A case study from the Greek banking sector: NSD process formality

A number of authors have attempted to identify the extent of formality during the development of new services as well as the impact that a formal NSD procedure can have on new service performance. For instance, Avlonitis and Papastathopoulou (2000) reported that formality is positively related to the performance of new retail financial services. This finding is consistent with a number of different studies.

However, these findings can be challenged by those studies that have found limited use of formal procedures among service companies and financial organisations. It should also be mentioned that many authors have even doubted the need for a formal procedure since such an approach might cause extensive bureaucracy, unnecessary delays and overload of information leading to reduced creativity and flexibility.

Functional involvement during NSD

In the literature, any discussion of new product or service development can hardly continue without some reference to the people involved. Many executives from different organisational levels and departments within the bank might participate in the process of developing new services such as a new product function: the marketing department, other departments such as the financial or operations department, or a cross- functional team. Many studies concerning service companies and financial institutions in particular have demonstrated that marketing people are playing a decisive role within their organisations, as far as new service development is concerned.

Furthermore, many authors stress the importance of the existence of a cross- functional team, whose fundamental responsibilities are co-ordination of the whole effort and communication with a variety of publics within the bank.