Establishing SSME as a new academic discipline SSME

Establishing SSME as a new academic discipline: SSME Doctoral Workshop Trying to start to think rationally about. . Some Thoughts about Service Science Research. . ? Steve Street, IBM (UK) Ltd © 2007 IBM Corporation

Establishing SSME as a new academic discipline: Services Research § Content § Problems §

Background - Drivers Ten Nations US Employment History & Trends Total 50% of World Wide Labor A = Agriculture, G = Goods, S = Services Nation Labor % A % G % Service Growth China 21. 0 50 15 35 191% India 17. 0 60 17 23 28% U. S. 4. 8 3 27 70 21% Indonesia 3. 9 45 16 39 35% Brazil 3. 0 23 24 53 20% Russia 2. 5 12 23 65 38% Japan 2. 4 5 25 70 40% Nigeria 2. 2 70 10 20 30% Bangladesh 2. 2 63 11 26 30% Germany 1. 4 3 33 64 44% International Labor Organization 4 1980 -2005 PC Age United States 2005 (A) Agriculture: Value from harvesting nature (G) Goods: Value from making products (S) Services: Value from enhancing the capabilities of things (customizing, distributing, etc. ) and interactions between things The largest labor force migration in human history is underway, driven by global communications, business and technology growth, urbanization and low cost labor Service Research and Innovation | Almaden Research Center © 2007 IBM Corporation © 2005 IBM Corporation

SSME: Service Science, Management, and Engineering Background - Drivers - IBM Revenue and Profits Mix Fundamental Service Science Challenge: Scaling & learning curves are different for IT manufacturing and IT services How to invest to make progress (efficiency effectiveness, and sustainable growth)? 5 IBM Research © 2007 IBM Corporation

SSME: Service Science, Management, and Engineering Background - Drivers - IBM Revenue and Profits Mix So there’s an important Topic for Service Science to address but …. Fundamental Service Science Challenge: Scaling & learning curves are different for IT manufacturing and IT services How to invest to make progress (efficiency effectiveness, and sustainable growth)? 6 IBM Research © 2007 IBM Corporation

Establishing SSME as a new academic discipline: What is the Topic / What do we care about ? Specific main Content & Type of ‘Services’ – IT Services, High Value Engineering , Financial Services - Tangible SMB Manufacturing, ‘Engineering’ Public Sector IT Services Digital Media Intangible 2 C 7 SSME Doctoral Workshop Financial Services 2 B Manchester 19 September 2008 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: What is the Topic ? Specific main Content & Type of ‘Services’ – IT Services, High Value Engineering , Financial Services - Tangible SMB Public Sector Digital Media Intangible 2 C 8 SSME Doctoral Workshop Manufacturing, ‘Engineering’ Content High Value Services IT Services There is still a need to Focus on relevant content Understand the phenomena Financial Services 2 B Manchester 19 September 2008 © 2007 IBM Corporation

Is that enough for a science? § § Data (Observation) Model (Theory) Analytics (Testing Validity) Take Action (Utility) Mature 9 § § Scientific Method (Standards of Rigor) Scientific Community (Body of Knowledge) Scientific Instrumentation (Tools & Math) Value of Science (Professional Relevance) Emerging Service Research and Innovation | Almaden Research Center © 2007 IBM Corporation © 2005 IBM Corporation

Is that enough for a science? § § Data (Observation) Model (Theory) Analytics (Testing Validity) Take Action (Utility) § § Scientific Method (Standards of Rigor) Scientific Community (Body of Knowledge) Scientific Instrumentation (Tools & Math) Value of Science (Professional Relevance) Without Paradigm With Paradigm Mature 10 Emerging Service Research and Innovation | Almaden Research Center © 2007 IBM Corporation © 2005 IBM Corporation

SSME benefits. Thread 2. Management subteam Paradigm / What is ‘Service Science’ ? *Service Science Management & Engineering (SSME) is the application of scientific, engineering, and management disciplines to Service Systems* § It is an interdisciplinary activity which unites other areas based on trans/cross-disciplinary collaboration § It It focuses on 4 fundamental areas / sets of resources A Model • • Business and Organizations ‘’ Technology ‘ People ‘ Information Technology *Service System: a dynamic value co-creation configuration of resources** § Service systems are complex systems, and they are also a type of ‘system of systems, ’ often both containing internal smaller service systems as well as being contained within a broader service. An system. Object § Service systems typically interact via value propositions, that may create stable relationships between service systems in extended value chains or networks. 11 IBM Confidential September 26 th, 2007 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: A Paradigm - A Value-Based Transactional Model of Services § The elements of a Services Environment are a configuration of – Participants who have Values – Objects which have Attributes (one of which is tangeabilty) – Connections which connect Participants & Objects § Service Transactions change the configuration of the Participants, Objects & Connections & their attributes – A key consideration in a Service Transaction is how the change of attributes is evaluated in each participants set of Values § Implications - using this model of Services a couple of more or less immediate implications follow – Models of Services – – 'Front Stage' / 'Back Stage' - the paramount significance of 'Front Stage' / 'Back Stage' is not obvious. Clearly different connections have different characteristics but essentially there is a connected NW of participants, there is no 'a priori' reason for assuming one set of connections all has one set of characteristics or that these are particularly significant or not 'Products' / 'Services' - each element of the Services Environment has a set of Attributes / Characteristics of which tangeability is only one. There is no 'a priori' reason to assume that being physical is a particularly significant attribute in the Value set of all participants. So the 'product' v 'service' debate is not obviously so significant – Novel Types of Services – It is possible to envisage types of service transactions that make no change to any physical attribute. . and in fact that is pretty well what those 'Red Letter' days are – Variability of Services – – As participants do not exist standalone and the constraints on the Values that a C(ustomer) deploys within a transaction are likely to be less constrained than those of a 'B' Customer then one would anticipate that there will be more opportunity for variability in Service Transactions that appeal to C customers than B ones. A corrollary is that as smaller B customers will have less explicit constraints in the Values they can deploy, there will be more opportunity for variability in Service Transactions that appeal to smaller B versus larger B customers Steve Street ( steve_street@uk. ibm. com ) Sep 07 12 SSME Doctoral Workshop Manchester 19 September 2008 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: A Paradigm - A Value-Based Transactional Model of Services § The elements of a Services Environment are a configuration of – Participants who have Values – Objects which have Attributes (one of which is tangeabilty) – Connections which connect Participants & Objects Now is the time to build & test the paradigm § Service Transactions change the configuration of the Participants, Objects & Connections & their attributes – A key consideration in a Service Transaction is how the change of attributes is evaluated in each participants set of Values § Implications - using this model of Services a couple of more or less immediate implications follow – Models of Services – – 'Front Stage' / 'Back Stage' - the paramount significance of 'Front Stage' / 'Back Stage' is not obvious. Clearly different connections have different characteristics but essentially there is a connected NW of participants, there is no 'a priori' reason for assuming one set of connections all has one set of characteristics or that these are particularly significant or not 'Products' / 'Services' - each element of the Services Environment has a set of Attributes / Characteristics of which tangeability is only one. There is no 'a priori' reason to assume that being physical is a particularly significant attribute in the Value set of all participants. So the 'product' v 'service' debate is not obviously so significant – Novel Types of Services – It is possible to envisage types of service transactions that make no change to any physical attribute. . and in fact that is pretty well what those 'Red Letter' days are – Variability of Services – – As participants do not exist standalone and the constraints on the Values that a C(ustomer) deploys within a transaction are likely to be less constrained than those of a 'B' Customer then one would anticipate that there will be more opportunity for variability in Service Transactions that appeal to C customers than B ones. A corrollary is that as smaller B customers will have less explicit constraints in the Values they can deploy, there will be more opportunity for variability in Service Transactions that appeal to smaller B versus larger B customers Steve Street ( steve_street@uk. ibm. com ) Sep 07 13 SSME Doctoral Workshop Manchester 19 September 2008 © 2007 IBM Corporation

Cambridge Service Science, Management, and Engineering Symposium What we need from you… Help with the questions we face as a Globally Integrated Enterprise How do we tap the Power of Globalization? How do we deliver unique value in an open, collaborative ecosystem? Leverage Global Assets Serve Distinct Global Markets Manage Value in an Ecosystem of Increasingly Specialized Entities Build a Specialized Enterprise Globally Integrated Enterprise Enable Collaboration Address Shared Risk and Control 14 How do we forge a strategy for Specialization? IBM @ the Cambridge SSME Symposium | Cambridge 14 -15 July 2007 What specific problems bother Industrialists ? © 2007 IBM Corporation

Cambridge Service Science, Management, and Engineering Symposium What we need from you… Methods that directly support our Services Business § Service Design – Methods, Models, Organisation, Paradigms § Innovation Patterns § Investment Models for Services Higher density value co-creation configurations – Service Value, Measurement & Legitimacy § Risk Assessment models that span company boundaries / ecosystems § Pricing & Contracting models for annuity based services § Services IP – Protection & Management § … Breakthrough? They will be articulated in many ways Service System (Value Creating System) 1. People (division of labor, multi-tasking) 2. Technology 3. Value Propositions Connecting Internal and External Service Systems 4. Shared Information (language, laws, measures) § A “Moore’s Law” for services? 15 IBM @ the Cambridge SSME Symposium | Cambridge 14 -15 July 2007 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: Content / Key Business Problems § Value – Understanding – Measuring – Complex Ecosystems But these are the essential focus areas § Risk – Minimising & Managing § Delivery – Optimisation 16 SSME Doctoral Workshop Manchester 19 September 2008 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: Approach / ‘The Three Dimensional Model’ Interactional Expertise Across Other Fields Management (Business) Across industries Across cultures Across functions Across disciplines = More experienced More adaptive More collaborative Social Science (People) Engineering (Technology) Tower of Babel §“Biggest problem in business is people don’t know how to talk to other people in the language they understand. ” §Charles Holliday, CEO Dupont Core Field of Study Together 17 SSME Doctoral Workshop Manchester 19 September 2008 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: A framework for Service Science Curricula 5 Element Model 1. Service Core – § ‘Key Service Concepts’ & Methods § the ‘Integrative element’ 2. Business – § Key ‘Business’ related concepts as they relate to Services 3. People – § Awareness & high understanding of key concepts the interaction of People as individuals, as members of a society 4. Technology – § Awareness & high level understanding of key concepts about how key technologies can be applied to Services 5. Fundamental Skills – § ‘other methods’ / ‘other ways of thinking’ of value when thinking about Services 18 Thought Leadership Workshop Manchester 17 -18 September 2008 Slide Layout © 2007 IBM Corporation

Establishing SSME as a new academic discipline: Approach / Trying the Three Dimensional Model IT § Multi Disciplinary § Explicit connections between subject areas etc MKT ENG § Contemporary Case Studies OM HR . . Bridging Knowledge EXPERIMENT ! What are the most effective approaches ? 'If you want a motorcycle, go to Chongqing … Although this dusty central Chinese city of drab office buildings and perpetually grey skies is better known as the gateway to the enormous Three Gorges Dam, it is also the two-wheeler capital of the world. Led by the region's pioneers, China now makes half the world's motorcycles. But more important than the numbers produced is the way these motorcycles are made—especially the way designers, suppliers and manufacturers have organised themselves into a dynamic and entrepreneurial network. Unlike state-run firms, the city's private-sector upstarts, such as Longxin and Zongshen, do not have big foreign partners like Honda or Suzuki with deep pockets and proven designs. So they came up with a different business model, one that was simpler and more flexible. Instead of dictating every detail of the parts they want from their suppliers, the motorcyclemakers specify only the important features, like size and weight, and let outside designers improvise. This so-called “localised modularisation” approach has been very successful and delivered big cost reductions and quality improvements, says John Seely Brown, an innovation expert who used to head the legendary Xerox PARC research centre. It is one example of the sort of business-model innovation which he insists is far more radical than conventional product or process innovation' 19 SSME Doctoral Workshop Manchester 19 September 2008 © 2007 IBM Corporation

Establishing SSME as a new academic discipline: Summary § Content – Content is High Value Services § Paradigms – Foundations - Paradigms / Theoretical Frameworks § Problems – Key Problems - Value & Risk § Approaches – Interdisciplinary – Partnership 20 SSME Doctoral Workshop Manchester 19 September 2008 © 2007 IBM Corporation