services science

Service Research and Innovation | Almaden Research Center © 2007 IBM Corporation1

Service Research and InnovationJuly 13th, 2007

Jim SpohrerDirector Almaden Services Research

Service Science

Management, andEngineering (SSME)

Emerging

IBM Service Research

© 2007 IBM Corporation2 Service Research and Innovation | Almaden Research Center

“Service science is just ___<name your discipline>____”

OR/IEMS

CS/AIMultiagent Systems

Economics & LawGame Theory

MIS Anthropology& Psychology

OrganizationTheory

A ServiceSystem is Complex

ServiceOperationsMarketing

ManagementQuality

Supply ChainHuman Factors

DesignInnovation

EngineeringSystems

ComputingEconomics

Science

InformationScience

(i-schools)

© 2005 IBM Corporation3 Service Research and Innovation | Almaden Research Center © 2007 IBM Corporation

Worldview: Service systems emerging, reconfiguring, interactingto (normatively) co-create value as judged by stakeholders/roleholders

Dynamic, emerging populations ofservice systems…

New types (creation)New instancesLife cycles

Reconfiguring resources and…Owned resourcesAccessed resourcesResources with rightsand/or as propertyCan be inputs (+/-IHIP) to production processes

Interacting to (normatively) co-create value

Value propositionsRelationshipsISPAR descriptive model

ISPAR model of service system interaction episodesISPAR model of service system interaction episodes

Goal Integrate: Lovelock & Gummeson, Sampson & Froehling,Vargo & Lusch, as well as Chase, Bitner, Rust, and many other pioneers, etc. (Ricardo, Pigou&Braess, Williamson)


Nation Labor%

A %

G%

S%

ServiceGrowth

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%

Ten NationsTotal 50% of World Wide Labor

A = Agriculture, G = Goods, S = Services 1980-2005PC Age

2005United States

The largest labor force migration in human history is underway, driven by global

communications, business and technology growth, urbanization and low cost labor

(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

Where science and engineering demand is growing…

International Labor Organization

US Employment History & Trends


Growing demand for new information and complex organization (business & societal) services….

Services

Material

Information& Organization

11%

9%

30%

50%

Products

-Based on Uday Karmarkar, UCLA(Apte & Karmarkar, 2006)

US Gross Domestic Product


“The IBM SSME Palisades event was the biggest and most diverse gathering ever in support of service education.” – Roland Rust

What IBM is doing…


A new breed of innovator – the service scientist

Social ScienceSchools (People)

ManagementSchools

(Business)

EngineeringSchools

(Technology)

Core Field of Study

Communication Skills Across Other Fields

Tower of Babel“Biggest problem in businessis people don’t know how to

talk to other people in thelanguage they understand.”Charles Holliday, CEO Dupont


Impact: Component Business Model

Business Services

Work Practices

Technical Architecture


Quadruple Loop Learning of Service Systems

Invest

Relationships Goals Plans Actions

Development(WorldModel Validity)

Versatility

Deeper(Ecology)

Sustainability

Differentiate(Exploration)Effectiveness

Delivery(Exploitation)

Efficiency

Outcomes(Expectation)

Evaluation

Adapting to the world of shareholders, customers, competitors, and employees.

123

4

Performance,Health & Cost

Measures

Relevance& Value

Measures

Reputation& Trust

Measures

Risk& Reward Measures

Rationality& MaturityMeasures


Impact: Business Insights Workbench

Valium (Trade Name)

Diazepam(Generic Name)

CAS # 439-14-5(Chemical ID #)Valium has > 149

“names”


Impact: Intelligent Document Gateway

Digitization

Business Logic


Impact: Call Centers

Analytics

Dashboard

Performance


Explore: Some future services

Augmented worlds &smart sensor services

Virtual worlds &practice studio

Semantic webservices

http://images.google.com/imgres?imgurl=http://www.scienzz.com/ticker/upload/meldungen3/RFID-Tag01.jpg&imgrefurl=http://www.scienzz.com/ticker/art2753.html&h=152&w=190&sz=8&tbnid=GtD2PsRbO6cJ:&tbnh=77&tbnw=97&hl=en&start=15&prev=/images%3Fq%3Dmetro%2Bgroup%2Brfid%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DG


0 25 50 100 125 150

Automobile

75Years

50

100TelephoneElectricity

Radio

Television

VCR

PC

Cellular

Inte

rnet

% A

dopt

ion

Question: What limits growth rates?

Invention

Customeradoption

Servicesystemgrowth

AccessLawsSkillsROI


Service System1. People 2. Technology3. Shared Information4. Organizations

connected by value propositionsComputational System

More transistors, more powerful More win-win interactions, more value

What would a service science breakthrough look like? How about a Moore’s Law of Service Systems? Why not?

18 Service Research and Innovation | Almaden Research Center © 2007 IBM Corporation

SSME - Service Science, Management, and EngineeringDiscipline Classification System DRAFT v 0.2

(send updates to Claudio Pinhanez, IBM Research)

A. General1. SSME Education2. Research in SSME3. SSME Policy4. History of Services5. Services Market6. Miscellaneous

B. Service Science1. Service Theory2. Economics of Services3. Mathematical Models of Services4. Services as Value Co-Creation Systems5. Services as Dynamic Systems6. Services as Multi-agent Systems 7. Services as Customer-Intensive Systems8. Service Complexity Theory 9. Service Innovation Theory10. Service Science Education

C. Service Engineering1. Service Operations 2. Service Optimization 3. Service Systems Engineering 4. Service Supply Chains5. Service Engineering Management6. Service Systems Performance 7. Service Information Systems8. Service Standards9. Assetization of Services10. Service Engineering Education

D. Service Management1. Service Marketing 2. Service Operations 3. Service Management 4. Service Innovation Management5. Service Leadership6. Service Quality7. Service Lifecycle 8. Human Resources Management 9. Customer Relationship Management 10. Service Accounting11. Service Sourcing12. Services Law13. Globalization of Services14. Service Management Education

E. Human Behavior in Service Systems1. Service Systems Evolution2. Behavioral Models of Services3. Decision Making in Services4. People in Service Systems5. Organizational Change in Services6. Measurement and Incentive in Services7. Customer Psychology

F. Service Design1. Service Design Theory 2. Service Design Methodology 3. Service Representation 4. Aesthetics of Services 5. Service Design Education

G. Service Arts 1. Service Arts Theory 2. Services-Inspired Art3. Traditional Service Arts4. Contemporary Service Arts5. History of Service Arts

H. Service Industries1. The Service Industry2. Information Services3. Business Services4. Professional Services5. Business Consulting6. Customer Relations7. Maintenance and Repair8. Public Services9. Social Services10. Health11. Hospitality12. Transportation13. Retail and Wholesale14. Financial15. Entertainment and Media16. Religious and Spiritual Services17. Other Service Industries



Getting beyond processes to interactions

Manufacturing processes– Provider-centric

Service processes– Customer-centric

Service system interactions– Provider is co-creator– Customer is co-creator– Value co-creation

centric– Sustainability & versatility

From Claudio Pinanez ([email protected]), IBM Service Research

inputs outputs

manufacturer

customer

capital labor knowledge facilities

criticalaudience

customer

outputsinputs

service provider

labor capital

knowledge facilities

material inputs critical audience

user

inpu

t int

ensi

ty



Towards a Science of Service Systems &The Service System is the Basic Abstraction of Service Science

First article introduces service systems (examining universitiesand business outsourcing examples). Second article develops the abstraction further. The worldview is populations of service systems (people, businesses, government agencies) interacting. To the mutual benefit of the interacting service systems, value propositions -- proposed, agreed, realized – co-create value. Vargo&Lusch’s Service-Dominant (S-D) Logic defines service as “the application of resources for the benefit of another entity.” In contrast, the producer-consumer roles of Goods-Dominant (G-D) Logic lead to a worldview of producers-of-value and consumers-of-value. The notion of one entity being the creator of value and the other being destroyer is inconsistent with S-D Logic; even “prosumer” is G-D Logic. Thus, another, abstraction of the entity is required - “service system.”Not all service system interactions qualify as service. Our Interact-Serve-Propose-Agree-Realize (ISPAR) model is one possible descriptive model with ten possible outcomes (R), (K), (W), (J), and (-P), (-A), (-D), (-K), (-C), (-J); normative path ISPAR:Definitions– Service science studies application of resources for mutual benefit of

systems (value co-creation via resource application).– Normative service science studies how one system can and should

apply resources for mutual benefit.– Service Science, Management, and Engineering (SSME) applies

normative service science to problems of business and society.

References: IEEEComputer Jan2007, Spohrer, Maglio, Bailey, Gruhl; HICSS 2007 submission, Vargo, Spohrer, Caswell, MaglioReferences: IEEEComputer Jan2007, Spohrer, Maglio, Bailey, Gruhl; HICSS 2007 submission, Vargo, Spohrer, Caswell, Maglio

ISPAR model of service system interaction episodesISPAR model of service system interaction episodes



Six Things to Know about Service Systems (DRAFT)1. Service system = value co-creation system, based on both tangible and intangible value– Differentiation: Economics looks primarily at the pricing system and hence value in monetary terms is the focus

2. System of systems: Type of complex adaptive social system (sociotechnical, socioeconomic)– Differentiation: Social science does not focus on value co-creation (win-win changes as judged by people)

3. Example Service Systems: Business, Hospital, Global Economy (Largest), Person (Smallest)4. Dynamics: Origins, Behavior, Learning/Evolution, Growth/Decline, Death/Extinction– Lens on key behaviors: design win-win value proposition, agree (contract), realize value, resolve disputes (learn)

5. Integrates Key Components: People, Organizations, Shared Information, Technology– People: How many people? What do they think about, talk about, do?

• Division of labor, multitasking, adaptation; hazards from bounded rationality, opportunism and human condition (health, death, emotions)• People possess mental models of the world and capabilities& needs of other service systems; Judgments of tangible and intangible value• People are physical entities with legal rights & responsibilities

– Organizations: What is being valued? What division of labor, risk, safeguarding, etc.?• In general, other service systems (organizations and economic institutions with win-win value co-creation as their purpose)• System of systems connected by value propositions, associated coordination and governance mechanisms to deal with risks & hazards• Organizations are mental/social-constructed (not physical) entities with legal rights & responsibilities (virtual person)

– Shared Information: What is everyone expected to know? Have access to?• Language, Laws, and Measures• Promises (informal) and Contracts (formal); Incomplete contracting in its entirety• Shared information is mental/social-constructed (not physical) entity that can be property (owned by a person or organization)

– Technology: What types of technology? What processes supported?• Augmentation (capability expansion) & automation (labor substitution); Application of new knowledge to create new capabilities• Engineered systems (control built environment and network infrastructures) and Managed systems (incentive alignment & hazards)• Technologies are physical entities that can be property (owned by a person or organization)

6. Research & Practice Goals: Understand, Design, Continuous Improvement, Scaling Up & Down



Quadruple Loop Learning of Service Systems

Invest

Relationships Goals Plans Actions

Development(WorldModel Validity)

Versatility

Deeper(Ecology)

Sustainability

Differentiate(Exploration)Effectiveness

Delivery(Exploitation)

Efficiency

Outcomes(Expectation)

Evaluation

Adapting to the world of populations of interacting service systems.(1. employees, 2. competitors, 3. customers, 4. shareholders & self)

123

4

Performance,Health & Cost

Measures

Relevance& Value

Measures

Reputation& Trust

Measures

Risk& Reward Measures

Rationality& MaturityMeasures

Invest to maintain, operate, and changeInvest to maintain, operate, and change

http://www.financialdashboard.comhttp://www.financialdashboard.com



A Moore’s Law for Service Systems? Why not?

Service System1. People 2. Technology3. Shared Information4. Organizations

connected by value propositionsComputational System

More transistors, more power More win-win interactions, more value



A brief history of engineering – what comes next?Antiquity

– Military Engineering

1852 ASCE – Civil Engineering

1880 ASME– Mechanical Engineering

1884 AIEE (later IEEE) – Electrical Engineering

1907 ASAE (later ASABE) – Agriculture & Biological Engineering

1908 AICE – Chemical Engineering

1948 ASIE (later IIE) – Industrial Engineering

1948 ACM– Computing Machinery

1954 ANS – Nuclear Engineering

1955 AAEE – Environmental Engineering

1963 AIAA– Aerospace Engineering

1968 BMES– Biomedical Engineering

1985 AGT – Genetic Technologists

1992 IAFE – Financial Engineering

1993 JCESEP – Software Engineering

2007 SR&II – Service Science, Management, and

Engineering (SSME)– Service Enterprise Engineering (SEE)– Service Systems Engineering (SSE)


SSME: Service Science, Management & Engineering

Operations Research and Industrial EngineeringMore realistic models of people

Computer Science and Electrical Engineering, Information Systems

Software and systems that adaptively change with business strategy

Economics and Business Strategy, Service Management and Operations

Better models of scaling and innovation

Law and Political EconomyBetter models of social innovation – in what way is passing a law innovation

Complex Systems and Systems EngineeringBetter model of robustness and fragility of service systems (sustainability)

Service systems are value co-creation configurations of people, technology, internal and external service systems connected by value propositions, and shared information (such as language, laws, measures, models, etc.).

Still feels like a foreign language to you?

This is a multidisciplinary approach in understanding, defining, creating and delivering service systems


Another perspective of service… systems of relationships

Service providers and clients co-produce value in and through their interactions with one another

Many services require the participation of the receiver of the service

hair stylist – clientdoctor – patientteacher – studentIT service provider – business client

Relationships matter!“… the important distinction is that the relationship has become a resource in itself… thus the returns have now more to do with extending the scope, content and process of the relationship.”

Bryson, Daniels and Warf – from Service Worlds

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)

- Based on Gadrey (2002)


What makes SSME hard is that it is multidisciplinary…

Services depend critically on people, technology, and co-creation of valuePeople work together and with technology to provide value for clientsSo a service system is a complex socio-technical system Growth requires innovation that combines people, technology, value, clients

Science & Engineering

Business &Management

Social & CognitiveSciences

Economics & Markets

BusinessInnovation

TechnologyInnovation

SocialInnovation

DemandInnovation


Food for thought: Impact that matters

Business ImpactTechnical innovation & inventionInternal relationshipsRevenue/Profit

Personal DevelopmentContinued educationRelationship buildingCommunity involvement

Scientific AchievementPublishingScientific or technical innovationExternal relationships

Team AchievementCommunicationCo-productionInnovationCommunity

Individual AchievementTechnical knowledgeExperiential knowledgeRelationship building


Projected US service employment growth, 2004 - 2014

US Bureau of Labor Statistics. http://www.bls.gov/opub/ooq/2005/winter/art03.pdf


Why understanding service innovation matters to IBM

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)?

services science

Documents