Students' zone - A selection of Box Cases

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Box case 3.5

Halifax Building Society – new service development

The Halifax Building Society in the UK focuses on the fast development of
new service products. These include new lending packages for house
purchasers, which for instance allow borrowers to customize repayment levels
to their needs over a number of years. Halifax have reduced the time to
develop and introduce new mortgage packages from six months to a matter
of a few weeks, in response to a more competitive market. There are four main
steps to their development process and in each of these the responsibilities of
each department are clearly defined:

(1) Concept development. This takes account of previous products, competitive
products and perceived customer requirements. The concept will be
refined, taking particular account of the views of marketing and operations.
An initial check is made on whether the concept can be delivered
with existing systems or whether it will require changes at the operational
level.
(2) Trial. Customers (in focus groups) are asked their opinions of the new
service. This market research largely replaces the market piloting of
new mortgage packages, which was common in the industry a few
years ago.
(3) Delivery system definition. The delivery of a new service requires that a
suitable system is set-up. The system means all resources involved in the
delivery, which typically will include computer resources (for tracking
payment level, etc.) and human resources (for marketing and administering
the service).
(4) Introduction. Once the delivery system has been defined, the introduction
of the new service largely involves the implementation of training
programmes to explain it to staff, preparation of necessary software to
run systems, etc.