While openness can be quite helpful itself to improve services innovation, it becomes far more powerful when joined to the task of designing or redesigning a business model. As we have already seen in this book, services innovation can transform your business model. Offering your product as a service can, for example, convert fixed costs for your customers into variable costs. Services innovation can help you streamline your customers' processes, as when UPS took over its customers' shipping departments or Paychex took over payroll processing for its customers.

Services innovation in fact changes your business model in many ways. The distribution channels may change, and your interactions ...

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