March 8, 2021

Business Design vs Service Design - Same same, but different

Joao

Business Design is hot right now


You have probably seen news headlines in recent years about how design-driven companies have been outperforming the S&P 500 by a significant margin, year-on-year.


Perhaps you read about the recent stream of acquisitions of design agencies by top IT consultancy firms - Accenture x Fjord; Altran x Frog; Capgemini x Idean.


Or the fact that top tier consulting firms are building their own venture & design branches - BCG x BCG Digital Ventures; McKinzey x Leap by McKinzey.


Even if you didn’t know about any of these things, by now the message is loud and clear: Business and Design are merging into one. We call it Business Design.


What is Business Design?


“Business Design applies design principles and methodologies to build profitable and sustainable businesses."

What about Service Design? Aren’t they the same thing?


Well, no. Not really...


Business Design and Service Design are two different disciplines that coexist under the same umbrella of Design Thinking principles. However, they perform very different functions in the design process.


Service design focuses on desirability - designing services, systems, and processes to deliver an excellent customer experience. 


It’s all about building products and services that people want. 


“Ok, you have a product people want, you can build it, but can you build a business around it?”


Business design focuses on viability - making sure there’s a business case for every new product and service conceived. 


That’s the focus of Business Designers, alongside Design Strategists and Strategy Consultants.




Ok, I’m convinced. But in practice, how are they different?


We have already seen that Business Design focuses on the business side of things (business model, revenue sources, cost structure) while Service Design is focused on how the customer experiences the product/service.


We have also seen that both disciplines work under design thinking principles, which means they both use design thinking methods such as building and testing prototypes.


Because their focus is different, the two disciplines will differ in terms of Research, Tools, Deliverables, Goals and Success metrics. 


Let’s explore each of these elements in more detail.


Research 


While a Service Designer focuses on collecting data about the user, it’s behaviours, pains or needs via traditional interviews, mock interviews, ethnographic studies and reports, the Business Designer searches for data to quantify the business opportunity and its expected growth prospects.


Research data includes the size and evolution of the industry, investment trends, value chains analysis, just to name a few. Most of the work involves desk research but it can be balanced with expert interviews or startup case studies.


Tools


In order to process and derive actionable insights from all the information collected both disciplines make use of distinctive tools.


Empathy maps, customer journey maps, service blueprints, customer personas are some of the tools inside the Service Designer tool box. 


The value proposition canvas, business model canvas, blue ocean strategy canvas, STEEPV analysis are all tools at the disposal of the Business Designer. 


Ps: if you are interested in using some of these cool tools, go ahead and download them for free at our resource & tools page here


Deliverables


The deliverables are, simply put, the practical outcomes of conducting research and analysis and framing those results in an actionable manner.


After a few days or weeks of hard work, Service Designers can present comprehensive maps that depict how customers behave, feel and interact with certain products and services. 


Some of these products and services are real, they exist in the marketplace, while others might be prototypes - an early sample, model, or release of a product built to test a concept or process.


The Business Designers, on the other hand, might present detailed scenarios of how different business models behave for certain target segments, what revenues and costs they generate and how they might impact operations and production/delivery. 


Ultimately, they provide key insights into different business strategies and their implications. This is also done through the analysis of real and fictional cases (prototypes). 


Goals & Success Metrics


By now, this element is probably clear to you. Service Design’s goal is to study, analyse and create great customer experiences while Business Design’s goal is to embed in those products and services a revenue generating model that optimizes for profitability over the long term.


Thus, the ultimate success metric for Service Designers is engagement - how much customers love and interact with a product/service. 


The measure of success for Business Designers is profitable growth - a business that generates more revenues than costs incrementally in time.  



Of course, the two are interdependent and interlinked. Historically, the most successful products and services were always a powerful combination of great customer experience with a strong business model. Just think about the products and services you use and love today.


Despite their differences, Service Design and Business Design should be seen as complementary to each other and not as substitutes or rivals. 


Successful companies make use of both to craft great products and deliver memorable experiences that support long lasting businesses.


If you want to learn more about Business Design, you might want to try out our business design course and start exploring some of the methodologies business designers are using to solve business problems.


Get free access to the business design course here


Photo by Parsoa Khorsand on Unsplash


We hope this article has proven useful to you. We would love to hear your thoughts and comments. 


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