do government work. At Fjord we have done some public work but it would be only a 5% compared to a 95% of private clients. The reason why it is that high, is because the Digital Government Services probably had quite a hard line.”

Joel Bailey quote
Joel Bailey

Director at Livework UK,
Founder at Strategic Design Resourcing

“Within the private sector the demand is fragmented. There are a couple of main areas: financial services are a big buyer at the moment – even if I'm not sure they are using it pretty well; then I think any commodified service provider – and by that I mean a service provider who cannot compete on products, like gas or electricity companies where prices are heavily regulated. They use service design to differentiate. There are quite a few people that run product businesses that want to become service businesses and retain relationships with their clients. You also have agencies – brand, marketing, digital particularly – are trying to diversify through service design because their clients are asking for it. This is all within the private sector.

Public sector is really interesting – I spent one year of my career working around local governments – and it has become pretty much about GDS – government digital services. I believe they still talk about service design and try to follow service design principles but I think they are still pretty much about creating web content whereas I believe there is a very huge opportunity in multichannel service design to redesigning the proposition of governments. For instance, someone could probably do a very good job in reimagining how to do business rates or how you transact when buying a home: several things that needs to be reinvented just from a regulator point of view.”

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