Transcript Opportunities for Education and Business

The Challenge of Services in the 21st Century:
Opportunities for Education and Business
The Challenge of Services in the
21st Century
- Opportunities for Education and Business
Kevin Bishop,
Vice President, Marketing, IBM NE Europe
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Outline
 Why Focus on Service?
 Business challenges in service
 Service Science whitepaper
2
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Why focus on service?
 Major proportion of GDP and employment in western world
– Service sector accounts for over 70% of EU’s economic activity
– Nearly 70% of EU’s workforce are employed in service sectors
 China and India are also assessing their role in the service economy
Source: OECD
3
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Why focus on service?
4
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Why Services Science?
Services dominate Developed economies globally, but lag in R&D, training and professionalisation.
Their importance as a motor for growth and competitive advantage drives the need to close these gaps.
Manufacturing
Services
70
70
60
Innovation density, 1998-2000
as a % total firms (Eurostat CIS3 survey)
Innovation density, 1998-2000
as a % total firms (Eurostat CIS3 survey)
Germany
Belgium
Iceland Netherlands
Austria
Denmark
50
Finland
France
Portugal
40
Sweden
Italy
Norway
Spain
30
60
Germany
Iceland
50
Portugal
Sweden
Austria
Belgium
40
Finland
Netherlands
Denmark
France
Greece
Norway
30
Greece
Italy
Spain
20
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Average BERD intensity, 1995-2000
as a % of GDP (OECD data)
4.5
20
0.0
0.2
0.4
0.6
0.8
Average BERD intensity, 1995-2000
as a % of GDP (OECD data)
Source: OECD Science, Technology and Industry Outlook 2004 - Jerry Sheehan
5
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
© 2008, IBM
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Outline
 Why Focus on Service?
 Business challenges in service
 Service Science whitepaper
6
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Business Challenges in Service
 Understanding the nature of service systems
 Developing new and better services and speeding up
new service introduction process
 Managing the transition to a service culture
 Getting/keeping people with service mindset and skills
7
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Systems: a type of complex system
Unravelling and understanding complex systems is a foundation stone for SSME, from which
better services concepts, implementation and management models and tools can be developed.
“People-Oriented, Services-Intensive, Market-Facing Complex Systems –
complex systems and services – are very similar areas
around which we are framing the very complicated problems of
business and societal systems that we are trying to understand.”
– Irving Wladawsky-Berger, IBM VP Innovation (Oct. 9, 2006)
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Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
© 2008, IBM
The Challenge of Services in the 21st Century: Opportunities for Education & Business
What Problem Are We Trying To Solve?

Corporations, academia and government are now acknowledging the need to invest in
service innovation in order to support the evolving globally distributed service-dominated
economies.

Customer satisfaction with services is low and in many cases declining, industry
dependency on service revenue is increasing and the economics for effective delivery
are poor – especially in professional services.

The gap between customer demands and fulfilled expectations is growing due
increased complexity. This leaves corporations, governments and national economies
exposed to the potential of competitive and economic threats.

As technology becomes more complex, B2B and B2C companies must assume prime
responsibility for customer consumption and retention.
What is required?
What are the Goals?
value and higher satisfaction levels for customers
Fundamental andMore
actionable
changes in our approach to service
Dramatically improved margins for industry
delivery through research
innovation
Industry and
relevant
projects for Academia
9
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Developing people with the service mindset and skills
The skills needed for services innovation are in short supply; science and engineering tertiary
education does not seek to develop skills required for innovation and entrepreneurship.
Service Scientists: Adaptive Innovators
What industry wants from professional researchers
Science and Engineering
Industrial and Systems Engineering
Computer Science & Info. Systems
Math and Operations Research
Economics and Social Sciences
Business Anthropology
Organizational Change & Learning
Business and Management
“Need l-shaped, T-Shaped people …” Stuart Feldman (Oct 6, 2006)
10
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
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






Depth
Breadth
Practical Experience
Communications
Teaming
Management
People Management
Strategic Planning
Problem solving via informatics
Problem solving via social
networks
Flexible, adaptive and
entrepreneurial
Produced on demand
Source: IBM Research survey March 2007
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
© 2008, IBM
The Challenge of Services in the 21st Century: Opportunities for Education & Business
SSME: what is it?
SSME is a call to action to improve service innovation, an emerging academic
discipline and a new, integrative area of research.

SSME is an urgent call to action to get more systematic about service
innovation

SSME is also a proposed academic discipline and the basis for a
proposed new profession – the service scientist

SSME is also a proposed research area, the study of service systems

SSME is highly multidisciplinary and spans areas of science,
engineering, and management

To oversimplify:
– Science is a way to transform data about service systems into
knowledge
– Engineering transforms the knowledge into new value
– Management continuously improves the end-to-end value creation
process and directs investment
11
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
© 2008, IBM
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Services Science: what’s in the box?
SSME - Service Science, Management, and Engineering Discipline Classification System v 0.2 May 2007
https://w3.webahead.ibm.com/w3ki/display/SSME/SSME+Disciplines
A. General
D. Service Management
1. SSME Education
1. Service Marketing
2. Research in SSME
2. Service Operations
3. SSME Policy
3. Service Management
4. History of Services
4. Service Innovation Management
5. Services Market
5. Service Leadership
6. Miscellaneous
6. Service Quality
B. Service Science
7. Service Lifecycle
1. Service Theory
8. Human Resources Management
2. Economics of Services
9. Customer Relationship Management
3. Mathematical Models of Services
10. Service Accounting
4. Services as Value Co-Creation Systems
11. Service Sourcing
5. Services as Dynamic Systems
12. Services Law
6. Services as Multi-agent Systems
13. Globalization of Services
7. Services as Customer-Intensive Systems
14. Service Management Education
8. Service Complexity Theory
D. Human Behavior in Service Systems
9. Service Innovation Theory
1. Service Systems Evolution
10. Service Science Education
2. Behavioral Models of Services
C. Service Engineering
3. Decision Making in Services
1. Service Operations
4. People in Service Systems
2. Service Optimization
5. Organizational Change in Services
3. Service Systems Engineering
6. Measurement and Incentive in Services
4. Service Supply Chains
7. Customer Psychology
5. Service Engineering Management
E. Service Design
6. Service Systems Performance
1. Service Design Theory
7. Service Information Systems
2. Service Design Methodology
8. Service Standards
3. Service Representation
9. Assetization of Services
4. Aesthetics of Services
10. Service Engineering Education
5. Service Design Education
12
G. Service Arts
1. Service Arts Theory
2. Services-Inspired Art
3. Traditional Service Arts
4. Contemporary Service Arts
5. History of Service Arts
H. Service Industries
1. The Service Industry
2. Information Services
3. Business Services
4. Professional Services
5. Business Consulting
6. Customer Relations
7. Maintenance and Repair
8. Public Services
9. Social Services
10. Health
11. Hospitality
12. Transportation
13. Retail and Wholesale
14. Financial
15. Entertainment and Media
16. Religious and Spiritual Services
17. Other Service Industries
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
© 2008, IBM
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Services Science: the roadmap for skills
Results
Key Activities/Metrics
SSME
Launched
2004
Establish
Awareness
2004-2006
§ White papers
§ Workshops
§ Initial
discussions
with university
partners
§ Press hits on
SSME/S421C
§ Web hits
§ Awareness in
academia,
industry,gov’t
§ Early adopters
§ SSME Summit
Adoption 2007 -2009
Embed 2008 -2010
Business Value
2009 and Beyond
§ Broadened
awareness
§ SSME tools and
programs growing
§ SSME curriculum
development
§ S421C defined
§ Cross IBM SSME
focus and buy in
§ Joint research
projects/awards
§ Case studies
developed
§ Service systems as
complex systems
§ Government and
foundation funding
§ SSME graduates
§ Internal training
§ Better trained workforce
§ +Service innovation
§ +Sales impact
§ +Client satisfaction
§ +Productivity
§ +Efficiency
§ +Learning speed on
engagements
§ Internal hiring plans
Increase Focus and Impact for SSME/S421C
Plan
13
Mobilize
Execute
Service Science Management & Engineering - London 1st July 2008
Reinforce
© 2008 IBM Corporation
© 2008, IBM
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Outline
 Why Focus on Service?
 Business challenges in service
 Service Science whitepaper
14
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Key Objectives
 To build consensus on the need for
service innovation
 To identify knowledge and skills
required for service innovation
 To offer recommendations for
business, government and
academia
15
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Paper Development Process
Mar 07
Launch
Process /
Form
Industrial
& Academic
Committee
16
July 07
Industry /
Academic
Symposium
In
Cambridge
July - Sept 07
Oct - Dec 07
Feb - Mar 08
Green
Paper
Development
Broad
Industrial,
Government
& Academic
Consultation
Process
Paper
Revision
and
Whitepaper
Release
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Rationale and logic flow
Overall
Objectives
Increasing
Value from
Service
Innovation
Sustainable
innovation with
reduced
environmental
hazards & risks
Improvements
in employment
17
Enabling
Solution
Service
Science
Improve service
quality,
productivity &
compliance
Economic
growth &
prosperity
Key
Challenges
Improve
understanding
& create
needed
dialogue
“Succeeding
through Service
Innovation”
White Paper
Align
stakeholder
commitments
& actions
Systematic
approach to
service
innovation
Shared
language and
frameworks
Deep customerprovider
knowledge and
modelling
Broad inclusive
interdisciplinary
& cultural
approach
Awareness and
prioritisation
Stakeholder
Priorities
Education:
People &
Expertise
Strategies to
guide ongoing change
Concepts &
Deliverables
Education:
Adaptive
innovators
(“service mindset”)
& SSME certificates
(“T-shaped”)
Research:
Research:
Bridging &
Integrating
Transforming
performance
measurement
Practitioners &
Policy Makers:
Data &
Investment
Service systems &
Value propositions
as foundational and
integrative
concepts
Business &
Government:
Service innovation
roadmaps &
Raised awareness
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Recommendations for business
18
1.
Review existing approaches to building repeatable service
systems and expand project-based collaboration with
multidisciplinary teams from academia;
2.
Build large and inclusive interdisciplinary service science
communities involving graduates with SSME qualifications;
3.
Provide specific challenges and funding for service system
research;
4.
Develop appropriate organisational arrangements and
practices in the area of business partnerships to enhance
industry-academic collaboration;
5.
Work with stakeholders to include sustainability measures
and create actionable service innovation roadmaps.
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Recommendations for policy
19
1.
Promote the importance of service systems and fund the
development of an integrated theory of service systems;
2.
Require leading-edge practices in government agencies to
develop infrastructures, methods and data sets for service
innovation;
3.
Develop reliable economic data on knowledge-intensive
service activities across sectors to underpin leading
practice for service innovation;
4.
Make public service systems more comprehensive and
citizen-responsive;
5.
Encourage the development of service innovation roadmaps
through industry-academia-government collaboration.
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Recommendations for research
20
1.
Develop an interdisciplinary approach to service research;
2.
Foster disciplinary bridging and integration efforts with
grand research challenges;
3.
Establish service system and value proposition as
foundational concepts;
4.
Work with practitioners to create data sets to better
understand the design and evolution of service systems;
5.
Create modelling and simulation tools for service systems.
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Recommendations for education
21
1.
Enable graduates from various disciplines to become “Tshaped professionals”, adaptive innovators with a “service
mindset”;
2.
Promote SSME programmes and qualifications;
3.
Develop a modular template-based SSME curriculum;
4.
Explore alternative and innovative provisioning routes for
SSME related education.
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
How will the education system meet the growing
demand for T-shaped people across both global
and local service enterprises?
Interactional Expertise Across Other Fields
Management
(Business)
Social Science
(People)
Engineering
(Technology)
Designed together
22
Tower of Babel
“Biggest problem in business
is people don’t know how to
talk to other people in the
Core
language they understand.” Field of
Charles Holliday, CEO Dupont Study
Across industries
Across cultures
Across functions
Across disciplines
=
More experienced
More adaptive
More collaborative
Based on slides by Jean Paul Jacob, IBM
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Summary
23

The changing business landscape makes service innovation an
imperative.

Service innovation requires a better understanding of service systems,
but the knowledge and skills required are not readily available.

Business, government and academia need to work together towards an
interdisciplinary approach to research and education.

The whitepaper, in conjunction with initiatives like SSMENetUK, serves
as a basis for formulating action plans.
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
The need, the response & the part you can play..
10.00 am
Welcome and Introduction
10.15 am
Keynote: Growth in the Services Economy:
The need for new knowledge and skills
11.00 am
Panel: Services, business & needs for a skilled workforce
12.15 pm
Lunch
1.00 pm
Panel: Responding to the need for transformation in Higher Education
2.15 pm
Breakout: Your Response
3:30 pm
Next: The September workshop and follow-up
24
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Thank you
Traditional Chinese
Hindi
Russian
Gracias
Thank You
English
Diolc
h
Grazie
Spanish
Obrigado
Brazilian Portuguese
Arabic
Danke
Welsh
Italian
Thai
German
Simplified Chinese
Merci
French
Japanese
Tamil
25
Korean
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
The Challenge of Services in the 21st Century:
Opportunities for Education and Business
IBM Appendix:
Services Science progress
Service Science Management & Engineering - London 1st July 2008
© 2008 IBM Corporation
© 2008, IBM
Executive summary
•
•
•
•
•
•
Services innovation is the 21st century differentiator in the globalised
economy
IBM is a global leader in stimulating the development of a ‘science of
services’
Services Science is the study and application of Scientific, Management,
and Engineering disciplines to Services (‘SSME’)
Hence services research, drawing on a wide range of disciplines, is a
central motor for SSME
Embracing and leading in SSME will be essential to grow and differentiate
IBM services businesses; many potential business benefits have been
advanced which need to be tested
This will require collaboration spanning IBM Research and all marketfacing business units, working with clients and academia in a
collaborative framework on a local and WW basis
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
The SRII - Who’s Involved
April 2-4, 2008 – Paris, France
© 2008, AFSMI, SSPA, TPSA
What’s been achieved so far:
U.S. perspective
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
•
Global Community driven out of Almaden
– Monthly SSME Forum Calls
• Internal awareness and connection-building
– Monthly SSME Global Leadership Calls
• Lab focal point for internal and external SSME activities
•
Thought Leadership and Press
–
Over 100 US press articles (e.g., NY Times, Wall Street Journal)
–
Over 12,000 web hits and growing by over 500 a month
–
SRI announcement – Service Research and Innovation Initiative – includes other
industry players, such as Oracle, Accenture, Cisco
•
Science and Publications
–
15 academic articles (e.g., CACM special issue, POMS, IEEE Computer);
–
IBM Systems Journal in progress
–
16 conferences, workshops, panels (e.g., INFORMS, Frontiers)
–
Special Interest Groups formed in INFORMS, AIS, HFES; IEEE and ACM
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
What’s been achieved so far:
U.S. perspective
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
•
Workshops and Funding
– SSME summit at Palisades with more than 250 participants from 22 countries
– 10+ National Workshops (China, Japan, India, Norway, Germany, Israel, Ireland,
Nordic, Portugal)
– Germany – $87M Innovation with Service
– Japan – $30M Service Productivity
– China – Five Year Plan in Modern Services
– Pending – EU NESSI; US legislation; NSF Complex Systems
– NESSI Service Engineering, Service Science working groups
– Taiwan, Korea, Portugal, India – includes government sponsorship (MOU’s)
– WIRED – Maine, New Hampshire, Vermonet SSME Curriculum development (US Dept
of Labor)
– 9 recent SUR’s: NYU, Friedrich Schiller University, Wageningen University, University
of Stuttgart, University of Karlsruhe, University of Lecce, Universidad Carlos III de
Madrid, Universität Frankfurt Main, University of Hawaii Maui Community College
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
What’s been achieved so far:
U.S. perspective
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
•
Skill Needs and Course Development
– 2006 – 38 courses, programs, degrees in 11 countries (e.g., Berkeley, NCSU)
– 2007 – new schools are planning or implementing courses – now in 28 countries
• University of Sydney – using ASR course modules
• Berkeley Masters Program in Information and Service Design (ischool)
• University of Washington, Systems Engineering certificate
• University of Buffalo proposing a plan for new courses
• Catholic University Argentina also working with ASR
• “Considerations for the use of Methods” course module added to ASR materials
– Representation for internal call to action at the TLE in Anaheim
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
What’s been achieved so far:
in Europe
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
9 January 2008.
The following note is being sent on behalf of Kevin Faughnan, Director, IBM Academic Initiative:
Dear University Ambassadors
We continue to expand the global footprint of our Service Science Management and Engineering
(SSME) initiative.
Yesterday, one of the premier technical universities in Germany, the University of Karlsruhe,
signed an agreement to establish Europe's first joint institute for service research. The new
"Karlsruhe Service Research Institute" will advance research and discovery in the service
sector, as well prepare university graduates for the growing number of multi-disciplinary jobs
in the new economy.
The Institute will open its doors in the summer of 2008 and roll out a series of service-oriented
classes and seminars for business and engineering students. In support of this
collaboration, IBM researchers will undertake projects with Karlsruhe researchers at the
university site. The university and IBM are also financing new professorships in SSME to
promote integrated business and technology lessons in the classroom.
Please take a moment to read the attached press release on the announcement, and share this
"first of a kind" initiative with your university counterparts. It's an important proof point in our
drive to implement SSME in collaboration with our university partners.
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
What’s been achieved so far:
in the UK
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
•
Key SSME Conferences / Publications
– Cambridge Service Science, Management and Engineering Symposium with
IBM co-sponsorship – July 2007
– Associated Green Paper: ‘Succeeding through Service Innovation: Developing
a service perspective on economic growth and prosperity
– Associated White Paper
•
Related SSME Developments
– *Service Science Forum run by Exeter University in Oct 07 & Mar 08
http://www.centres.ex.ac.uk/cserv/business_linked_activities/service_science_forum.php
•
IBM Keynotes @
– Images of Manufacturing Conference (EPSRC Manufacturing Futures Network) Oct 18 - pitch on
'Succeeding through Service Innovation, the Emerging discipline of Service Science'
–
IBM Key Note Speech at 21st Service Workshop @ Westminster - IBM & the SSME Initiative
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
What’s been achieved so far:
in the UK
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
•
Core Research
–
EPSRC/BAE Systems £2 million research grant for Service & Support Engineering Solutions to
research consortium led by Professor Duncan McFarlane of the University of Cambridge.
–
AIM - Advanced Institute of Management Research - 'AIM - the UK's Research Initiative on
Management' - Call for Mid Career Fellowships on Services
6 AIM Research Fellowships in Services announced
–
–
•
'The Economic and Social Research Council (ESRC) is inviting applications from eligible
institutions for Mid-Career Fellowships focused on services research'
http://www.aimresearch.org/overviewnews.html
Related Research
– Imperial College, London - IBM participation in 'Platforms for Innovation Research Project being
launched by Imperial College
–
Said Business School, Oxford - IBM participation in the 'Designing for Services' Research project
lead by Lucy Kimbell of the Said BS
–
EPSRC 'Block Grant' for Research in 'Servitisation' to Cranfield University .. the transition from
manufacturing to services
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
What’s been achieved so far:
in the UK
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
•
SSME-related Curriculum Development
–
MSc in Service Science at Westminster University announced 16th November at the 21st
Service Workshop @ Westminster University
–
MSc in Service Science & Management at Exeter University - actually announced in July
(see http://www.centres.ex.ac.uk/cserv/education/msc_service_science.php )
–
Glasgow - potential SSME module in their MBA, joint research programme to be lead by
Adam Smith Foundation, Glasgow Business School, European wide business journal issue
dedicated to SSME & forthcoming European Conference (2008)
–
Judge Business School, Cambridge University - MBA elective from Jan 09
–
Sheffield University - initial contact with Stephen Wood who has 'been tasked .. to look into
how we might take the concept of service sciences forward in terms of research and teaching
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
Backup:
Slides not used
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
Why focus on service?
Source: Monitor, 2004
April 2-4, 2008 – Paris, France
© 2008, AFSMI, SSPA, TPSA
Why focus on service?
New order intake / Installed base
Source: IfM, 2004
April 2-4, 2008 – Paris, France
© 2008, AFSMI, SSPA, TPSA
Why Focus on Services
in Technology?
Business Challenges
in Services
CEO Question:
“Why Should My Company
Re-Think Its R&D Spend?”
1. True, Product Has Been the Engine That Pulls Through The Services.
2. But, In Some Markets, Services Is Beginning To Pull Products.
3. And, Due To Its Sheer Size, Service Innovation May Be The Greatest
Unrealized Economic Opportunity In The Company
7/16/2015
April 2-4, 2008 – Paris, France
39
© 2008, AFSMI, SSPA, TPSA
Leading Business and Financial Issues
• Financial markets continue to undervalue services revenues and
profits relative to products making it difficult for companies to justify
service investments to financial analysts and shareholders.
• In consumer technology markets, consumers display an unwillingness
to pay for low value service, but willing pay significant premiums for
services they value.
• Customers are beginning to pressure maintenance prices due to low
value but tech companies are reluctant to modify such a successful
business model.
Businesses can benefit from SSME by applying it in
services engagements, in internal service design
and by building SSME into services marketing
7/16/2015
April 2-4, 2008 – Paris, France
40
© 2008, AFSMI, SSPA, TPSA
Service Systems: value co-creation
Lose-Win
Win-Win
(Coercion)
(Service: Value
•
Provider and customer interact to
co-produce value
•
Value is achieving desired change or
the prevention or undoing of unwanted
change
•
Changes can be physical, mental, or
social (= collective mental states –
common or distributed knowledge)
•
Value is in the eye of the beholder, and
may include complex subjective
intangibles, bartered – knowledge
intensive
•
Boundary of service experience in
space and time may be complex
co-production)
Provider
Value Creation
Service is Value Co-production, or finding Win-Win interactions between a provider and a customer.
A service system is an entity, individual, corporate or national. which consumes and produces services.
Lose-Lose
Win-Lose
(War: Value
(Loss-lead)
Co-destruction)
Customer / Client
Value Creation
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
Benefits: applying SSME in
services engagements
• Increasing the breadth of the dialogue with the
client
• Ability to resolve complex human, cultural
conflicts
• Move IBM towards leadership position in service
innovation
• Improved quality of delivery
Source: AoT Study: Benefits of SSME Q3 2007 - https://w3.webahead.ibm.com/w3ki/display/SSME/AoT+Study+-+Benefits+of+SSME
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
Benefits: applying SSME in
internal service design
• Reduce deal risk by broadening the scope of
inspection
• Better end to end continuity - improved hand-offs,
reduced cost of coordination
• More effective measurement of service delivery
cost factors to allow more aggressive pricing
• Broader scope of continuous improvement to
meet more aggressive standards
Source: AoT Study: Benefits of SSME Q3 2007 - https://w3.webahead.ibm.com/w3ki/display/SSME/AoT+Study+-+Benefits+of+SSME
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
Benefits: applying SSME in
services marketing
• Better articulation of the value proposition
• Better connection of the proposition to the
customer values
• More objective or scientific costing of services:
• Expressing values and aspirations in services
businesses
Source: AoT Study: Benefits of SSME Q3 2007 - https://w3.webahead.ibm.com/w3ki/display/SSME/AoT+Study+-+Benefits+of+SSME
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,
Revenue Mix vs. Estimated R&D Spend Mix
Estimated R&D Spending Allocation
For Technology Companies
Product R&D
95%
7/16/2015
April 2-4, 2008 – Paris, France
Service R&D
5%
45
© 2008, AFSMI, SSPA, TPSA
Benefits: refocusing academic
research programmes
•
•
•
•
Increase the contribution of research to the future of service based business
– The research community finds it difficult to relate to the services world and develop
relevant and valuable work; the services community lacks a framework into which such
work could be fitted
– Applying SSME in the services businesses would create such framework and a
feedback loop that would enable more relevant research
Discovery of white spaces in research agenda
– Current SSME research programmes take a broad view of services. Stronger coupling
with real business issues will stimulate the identification of specific topics: service
value; design; foundations; human aspects and simulation. These should be driven by
business needs which will stimulate research involvement in service tools, methods,
quality, architecture and representation
Open Innovation for IT Services
– Areas of the IT industry have benefited from Open Source communities that develop
standards and sharable assets although IT Services remains fragmented with
incompatible tools and methods and high level of wasted effort. Research should
become an active participant in services open standards
Delineation of proprietary areas of research
– Having understood where business wishes to engage in open innovation, firms will be
better able to see where we wish to develop differentiating technologies.
Source: AoT Study: Benefits of SSME Q3 2007 - https://w3.webahead.ibm.com/w3ki/display/SSME/AoT+Study+-+Benefits+of+SSME
April 2-4, 2008 – Paris, France
© 2008,TPSA
IBM
© 2008, AFSMI, SSPA,