Service science intro 20110606 v1

© 2011 IBM Corporation

IBM University Programs World Wide (IBM UP)

Introduction to Service Science

Dr. James (“Jim”) C. [email protected] Champion and Director, IBM University Programs WWTo Educational Policy ThinkersJune 29th, 2011, Washington DC

2 © 2011 IBM CorporationIBM UP (University Programs) WW

Outline

Service science– Service systems thinking: The ABC’s

– Service systems dynamics: Four drivers of change

– Service systems re-design: Some examples• A College Course• K-12 & Higher Education

– Higher Education Specialization Opportunities (Depth)– K-12 General Education Preparation (Breadth)– The Goal: Adaptive “T-shaped professionals” (ready for life-long learning)

Why? Data and trends– Why and how technology is changing jobs

– Why higher education & certification levels matter (to individuals)

– And therefore, why higher education matters (to nations)

– Why the study of service systems matters (to nations)

– Why the study of service systems matters (to businesses) End Notes

– The birth of service science

– What about advanced manufacturing, outsourcing, sustainability challenges? • Holistic-product-service-systems, regional capacity, regional innovation ecosystems

– Learning more about service systems - pointers to 200+ books & conceptual foundations


Service Systems Thinking

A. Service Provider

• Individual• Institution• Public or Private

A. Service Provider


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

• People or Individuals, dimensions of • Business or Institutions, dimensions of • Product or Tech/Environment, physical dimensions • Information or Knowledge, symbolic dimensions

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

• People or Individuals, dimensions of • Business or Institutions, dimensions of • Product or Tech/Environment, physical dimensions • Information or Knowledge, symbolic dimensions

B. Service Customer


B. Service Customer


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)

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

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

“Service is the application ofcompetence for the benefitof another entity.”

Example Provider: College (A)Example Target: Student (C)Discuss: Who is the Customer (B)?- Student?- Parents?- Future Employers?- Professional Associations?- Government, Society?


Service System Dynamics: Four Key Drivers of Change

Provider: Technology (Tech) & Business Models (Service Systems)– New technology to boost productivity & capacity (innovate)– Use technology to perform routine manual, cognitive, and transactional work– New business models and new ventures (for-profit & non-profits)

Customer: Self Service– New self-service options to lower costs & expand choice (educate)

Authority: Rules– New rules to fix problems & achieve policy goals (regulate)– Institutional diversity and governance of resource commons (Ostrom et. al.)

Competitors: Rankings– New rankings to guide decision-making & gain “valued” customers (differentiate)– Calculating customer lifetime value (Rust et. al.)


Example Service System Re-Design: A College Course

Problem: What if a college course had…– Input: Student quality lower

– Process: Faculty motivation lower

– Output: Industry fit lower

Solution: Tech + Self-Service– E: -20% E-learning enrollment

pre-certification

– F. +10% Faculty interest tuning

– J. +10% on-the-Job skills tuning

After a decade the course may look quite differentService systems are learning systems: productivity, quality, compliance, sustainable innovation

Maglio, P., Srinivasan, S., Kreulen, J.T., Spohrer, J. (2006), Service systems, service scientists, SSME, and innovation. Communications of the ACM, 49(7), 81-85.

Year 1: 20%

Year 2: 20%

Year 3: 20%

Year N: 20%

. . . . . . . .

E F J


Example: Specialization Opportunities for Higher EducationSystems 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: Observing the Stakeholders (As-Is)

Starting Point 2: Observing their Resources & Access (As-Is)

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

Value Realization: Doing (To-Be)

disciplines

systems


K-12 STEM: “The systems we live in, and the systems we are…”

“Imagine a better service system, and use STEM language to explain why it is better”STEM = Science, Technology, Engineering, and MathematicsSee NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635

See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning

Challenge-based Project to Design Improved Service Systems

– K - Transportation & Supply Chain

– 1 - Water & Waste Recycling

– 2 - Food & Products (Nano)

– 3 - Energy & Electric Grid

– 4 – Information/ICT & Cloud (Info)

– 5 - Buildings & Construction

– 6 – Retail & Hospitality/Media & Entertainment (tourism)

– 7 – Banking & Finance/Business & Consulting

– 8 – Healthcare & Family Life/Home (Bio)

– 9 – Education /Campus & Work Life/Jobs & Entrepreneurship (Cogno)

– 10 – City (Government)

– 11 – State/Region (Government)

– 12 – Nation (Government)

– Higher Ed – T-shaped depth added, cross-disciplinary project teams

– Professional Life – Adaptive T-shaped life-long-learning & projects

Systemsthat focus onGoverning

Systemsthat focus on

Human Activities andDevelopment

Systemsthat focus onFlow of things


The Goal: Adaptive T-shaped professionalsReady for Life-Long-LearningReady for T-eamwork

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

Many disciplines(understanding & communications)

Many systems(understanding & communications)

Deep in one discipline

(ana

lytic thinking & problem

solving)

Deep in one system

(analytic thinking & problem

solving)

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

BREADTH

DE

PT

H


Data: Why and how technology is changing jobs

-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.

Expert Thinking

Complex Communication

Routine Manual

Non-routine Manual

Routine Cognitive


Data: Why education certification levels matter (to individuals)

…But it can be costly, American student loan debt is over $900M


Data: And therefore, why higher education matters (to nations)% WW GDP and % WW Top-500-Universities

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

% g

loba

l G

DP

% top 500 universities

Strong Correlation (2009 Data): National GDP and University Rankingshttp://www.upload-it.fr/files/1513639149/graph.html


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.

Data: Why the study of service systems matters (to nations)


Data: Why the study of service systems matters (to businesses)

SOFTWARE

SYSTEMS(AND FINANCING)

SERVICES

2010 Pretax Income Mix Revenue Growth by Segment

Services

Software

Systems

44%

17%

39%

IBM Annual Reports



StakeholderPriorities

Education

Research

Business

Government


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





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






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







Skills& Mindset

Skills& Mindset

Knowledge& Tools

Knowledge& Tools

Employment& Collaboration


Policies & Investment


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


Encourage an interdisciplinary approach


The white paper offers a starting point to -


The Birth of Service Science: 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

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




Education

Research

Business

Government


Education

Research

Business

Government

Service Systems





Service Systems





Service Science






Service Science








Service Innovation







Service Innovation







Skills& Mindset

Skills& Mindset

Knowledge& Tools

Knowledge& Tools











The Birth of Service Science: IBM Centennial Icon of 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

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


What about advanced manufacturing?http://www.youtube.com/watch?v=nd5WGLWNllA


Rethinking “Product-Service Systems”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)

Pro

du

ctio

n-li

ne

ap

pro

ach

to

se

rvic

e.

HB

R.

e.g., IBM

e.g., Citibank

“Eve

ryb

od

y is

in s

erv

ice

...

So

me

thin

g is

wro

ng

…

Th

e in

du

stria

l wo

rld h

as

cha

ng

ed

fa

ste

r th

an

ou

r ta

xon

om

ies.

”.


Holistic Product-Service-Systems& Regional Innovation Ecosystems http://www.service-science.info/archives/1056

Examples: Nations, States, Cities, Universities, Luxury Hotels, Cruise Ships, Households

“Whole Service” Subsystems: Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.

Definition: A service system that can support its primary populations, independent of all external service systems, for some period of time, longer than a month if necessary, and in some cases, indefinitely

Balance independence with interdependence, without becoming overly dependent (outsourcing limits, maximum re-cycling for sustainability)

Nation

State/Province

City/Region

HospitalMedicalResearch

UniversityCollegesK-12

LuxuryResortHotels

Family(household)

Person(professional)

For-profits

Non-profits

Start-UpsNew Ventures

~25-50% of start-ups are newIT-enabled service offerings

SaaSPaaSIaaS

http://www.thesrii.org


Learning MoreAbout Service Systems…

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


Service Science: Conceptual Framework

Resources: Individuals, Institutions, Infrastructure, Information Stakeholders: Customers, Providers, Authorities, Competitors Measures: Quality, Productivity, Compliance, Sustainable Innovation Access Rights: Own, Lease, Shared, Privileged

Ecology(Populations & Diversity)

Entities(Service Systems, both Individuals & Institutions)

Interactions(Service Networks,

link, nest, merge, divide)

Outcomes(Value Changes, both

beneficial and non-beneficial)

Value Proposition (Offers & Reconfigurations/

Incentives, Penalties & Risks)

Governance Mechanism (Rules & Constraints/

Incentives, Penalties & Risks)

Access Rights(Relationships of Entities)

Measures(Rankings of Entities)

Resources(Competences, Roles in Processes,

Specialized, Integrated/Holistic)

Stakeholders(Processes of Valuing,

Perspectives, Engagement)

Identity(Aspirations & Lifecycle/

History)

Reputation(Opportunities & Variety/

History)

prefer sustainable non-zero-sum

outcomes,i.e., win-win

win-win

lose-lose win-lose

lose-win


Service system entities configure four types of resources

First foundational premise of service science:

– Service system entities dynamically configurefour types of resources

– Resources are the building blocks of entity architectures

Named resources are:– Physical or – Not-Physical– Physicist resolve disputes

Named resources have:– Rights or– No Rights– Judges resolve disputes

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

Physical

Not-Physical

Rights No-Rights

2. Technology/EnvironmentInfrastructure

4. SharedInformation/

SymbolicKnowledge

1. People/Individuals

3. Organizations/Institutions

Formal service systems can contract to configure resources/apply competenceInformal service systems can promise to configure resources/apply competence

Trends & Countertrends (Balance Chaos & Order):(Promise) Informal <> Formal (Contract)

(Relationships & Attention) Social <> Economic (Money & Capacity)(Power) Political <> Legal (Rules)

(Evolved) Natural <> Artificial (Designed)(Creativity) Cognitive Labor <> Information Technology (Routine)

(Dance) Physical Labor <> Mechanical Technology (Routine)(Atoms) Transportation <> Communication (Bits)

(Tacit) Qualitative <> Quantitative (Explicit)(Secret) Private <> Public (Shared)

(Anxiety-Risk) Challenge <> Routine (Boredom-Certainty)(Mystery) Unknown <> Known (Justified True Belief)


Service system entities calculate value from multiple stakeholder perspectives

Second foundational premise of service science

– Service system entities calculate value from multiple stakeholder perspectives

– Value propositions are the building blocks of service networks

A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives of multiple stakeholders according to culturally determined value principles.

The four primary stakeholder perspectives are: customer, provider, authority, and competitor

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

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

Will we?(invest tomake it so)

StrategicSustainable Innovation(Marketshare)

4.Competitor(Substitute)

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

May we?(offer anddeliver it)

RegulatedCompliance(Taxes andFines, Quality of Life)

3.Authority

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

Can we?(deliver it)

CostPlus

Productivity(Profit, Mission, Continuous Improvement, Sustainability)

2.Provider

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

Should we?(offer it)

ValueBased

Quality(Revenue)

1.Customer

ValuePropositionReasoning

BasicQuestions

PricingDecision

MeasureImpacted

StakeholderPerspective(the players)

Value propositions coordinate & motivate resource access


Service system entities reconfigure access rights to resources by mutually agreed to value propositions

Third foundational premise of service science

– Service system entities reconfigure access rights to resources by mutually agreed to value propositions

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

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


Service system entities interact to create ten types of outcomes

Four possible outcomes from a two player game

ISPAR generalizes to ten possible outcomes

– win-win: 1,2,3– lose-lose: 5,6, 7, maybe 4,8,10– lose-win: 9, maybe 8, 10– win-lose: maybe 4

lose-win(coercion)

win-win(value-cocreation)

lose-lose(co-destruction)

win-lose(loss-lead)

Win

L

ose

Pro

vide

r

Lose WinCustomer

ISPAR descriptive model


Service system entities learn to systematically exploit info & tech

L

Learning Systems(“Choice & Change”)

Exploitation(James March)

Exploration(James March)

Run/Practice-Reduce(IBM)

Transform/Follow(IBM)

Innovate/Lead(IBM)

Operations Costs

Maintenance Costs

Incidence Planning & Response Costs (Insure)

Incremental

Radical

Super-Radical

Internal

External

Interactions

“To bethe best,

learn fromthe rest”

“Doublemonetize,

internal winand ‘sell’ to

external”

“Try tooperateinside

thecomfortzone”

March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY.


Service system entities are physical-symbol systems

Service is value cocreation.

Service system entities reason about value.

Value cocreation is a kind of joint activity.

Joint activity depends on communication and grounding.

Reasoning about value and communication are (often) effective symbolic processes.


Summary

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

Physical

Not-Physical

Rights No-Rights

2. Technology

4.. SharedInformation

1. People

3. Organizations

1. Dynamically configure resources

Model of competitor: Does it put us ahead?

Will we?StrategicSustainable Innovation

4.Competitor

Model of authority: Is it legal?

May we?RegulatedCompliance3.Authority

Model of self: Does it play to our strengths?

Can we?CostPlus

Productivity2.Provider

Model of customer: Do customers want it?

Should we?Value Based

Quality1.Customer

ReasoningQuestionsPricingMeasureImpacted

StakeholderPerspective

2. Value from stakeholder perspectives

S AP C

3. Reconfigure access rights

4. Ten types of outcomes (ISPAR)

5. Exploit information & technology

6. Physical-Symbol Systems


Smarter = Sustainable Innovation (reduce waste, expand capabilities)

Computational System

Building Smarter TechnologiesRequires investment roadmap

Service Systems: Stakeholders & Resources

1. People 2. Technology3. Shared Information4. Organizations

connected by win-win value propositions

Building Smarter Universities & CitiesRequires investment roadmap

29

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” or mystery to explain?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 architectures and mechanisms for computing non-zero-sumEntity Architectures (ЄN) of nested, networked Holistic Service Systems (HSS)


What is service science? A service system? The ABC’s?

Economics & Law

Design/ Cognitive Science Systems

Engineering

OperationsComputer Science/

Artificial Intelligence

Marketing

“a service system isa human-made system to improve

provider-customer interactionsand value-cocreation outcomes,

studied by many disciplines,one piece at a time.”

“service science isthe transdisciplinary study of

service systems &value-cocreation”

The ABC’s:The provider (A)

and a customer (B)transform a target (C)

Service science intro 20110606 v1

Education

editors karwowski

skillsdevelop

concerned

environmental

direct customer

multiple stakeholder

edge technology

student loan