Ssmed short 20101118 v8

© 2010 IBM Corporation

IBM University Programs World Wide (IBM UP)

SSME+D (for Design) Evolving: Update on Service Science Progress & Directions

Dr. James (“Jim”) C. [email protected], IBM University Programs World WideEvent, Place, Date

Working Together to Build a Smarter Planet

2 © 2010 IBM CorporationIBM UP (University Programs) WW

Outline

Stimulus: Service Growth– The World– IBM

Response: Service Science Priorities– Cambridge University Report– Arizona State University Report

Evolution: SSME+D (for Design) for a Smarter Planet– What is Smarter Planet?

– What improves Quality-of-Life?

– What is a Service System? Service Science?– How to visualize Service Science?– What’s the Skills Goal?

– Where are the Opportunities?– Where is the “Real Science” in SSME+D?


42%6433 3 1.4Germany

37%261163 2.1Bangladesh

19%201070 1.6Nigeria

45%6728 5 2.2Japan

64%692110 2.4Russia

61%661420 3.0Brazil

34%391645 3.5Indonesia

23%7623 1 5.1U.S.

35%23176014.4India

142%29224925.7China

40yr ServiceGrowth

S%

G%

A %

Labor% WW

Nation

World’s Large Labor ForcesA = Agriculture, G = Goods, S = Service

20102010

CIA Handbook, International Labor OrganizationNote: Pakistan, Vietnam, and Mexico now larger LF than Germany

US shift to service jobs

(A) Agriculture:Value from harvesting nature

(G) Goods:Value from making products

(S) Service:Value from

IT augmented workers in smarter systemsthat create benefits for customers

and sustainably improve quality of life.

Service Growth: The World


0

20

40

60

80

100

1982

1988

1994

1998

2004

2006

2007

2008

2009

Year

Reven

ue (

$B

)

Services

Software

Systems

Financing

Service Growth: IBM

B2B Service Projects: IT (data center, call centers) & business process outsourcing/reengineering, systems integration, organizational change, etc.

What do IBM Service Professionals Do? Run things on behalf of customers,help Transform customers to adopt best practices, and Innovate with customers.

Revenue Growth by Segment

© 2010 IBM Corporation

IBM University Programs World Wide (IBM UP)

StakeholderPriorities

Education

Research

Business

Government

StakeholderPriorities

Education

Research

Business

Government

Service Systems

Customer-provider interactions that enable value cocreation

Dynamic configurations of resources: people, technologies, organisations and information

Increasing scale, complexity and connectedness of service systems

B2B, B2C, C2C, B2G, G2C, G2G service networks

Service Systems

Customer-provider interactions that enable value cocreation

Dynamic configurations of resources: people, technologies, organisations and information

Increasing scale, complexity and connectedness of service systems

B2B, B2C, C2C, B2G, G2C, G2G service networks

Service Science

To discover the underlying principles of complex service systems

Systematically create, scale and improve systems

Foundations laid by existingdisciplines

Progress in academic studies and practical tools

Gaps in knowledge and skills

Service Science

To discover the underlying principles of complex service systems

Systematically create, scale and improve systems

Foundations laid by existingdisciplines

Progress in academic studies and practical tools

Gaps in knowledge and skills

Develop programmes & qualifications

Develop programmes & qualifications

Service Innovation

Growth in service GDP and jobs

Service quality & productivity

Environmental friendly & sustainable

Urbanisation &aging population

Globalisation & technology drivers

Opportunities for businesses, governments and individuals

Service Innovation

Growth in service GDP and jobs

Service quality & productivity

Environmental friendly & sustainable

Urbanisation &aging population

Globalisation & technology drivers

Opportunities for businesses, governments and individuals

Skills& Mindset

Skills& Mindset

Knowledge& Tools

Knowledge& Tools

Employment& Collaboration

Employment& Collaboration

Policies & Investment

Policies & Investment

Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015

Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015

Encourage an interdisciplinary approach

Encourage an interdisciplinary approach

The white paper offers a starting point to -

The white paper offers a starting point to -

Priorities: Succeeding through Service Innovation - A Framework for Progress(http://www.ifm.eng.cam.ac.uk/ssme/)

Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008)

Glossary of definitions, history and outlook of service research, global trends, and ongoing debate

1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions


Priorities: Research Framework Priorities: Research Framework for the Science of Servicefor the Science of ServicePervasive Force: Leveraging Technology to Advance Service

Strategy Priorities

Execution Priorities

Fostering ServiceInfusion and Growth

Improving Well-Being through

Transformative Service

Creating and Maintaining a Service Culture

Stimulating Service Innovation

Enhancing Service Design

Optimizing Service Networks and Value Chains

Effectively Branding and Selling Services

Enhancing the Service Experience through

Cocreation

Measuring andOptimizing the Value of

Service

Development Priorities

Source: Global Survey of Service Research Leaders (Ostrom et al 2010)


Evolution: SSME+D (for Design) for a Smarter PlanetWhat is Smarter Planet? Harmonized smarter systems.

INSTRUMENTED

We now have the ability to measure, sense and see the exact condition of practically everything.

INTERCONNECTED

People, systems and objects can communicate

and interact with each other in entirely new

ways.

INTELLIGENT

We can respond to changes quickly and accurately, and get better results

by predicting and optimizing

for future events.

WORKFORCE

PRODUCTS

SUPPLY CHAIN

COMMUNICATIONS

TRANSPORTATION BUILDINGS

IT NETWORKS


What improves Quality-of-Life? Service System Innovations

A. Systems that focus on flow of things that humans need (~15%*)1. Transportation & supply chain

2. Water & waste recycling/Climate & Environment

3. Food & products manufacturing

4. Energy & electricity grid/Clean Tech

5. Information and Communication Technologies (ICT access)B. Systems that focus on human activity and development (~70%*)

6. Buildings & construction (smart spaces) (5%*)

7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*)

8. Banking & finance/Business & consulting (wealthy) (21%*)

9. Healthcare & family life (healthy) (10%*)

10. Education & work life/Professions & entrepreneurship (wise) (9%*)C. Systems that focus on human governance - security and opportunity (~15%*)

11. Cities & security for families and professionals (property tax)

12. States/regions & commercial development opportunities/investments (sales tax)

13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax)

20/10

0/19?

2/72/1

7/61/1

5/17

1/024/24

2/207/10

5/2

3/30/0

1/2

Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities

* = US Labor % in 2009.

“61 papers Service Design Conference 2010 (Japan) / 75 papers Service Marketing Conference 2010 (Portugal)”


What is a Service System? What is Service Science? …customers just name <your favorite provider> …researchers just name <your favorite discipline>

Economics & Law

Design/ Cognitive Science Systems

Engineering

OperationsComputer Science/

Artificial Intelligence

Marketing

“a service system is a human-made systemto improve customer-provider interactions,

or value-cocreation”

“service science isthe interdisciplinary study of

service systems &value-cocreation”


How to visualize service science? The Systems-Disciplines MatrixSystems that focus on flows of things Systems that governSystems that support people’s activities

transportation & supply chain water &

waste

food &products

energy & electricity

building & construction

healthcare& family

retail &hospitality banking

& finance

ICT &cloud

education &work

citysecure

statescale

nationlaws

social sciences

behavioral sciences

management sciences

political sciences

learning sciences

cognitive sciences

system sciences

information sciences

organization sciences

decision sciences

run professions

transform professions

innovate professions

e.g., econ & law

e.g., marketing

e.g., operations

e.g., public policy

e.g., game theory and strategy

e.g., psychology

e.g., industrial eng.

e.g., computer sci

e.g., knowledge mgmt

e.g., stats & design

e.g., knowledge worker

e.g., consultant

e.g., entrepreneur

stake

holders

Customer

Provider

Authority

Competitors

resources

People

Technology

Information

Organizations

change

History(Data Analytics)

Future(Roadmap)

value

Run

Transform(Copy)

Innovate(Invent)

Starting Point 1: The Stakeholders (As-Is)

Starting Point 2: Their Resources (As-Is)

Change Potential: Thinking (Has-Been & Might-Become)

Value Realization: Doing (To-Be)

disciplines

systems


What is the skills goal? T-Shaped professionals, ready for T-eamwork!

Many disciplines(understanding & communications)

Many systems(understanding & communications)

Deep in one discipline

(an

alytic th

inkin

g & p

rob

lem

solvin

g)

Deep in one system

(an

alytic th

inkin

g & p

rob

lem

solvin

g)

Many team-oriented service projects completed(resume: outcomes, accomplishments & awards)

SSME+D = Service Science, Management, Engineering + Design


Where are the opportunities? Everywhere!

13

Time

ECOLOGY

14BBig Bang

(NaturalWorld)

10KCities

(Human-MadeWorld)

Sun

writing(symbols and scribes)

Earth

written laws

bacteria(uni-cell life)

sponges(multi-cell life)

money(coins)

universities

clams (neurons)trilobites (brains)

printing press (books)steam engine200M

bees (socialdivision-of-labor)

60

transistor

Where is the “Real Science” in SSME+D?In the interdisciplinary sciences that study the natural and human-made worlds… Unraveling the mystery of evolving hierarchical-complexity in new populations…To discover the world’s structures and mechanisms for computing non-zero-sum


Thank-You! Questions?

Dr. James (“Jim”) C. SpohrerDirector, IBM University Programs (IBM UP) [email protected]

“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org“Universities are major employers in cities and key to urban sustainability.” – Coalition of USU

“Cities learning from cities learning from cities.” – Fundacion Metropoli“The future is already here… It is just not evenly distributed.” – Gibson

“The best way to predict the future is to create it/invent it.” – Moliere/Kay“Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer

“Today’s problems may come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells

“The future is born in universities.” – Kurilov“Think global, act local.” – Geddes


Understanding the Human-Made World

See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html

Also see: Symbolic Species, DeaconCompany of Strangers, SeabrightSciences of the Artificial, Simon


World Population & Service System Scaling


Service System Ecology: Conceptual Framework

Resources: People, Technology, Information, Organizations Stakeholders: Customers, Providers, Authorities, Competitors Measures: Quality, Productivity, Compliance, Sustainable Innovation Access Rights: Own, Lease, Shared, Privileged

Ecology(Populations & Diversity)

Entities(Service Systems)

Interactions(Service Networks)

Outcomes(Value Changes)

Value Proposition (Offers/Risks/Incentives)

Governance Mechanism (Rules/Constraints/Penalties)

Access Rights(Relationships)

Measures(Rankings of Entities)

Resources(Roles in Processes)

Stakeholders(Valuation Perspectives)

win-win

lose-lose win-lose

lose-win

Identity(Aspirations/Lifecycle)

Reputation(Opportunities/Variety)

prefer sustainable non-zero-sum

outcomes


How many service system entities are there? ~10B

Nations (~100)– States/Provinces (~1000)

• Cities/Regions (~10,000)– Educational Institutions (~100,000)– Healthcare Institutions (~100,000)– Other Enterprises (~10,000,000)

• Largest 2000• >50% GDP WW

– Families/Households (~1B)– Persons (~10B)

Balance/Improve– Quality of Life, generation after generation

• GDP/Capita– Quality of Service

• Customer Experience– Quality of Jobs

• Employee Experience– Quality of Investment-Opportunities

• Owner Experience• Entrepreneurial Experience

– Sustainability• GDP/Energy-Unit

– % Fossil– % Renewable

• GDP/Mass-Unit– % New Inputs– % Recycled Inputs

Nation

State/Province

City/Region

EducationalInstitution

HealthcareInstitution

OtherEnterprises(job roles)

Family(household)

Person(professional)

19 © 2010 IBM CorporationIBM UP (University Programs) WW19

Vision for the Educational Continuum: Individuals & Institutions Learning

Any Device Learning

TECHNOLOGY IMMERSION

PERSONAL LEARNING PATHS

Student-Centered Processes

KNOWLEDGE SKILLS

Learning Communities

GLOBAL INTEGRATION

Services Specialization

ECONOMIC ALIGNMENT

Systemic View of Education

Intelligent• Aligned Data• Outcomes Insight

Instrumented• Student-centric• Integrated Assessment

Interconnected• Shared Services• Interoperable Processes

ContinuingEducation

HigherEducation

SecondarySchool

PrimarySchool

WorkforceSkills

Individuals Learning Continuum TheEducationalContinuum

Institutio

ns Learn

ing Contin

uum

EconomicSustainability

http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html


Fun: CityOne Game to Learn “CityInvesting”Serious Game to teach problem solving for real issues in key industries, helping companies to learn how to work smarter. Energy, Water, Banking, Retail

http://www.ibm.com/cityone


Priority 1: Urban Sustainability & Service Innovation Centers

A. Research: Holistic Modeling & Analytics of Service SystemsModeling and simulating cities will push state-of-the-art capabilities for planning interventions in

complex system of service systems

Includes maturity models of cities, their analytics capabilities, and city-university interactions

Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system

Real-world data and advanced analytic tools are increasingly available

B. Education: STEM (Science Tech Engineering Math) Pipeline & LLLCity simulation and intervention planning tools can engage high school students and build STEM

skills of the human-made world (service systems)

Role-playing games can prepare students for real-world projects

LLL = Life Long Learning

C. Entrepreneurship: Job CreationCity modeling and intervention planning tools can engage university

students and build entrepreneurial skills

Grand challenge competitions can lead to new enterprises

22 © 2010 IBM CorporationIBM University Programs (IBM UP) WW

A. Flow of things1. Transportation: Traffic congestion; accidents and injury

2. Water: Access to clean water; waste disposal costs

3. Food: Safety of food supply; toxins in toys, products, etc.

4. Energy: Energy shortage, pollution

5. Information: Equitable access to info and comm resourcesB. Human activity & development

6. Buildings: Inefficient buildings, environmental stress (noise, etc.)

7. Retail: Access to recreational resources

8. Banking: Boom and bust business cycles, investment bubbles

9. Healthcare: Pandemic threats; cost of healthcare

10. Education: High school drop out rate; cost of educationC. Governing

11. Cities: Security and tax burden

12. States: Infrastructure maintenance and tax burden

13. Nations: Justice system overburdened and tax burden

Cities as Holistic Service Systems: All the systems

Example: Singapore


Universities as Holistic Service Systems: All the systems

A. Flow of things1. Transportation: Traffic congestion; parking shortages.

2. Water: Access costs; reduce waste3. Food: Safety; reduce waste.4. Energy: Access costs; reduce waste5. Information: Cost of keeping up best practices.

B. Human activity & development6. Buildings: Housing shortages; Inefficient buildings

7. Retail: Access and boundaries. Marketing.8. Banking: Endowment growth; Cost controls9. Healthcare: Pandemic threat. Operations.10. Education: Cost of keeping up best practices..

C. Governing11. Cities: Town & gown relationship.12. States: Development partnerships..13. Nations: Compliance and alignment.


Why Universities Matter: % GDP and % Top 500

Japan

ChinaGermany

France

United KingdomItaly

Russia SpainBrazilCanada

IndiaMexico AustraliaSouth Korea

NetherlandsTurkey

Sweden

y = 0,7489x + 0,3534R² = 0,719

0

1

2

3

4

5

6

7

8

9

0 1 2 3 4 5 6 7 8 9

% global GDP

% top 500 universities

Strong Correlation (2009 Data): National GDP and University Rankings


Teaching SSME+D

Fitzsimmons & Fitzsimmons– Graduate Students

– Schools of Engineering & Businesses

Teboul– Undergraduates

– Schools of Business & Social Sciences– Busy execs (4 hour read)

Ricketts– Practitioners– Manufacturers In Transition

And 200 other books…– Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs,

Aquilano; Davis, Heineke; Heskett, Sasser, Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter; Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels, Warf; Checkland, Holwell; Cooper,Edgett; Hopp, Spearman; Womack, Jones; Johnston; Heizer, Render; Milgrom, Roberts; Norman; Pine, Gilmore; Sterman; Weinberg; Woods, Degramo; Wooldridge; Wright; etc.

URL: http://www.cob.sjsu.edu/ssme/refmenu.asp

Reaching the Goal: How Managers Improve

a Services Business Using Goldratt’s

Theory of ConstraintsBy John Ricketts, IBM

Service Management:Operations, Strategy,

and Information Technology

By Fitzsimmons and Fitzsimmons, UTexas

Service Is Front Stage:Positioning services for

value advantageBy James Teboul, INSEAD


Reality: “Product-Service-System” Networks

F

B

ServiceSystem Entity

Product-Service-System

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

F F

B B

ServiceBusiness

ProductBusiness

Front-Stage Marketing/Customer Focus

Back-Stage Operations/Provider Focus

Ba

sed

on

Le

vitt, T (1

97

2) P

rod

uctio

n-lin

e a

pp

roa

ch to

service

. HB

R.

e.g., IBM

e.g., Citibank

“Everyb

od

y is in se

rvice... S

om

eth

ing is w

ron

g…

Th

e in

du

strial w

orld

ha

s cha

nge

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ster th

an

ou

r taxo

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mie

s.”.

© 2005 IBM Corporation27 © 2010 IBM Corporation

Service-dominant logic

Service is the application of competences for the benefit of another entity

Service is exchanged for service

Value is always co-created

Goods are appliances for delivery

All economies are service economies

All businesses are service businesses

Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68, 1 – 17.

Resource Integrator/Beneficiary

(“Firm”)

Resource Integrator/Beneficiary

(“Customer”)

Value C

o-crea

tion

Value Configuration

Dens

ity


What is value?

Value depends on the capabilities a system has to survive and create beneficial change in its environment.

Taking advantage of the service another system offers means incorporating improved capabilities.

Value can be defined as system improvement in an environment.

All ways that systems work together to improve or enhance one another’s capabilities can be seen as being value creating.

Vargo, S. L., Maglio, P. P., and Akaka, M. A. (2008). On value and value co-creation: A service systems and service logic perspective. European Management Journal, 26(3), 145-152.


What is a service system?

Service involves at least two entities applying competences and making use of individual and shared resources for mutual benefit.

We call such interacting entities service systems.

A. Service Provider

• Individual• Organization• Public or Private

C. Service Target: The reality to be transformed or operated on by A, for the sake of B

• People, dimensions of• Business, dimensions of• Products, goods and material systems• Information, codified knowledge

B. Service Client

• Individual• Organization• Public or Private

Forms ofOwnership Relationship

(B on C)

Forms ofService Relationship(A & B co-create value)

Forms ofResponsibility Relationship

(A on C)

Forms ofService Interventions

(A on C, B on C)

Gadrey, J. (2002). The misuse of productivity concepts in services: Lessons from a comparison between France and the United States. In J. Gadrey & F. Gallouj (Eds). Productivity, Innovation, and Knowledge in Services: New Economic and Socio-economic Approaches. Cheltenham UK: Edward Elgar, pp. 26 – 53.

Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a science of service systems. Computer, 40, 71-77.


Resources are the building blocks of service systems

Formal service systems can contractInformal service systems can promise/commit

Trends & Countertrends (Evolve and Balance):Informal <> FormalSocial <> Economic

Political <> LegalRoutine Cognitive Labor <> ComputationRoutine Physical Labor <> Technology

Transportation (Atoms) <> Communication (Bits)Qualitative (Tacit) <> Quantitative (Explicit)

First foundational premise of service science

Service system entitiesdynamically configure

four types of resources

The named resource isPhysical

orNot-Physical

(physicists resolve disputes)

The named resource hasRights

orNo-Rights

(judges resolve disputeswithin their jurisdictions)

Physical

Not-Physical

Rights No-Rights

2. Technology

4.. SharedInformation

1. People

3. Organizations

Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..


Value propositions are the building blocks of service system networks

Second foundational premise of service science

Service system entitiescalculate value from multiple

stakeholder perspectives

A value propositions canbe viewed as a request from

one service system to anotherto run an algorithm

(the value proposition)from the perspectives of

multiple stakeholders accordingto culturally determined

value principles.The four primary stakeholderperspectives are: customer,

provider, authority, and competitor

StakeholderPerspective(the players)

MeasureImpacted

PricingDecision

BasicQuestions

ValuePropositionReasoning

1.Customer Quality(Revenue)

ValueBased

Should we?(offer it)

Model of customer: Do customers want it? Is there a market? How large? Growth rate?

2.Provider Productivity(Profit)

CostPlus

Can we?(deliver it)

Model of self: Does it play to our strengths? Can we deliver it profitably to customers? Can we continue to improve?

3.Authority Compliance(Taxes andFines)

Regulated May we?(offer anddeliver it)

Model of authority: Is it legal? Does it compromise our integrity in any way? Does it create a moral hazard?

4.Competitor(Substitute)

Sustainable Innovation(Marketshare)

Strategic Will we?(invest tomake it so)

Model of competitor: Does it put us ahead? Can we stay ahead? Does it differentiate us from the competition?

Value propositions coordinate & motivate resource access



Access rights are the building blocks of service system ecology(culture and shared information)

service = value-cocreationB2BB2CB2GG2CG2BG2GC2CC2BC2G***

provider resourcesOwned OutrightLeased/ContractShared Access

Privileged Access

customer resourcesOwned OutrightLeased/ContractShared Access

Privileged Access

OO

SA

PA

LC

OO

LC

SA

PA

S AP C

Competitor Provider Customer Authority

value-proposition change-experience dynamic-configurations

(substitute)

time

Third foundational premise of service science

Service system entitiesreconfigure access rights to

resources by mutually agreed tovalue propositions

Access rights Access to resources that are owned

outright (i.e., property)

Access to resource that are leased/contracted for (i.e., rental car, home ownership via mortgage, insurance policies, etc.)

Shared access (i.e., roads, web information, air, etc.)

Privileged access (i.e., personal thoughts, inalienable kinship relationships, etc.)



Premises of service science: What service systems do

Service system entitiesdynamically configure (transform)

four types of resources

Service system entitiescalculate value from multiple

stakeholder perspectives

Service system entitiesreconfigure access rights

to resources by mutually agreed to value propositions

S AP C

Physical

Not-Physical

Rights No-Rights

2. Technology

4.. SharedInformation

1. People

3. Organizations

StakeholderPerspective

MeasureImpacted

Pricing Questions Reasoning

1.Customer Quality Value Based

Should we? Model of customer: Do customers want it?

2.Provider Productivity CostPlus

Can we? Model of self: Does it play to our strengths?

3.Authority Compliance Regulated May we? Model of authority: Is it legal?

4.Competitor Sustainable Innovation

Strategic Will we? Model of competitor: Does it put us ahead?


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