ponencia jorge sanz en iii foro ssme ( services science management engineering) en la uimp 2008

© 2005 IBM Corporation1 © 2008 IBM Corporation

Algunas Experiencias y Observaciones

Jorge Sanz Almaden Service Research

Servicios, Ingenieria

y Globalizacion


37%

23%

40%

SERVICES

SYSTEMSAND FINANCING

SOFTWARE0

20

40

60

80

100

1982 1988 1994 1998 2004 2006 2007

Year

Rev

enu

e ($

B) Services

Software

Systems

Financing

IBM’s business

2007 Pretax Income Mix Revenue Growth by Segment


Service sector employment

In 2006 the service sector’s share of global employment overtook agriculture for the first time, increasing from 39.5% to 40%. Agriculture decreased from 39.7% to 38.7%. The industry sector accounted for 21.3% of total employment.

- International Labour Organization

http://www.ilo.org/public/english/region/asro/bangkok/public/releases/yr2007/pr07_02sa.htm


Jobs and tasks are changing

-10

-5

0

5

10

15

1969 1974 1979 1984 1989 1994 1999

Levy, F, & Murnane, R. J. (2004). The New Division of Labor:How Computers Are Creating the Next Job Market. Princeton University Press.

Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT)

Expert Thinking

Complex Communication

Routine Manual

Non-routine Manual

Routine Cognitive


Service Education, Research, and Innovation

Services account for more than 80 percent of the U.S. gross domestic product, employ a large and growing share of the science and engineering workforce, and are the primary users of information technology. … [The] academic research enterprise has not focused on or been organized to meet the needs of service businesses. Major challenges to services industries that could be taken up by universities include: (1) the adaptation and application of systems and industrial engineering concepts, methodologies, and quality-control processes to service functions and businesses; (2) the integration of technological research and social science, management, and policy research; and the (3) the education and training of engineering and science graduates prepared to deal with management, policy, and social issues.”

National Academy of Engineering (2003). "The Impact of Academic Research on Industrial Performance"

“Our economy is increasingly dependent on services, yet our innovation processes remain oriented to products.”

Stefan Thomke from Harvard Business Review, April 2003

“Services dominate economic activity in developed economies, and yet understanding of innovation in this sector remains very limited…… At this early stage, academic research about innovation in services is not well defined.”

Henry Chesbrough from Financial Times, October 2004

“Services is an understudied field” Matthew Realff, Director, NSF SSE Program

from NY Times article April 18, 2006Academia Dissects the Service Sector, but Is It a Science? - Steve Lohr


Services are different, because they integrate…Many say that “service is just ___<see list of disciplines below>____”Most like general systems theory (abstract) and systems engineering (applied)

A ServiceSystem is Complex

Ope

rations Research

…Industrial E

ngineering

Sys

tems

En

gin

eering

Org

anization T

heoryE

conomics &

Law

Multi-agent

Syste

ms

Informa

tion

Managem

ent

Gam

e T

heory

Managem

ent S

cienceM

ngmnt of In

fo Sys

(MIS

)G

eneral S

ystems

Th

eory

Anthro

pologyC

S/A

rtificial IntelligencesInform

atio

n S

cienceS

ocial Scien

ce/ Poli-

Sci

Cognitive

Science/P

sychM

arketingO

perations M

ngmnt

…

Most disciplines specialize…Service science integrates

Service system entities are dynamic configurations of resources…people, technology, organizations, shared information (e.g., language, laws, measures, models, processes, policies, relationships, rights, etc.)connected to other service system entities by value propositions for the purpose of value-cocreation relationships, with governance mechanisms for dispute resolution.

Que

uing T

heory


What should a service (engineer) know?

I. Theoretical & Practical Foundations1. Concepts & Questions2. Tools & Methods

II. Disciplines & Expert Thinking3. History & Evolution: Economics & Law4. Customer: Marketing & Quality Measure5. Provider: Operations & Productivity Measure6. Authority: Governance & Compliance Measure7. Competitor: Design & Sustainable Innovation Measure8. Privileged Access: Anthropology & People Resources9. Owned Outright: Engineering & Technology Resources10. Shared Access: Computing & Information Resources11. Leased/Contract: Sourcing & Organization Resources12. Future & Investment: Management & Strategy

III. Professions & Complex Communication13. Mindset & Entrepreneurship14. Science & LeadershipFor a service science outline and 200+ annotated references, refer to:http://www.cob.sjsu.edu/ssme/refmenu.asp

T-shaped professionals are inhigh demand because theyhave both depth and breadth

They combine expert thinking(depth in one or more areas)and complex communications(breadth across many areas)

complex communication

expert thinking


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 -

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

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

Call to Create National Service Innovation Roadmaps (SIR) Reports


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

Service involves at least two entities, one applying competence and another integrating the applied competences with other resources and determining benefit (value co-creation).

We call these 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.


On Value in Service Systems…

Value depends on the capabilities a system has to survive and accomplish other goals 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

Experience and knowledge, and the experience and knowledge of others, provide hints as to what is reasonable to exchange for some new capability. But measuring exchange value this way – through human judgment and operationalized in the market – is not necessary for one system to provide value to another.

All ways that systems work together to improve or enhance one another’s capabilities can be seen as being value creating. Some organisms may have symbiotic relationships with others, completely dependent on one another for food, each dependent on capabilities the other provides. Neither may measure or judge explicitly what is exchanged, but each provides service for, and creates value with, the other nonetheless.

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.


Interactions are key

Johnson, B., Manyika, J., & Yee, L. (2005). The next revolution in interactions. McKinsey Quarterly, 4, 20-33.

As more 21st century companies come to specialize in core activities and outsource the rest, they have greater need for workers who can interact with other companies, their customers, and their suppliers.

The traditional organization, where a few top managers coordinate the pyramid below them, is being upended.

Raising the productivity of employees whose jobs can’t be automated is the next great performance challenge – and the stakes are high.

Companies that get that right will build complex talent-based competitive advantages that competitors won’t be able to duplicate easily – if at all.


Processes vs. Work practices

ENGAGE /DEAL

TRANSFORM & TRANSITION

DELIVER & OPERATE

MANAGE

PRE-SALESCONCEPT

Service Cycle

1 2 3 4 5 6

8

9

Client

7


Work is investigative, collaborative, iterative, parallel, creative

Client Team

ClientOut-Sourcing

Consultant

CSE Lead TSM2nd CSE

2nd TSM

DEM

PM

TSA Team

C&NHR

DPEPE

Pricer

Support

Proposal

RFP

Ambiguities /Conflicts

Clarification

Update

Client C&N, Lead TSM, DPE

Assumptions

Input

Discover

CollaborativeReview

Submit

Update

RFPThe Client

ClientOut-Sourcing

Consultant


Opportunity for improvement

Existing state Tools used for creating, tracking and

managing outsourcing deals are incompatible, slow and awkward

Critical business data is not collected, shared, standardized, or analyzed to provide business intelligence

Systemic approach to rethink and transform the business with improvements to Win more good deals: ensure that

proposals are deliverable and profitable

Reduce cost of engagement: work efficiency and effectiveness

Value proposition of systemic approach Improve win rate and reduce engagement

cost

Improve customer satisfaction

Improve solution design quality

Organizational Design

Work Practices

Technical Architecture

Transformation for integration, optimization, and sustainability


“Succeeding through Service Innovation”

Service Science is emerging as a distinct field. Its vision is to discover the underlying logic of complex service systems and to establish a common language and shared frameworks for service innovation. To this end, an interdisciplinary approach should be adopted for research and education on service systems.

http://www.ifm.eng.cam.ac.uk/ssme/

For education: Enable graduates from various disciplines to become T-shaped professionals or adaptive innovators; promote SSME education programmes and qualifications; develop a modular template-based SSME curriculum in higher education and extend to other levels of education; explore new teaching methods for SSME education.

For research: Develop an interdisciplinary and intercultural approach to service research; build bridges between disciplines through grand research challenges; establish service system and value proposition as foundational concepts; work with practitioners to create data sets to understand the nature and behaviour of service systems create modelling and simulation tools for service systems.

For business: Establish employment policies and career paths for T-shaped professionals; review existing approaches to service innovation and provide grand challenges for service systems research; provide funding for service systems research; develop appropriate organisational arrangements to enhance industry-academic collaboration; work with stakeholders to include sustainability measures.

For government: Promote service innovation and provide funding for SSME education and research; demonstrate the value of Service Science to government agencies; develop relevant measurements and reliable data on knowledge- intensive service activities; make public service systems more comprehensive and citizen-responsive; encourage public hearings, workshops and briefings with other stakeholders to develop service innovation roadmaps.

Interlude 1


Service Science, SSME – What are we talking about?

Service Science, Management, and Engineering (SSME) is a term introduced by IBM to describe Service Science, an interdisciplinary approach to the study, design, and implementation of services systems – complex systems in which specific arrangements of people and technologies take actions that provide value for others. More precisely, SSME has been defined as the application of science, management, and engineering disciplines to tasks that one organization beneficially performs for and with another.


Service Science is about building common language

Definitions of 'service science' can be misleading. An analogy can be made with Computer Science. The success of CS is not in the definition of a basic science (as in physics or chemistry for example) but more in its ability to bring together diverse disciplines, such as mathematics, electronics and psychology to solve problems that require they all be there and talk a language that demonstrates common purpose.

Service Science may be the same thing - just bigger - as an interdisciplinary umbrella that enables economists, social scientists, mathematicians, computer scientists and legislators (to name a small subset of the necessary disciplines) to cooperate in order to achieve a larger goal - analysis, construction, management and evolution of the most complex systems we have ever attempted to construct.

© 2008 IBM Corporation19

IBM Almaden Research Center

Successful enterprises focus on selected areas of specialization

Enterprise Optimized

Process Optimized

Business Unit

Optimized

External Specialization

Internally Integrated Strategically Partnered Industry Networked

Inte

rnal

Sp

ecia

lizat

ion

Process Centers

Silo 1

Silo 2

Silo 3

Acc

ou

nta

bil

ity

Lev

el

Business Competency

Direct

Control

Execute

Business Components

Silo 1

ExternalPartner

ExternalPartner

Silo 2

Silo 3

Silo 1

Silo 2

Silo 3

Silo 1

Silo 2

Silo 3

Acc

ou

nta

bili

ty L

evel

Business Competency

Direct

Control

Execute

Business Components

“Specialized Enterprise”



A Business Component Map is a one-page, simplified view of an enterprise or industry

Control

Execute

Direct Strategic Planning

Analytics Recreational Facilities Oversight

Engineering Reporting

Performance Monitoring

Contracts

Regulatory Reporting

Disaster Management

Public Safety Reporting

Property & Land

Management

Housing Adminis-

tration

Sports Facilities &

Events

Prevention & Awareness

Emergency Response

Service Delivery

Legal

HRDocument Management

Libraries

Heritage Preservation

Development Control

City Planning Public SafetyTransportation

& Infrastructure

Recreation Services

Public Works Services

Municipal Management

Services

Preparedness Planning

Admin Planning

Infrastructure Strategy

Event Planning

Services Strategy

Program Management

Columns are Business Competencies, defined as large business areas with characteristic skills and capabilities, for example, product development or supply chain.

An Accountability Level characterizes the scope and intent of activity and decision-making. The three levels used in CBM are Directing, Controlling and Executing.

Directing is about strategy, overall direction and policy.

Controlling is about monitoring, managing exceptions and tactical decision making

Executing is about doing operational work

Business Components are the essential and unique/non-overlapping building blocks that make up the business/mission of an enterprise. They have the potential to operate independently, in the extreme as a separate unit, shared service, contractor managed or outsourced component. They contain Activities, Resources, Processes, Business Services, Key Performance Indicators

IT


IBM Confidential

Business Service Function

Business Service Function Operation Model Interaction Model

Application 1

CBM also models dependencies among components, thus forming an extended value-proposition ecosystem



A business process can be represented by reusing business services provided by business components

Component NameMarket Segment

Planning

DescriptionTo analyze segments

and derive targets

Component NameMarket Segment

Planning

DescriptionTo analyze segments

and derive targets

Component NameBusiness Strategy

DescriptionDefine business strategy

Component NameBusiness Strategy

DescriptionDefine business strategy

Component NameSegment Tracking

DescriptionTrack target segments

Component NameSegment Tracking

DescriptionTrack target segments

Business Plans

Tracking Models & Targets

Market Events

To “Product Management”

business component

Product Portfolio Updates

Product Portfolio Updates

23

Component Business Model to Help Decompose Your Business Experience and Know-how from Thousands of Client Engagements

70+ maps supporting 17 industries 23 enhanced with key performance

indicators (KPI) Over 2,000 trained CBM specialists

armed with the CBM tool 30 CBM patents filed CBM tool license available to clients

Component Business Modeling tool 2.0

Integrates with WebSphere Business Modeler

24

Integrating Component Business Models with Industry Process Models

+ =

IBM is bringing together its Business Process Management Center of Excellence (BPM CoE), IBM Research, and the Global Business Solution Center (GBSC) to map

Component Business Models (CBM) to Industry Process Models

Component Business Models (CBM) and Tool

Industry Process Models in WBM, built by BPM CoE,

leveraging APQC’s Process Classification Framework

Result: business transformation engagements delivered more quickly,

through more industry-specific insights and more powerful CBM Tool


Understanding service systems

Service Science Service science is the systematic

study of service and service systems

SSME SSME is a discipline that brings

together scientific understanding, engineering principles, and management practices to design, create, and deliver service systems

Service Service is the application of

competences for the benefit of another entity

Service System Value co-creation configurations of

integrated resources: people, organizations, shared information and technology

Interlude 2


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)

operant operand

Physical

Not-Physical

Rights No-Rights

2. Technology

4.. SharedInformation

1. People

3. Organizations


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


Special Issue on SSME

Toward a conceptual foundation for service science: Contributions from service-dominant logic R. F. Lusch, S. L. Vargo, and G. WesselsDesigning a discipline in service science R. J. GlushkoService science: Catalyst for change in business school curricula M. M. Davis and I. BerdrowService science: At the intersection of management, social, and engineering sciences R. C. LarsonComplexity of service value networks: Conceptualization and empirical investigation R. C. Basole and W. B. RouseService system fundamentals: Work system, value chain, and life cycle S. AlterEstimating value in service systems: A case study of a repair service system N. Caswell et al.BEAM: A framework for business ecosystem analysis and modeling C. H. Tian, B. K. Ray, J. Lee, R. Cao, and W. DingPatterns of innovation in service industries I. MilesBusiness services as communication patterns: A work practice approach for analyzing service encounters R. J. Clarke and A. G. NilssonLegal research topics in user-centric services O. Pitkänen et al.Managed service paradox N. Leon and A. C. DaviesImproving service delivery through integrated quality initiatives: A case study J. Hickey and J. SiegelPredicting customer choice in services using discrete choice analysis R. Verma et al.


Progress Toward Service Science…

Education 198 courses, programs, or degrees

established in 42 countries 12 centers, seminars, or groups

established

Government 11+ programs for service research

and education in 11 countries $1B+ committed worldwide

Industry SRII established to promote service

research and innovation agenda, with $1M in funding from IBM, Oracle, Xerox, Microsoft and others

Associations AIS – Service Science SIG INFORMS – Service Science Section


Access rights are the building blocks of service system ecology

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.)

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:

The access rights associated with customer and provider resources

are reconfigured by mutually agreed to value propositions

relationships


http://www.ibm.com/university/ssme

ponencia jorge sanz en iii foro ssme ( services science management engineering) en la uimp 2008

Technology

service education

service science outline

service functions

service sectors

service engineer

services systems

service sector employment

service system iscomplex