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© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education and Business
Service Science Management & Engineering - London 1st July 2008
The Challenge of Services in the 21st Century- Opportunities for Education and Business
Kevin Bishop, Vice President, Marketing, IBM NE Europe
© 2008 IBM Corporation2
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Outline
Why Focus on Service?
Business challenges in service
Service Science whitepaper
© 2008 IBM Corporation3
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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
© 2008 IBM Corporation4
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Why focus on service?
© 2008 IBM Corporation5
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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.
Source: OECD Science, Technology and Industry Outlook 2004 - Jerry Sheehan
Norway
Iceland
SwedenFinlandPortugal
AustriaNetherlands
Italy
France
Spain
Greece
Germany
Denmark
Belgium
20
30
40
50
60
70
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Average BERD intensity, 1995-2000as a % of GDP (OECD data)
Inn
ov
ati
on
den
sit
y, 1
99
8-2
00
0 a
s a
% t
ota
l fir
ms
(Eur
ost
at C
IS3
su
rvey
)
Norway
Iceland
Sweden
Finland
Portugal
Austria
Netherlands
Italy
France
Spain
Greece
Germany
Denmark
Belgium
20
30
40
50
60
70
0.0 0.2 0.4 0.6 0.8
Average BERD intensity, 1995-2000 as a % of GDP (OECD data)
Inn
ov
ati
on
den
sit
y, 1
99
8-2
00
0a
s a
% t
ota
l fir
ms
(Eur
ost
at C
IS3
su
rvey
)
Manufacturing Services
© 2008, IBM
© 2008 IBM Corporation6
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Outline
Why Focus on Service?
Business challenges in service
Service Science whitepaper
© 2008 IBM Corporation7
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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
© 2008 IBM Corporation8
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Service Systems: a type of complex system
“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)
Unravelling and understanding complex systems is a foundation stone for SSME, from whichbetter services concepts, implementation and management models and tools can be developed.
© 2008, IBM
© 2008 IBM Corporation9
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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?
Fundamental and actionable changes in our approach to service delivery through research and innovation
What are the Goals?More value and higher satisfaction levels for customers
Dramatically improved margins for industryIndustry relevant projects for Academia
© 2008 IBM Corporation10
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Developing people with the service mindset and skills
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
Service Scientists: Adaptive Innovators
Source: IBM Research survey March 2007
What industry wants from professional researchers
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.
“Need l-shaped, T-Shaped people …” Stuart Feldman (Oct 6, 2006)
Business and M
anagement
Science and E
ngineering
Econom
ics and Social S
ciences
Math and O
perations Research
Com
puter Science &
Info. System
s
Industrial and System
s Engineering
Business A
nthropology
Organizationa
l Change &
Learning
Business and M
anagement
Science and E
ngineering
Econom
ics and Social S
ciences
Math and O
perations Research
Com
puter Science &
Info. System
s
Industrial and System
s Engineering
Business A
nthropology
Organizationa
l Change &
Learning
Business and M
anagement
Science and E
ngineering
Econom
ics and Social S
ciences
Math and O
perations Research
Com
puter Science &
Info. System
s
Industrial and System
s Engineering
Business A
nthropology
Organizationa
l Change &
Learning
Business and M
anagement
Science and E
ngineering
Econom
ics and Social S
ciences
Math and O
perations Research
Com
puter Science &
Info. System
s
Industrial and System
s Engineering
Business A
nthropology
Organizationa
l Change &
Learning
© 2008, IBM
© 2008 IBM Corporation11
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
SSME: what is it?
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
SSME is a call to action to improve service innovation, an emerging academic discipline and a new, integrative area of research.
© 2008, IBM
© 2008 IBM Corporation12
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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
D. 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
E. 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
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
Services Science: what’s in the box?SSME - Service Science, Management, and Engineering Discipline Classification System v 0.2 May
2007https://w3.webahead.ibm.com/w3ki/display/SSME/SSME+Disciplines
© 2008, IBM
© 2008 IBM Corporation13
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Services Science: the roadmap for skills
© 2008, IBM
SSME Launched
2004
EstablishAwareness 2004-2006
Adoption 2007 -2009
Embed 2008 -2010
Business Value2009 and Beyond
Plan Mobilize Execute Reinforce
Increase Focus and Impact for SSME/S421C
Key
Act
ivit
ies/
Met
rics
Results
White papers
Initial discussions with universitypartners
Workshops
Press hits onSSME/S421C
Web hits
Awareness in academia, industry, gov’t
Early adopters
SSME Summit
SSME tools andprograms growing
S421C defined
Service systems ascomplex systems
Government andfoundation funding
SSME graduates
Internal training
Internal hiring plans
Better trained workforce
+Service innovation
+Sales impact
+Client satisfaction
+Productivity
+Efficiency
+Learning speed onengagements
Broadened awareness
SSME curriculumdevelopment
focus and buy in
Joint researchprojects/awards
Case studiesdeveloped
Cross IBM SSME
White papers
Initial discussions with universitypartners
White papers
Initial discussions with universitypartners
Workshops
Press hits onSSME/S421C
Web hits
Awareness in academia, industry, gov’t
Early adopters
SSME Summit
SSME tools andprograms growing
S421C defined
Service systems ascomplex systems
Government andfoundation funding
SSME graduates
Internal training
Internal hiring plans
Better trained workforce
+Service innovation
+Sales impact
+Client satisfaction
+Productivity
+Efficiency
+Learning speed onengagements
Broadened awareness
SSME curriculumdevelopment
Joint researchprojects/awards
Case studiesdeveloped
Workshops
Press hits onSSME/S421C
Web hits
Awareness in academia, industry, gov’t
Early adopters
SSME Summit
Workshops
Press hits onSSME/S421C
Web hits
Awareness in academia, industry, gov’t
Early adopters
SSME Summit
SSME tools andprograms growing
S421C defined
Service systems ascomplex systems
Government andfoundation funding
SSME graduates
Internal training
Internal hiring plans
SSME tools andprograms growing
S421C defined
Service systems ascomplex systems
Government andfoundation funding
SSME graduates
Internal training
Internal hiring plans
Better trained workforce
+Service innovation
+Sales impact
+Client satisfaction
+Productivity
+Efficiency
+Learning speed onengagements
Better trained workforce
+Service innovation
+Sales impact
+Client satisfaction
+Productivity
+Efficiency
+Learning speed onengagements
Broadened awareness
SSME curriculumdevelopment
Joint researchprojects/awards
Case studiesdeveloped
Broadened awareness
SSME curriculumdevelopment
Joint researchprojects/awards
Case studiesdeveloped
© 2008 IBM Corporation14
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Outline
Why Focus on Service?
Business challenges in service
Service Science whitepaper
© 2008 IBM Corporation15
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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
© 2008 IBM Corporation16
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Paper Development Process
LaunchProcess /
Form Industrial
& AcademicCommittee
Industry / Academic
SymposiumIn
Cambridge
Green Paper
Development
Broad Industrial, Government& AcademicConsultation
Process
Paper Revision
and Whitepaper Release
Mar 07 July 07 July - Sept 07 Oct - Dec 07 Feb - Mar 08
© 2008 IBM Corporation17
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Improve understanding& create needed dialogue
Alignstakeholder commitments& actions
Service Science
Systematic approach to service innovation
Shared language and frameworks Deep customer-provider knowledge and modelling
Broad inclusive interdisciplinary & cultural approach
Awareness and prioritisation
Education: Adaptive innovators (“service mindset”)& SSME certificates(“T-shaped”)
Research: Service systems & Value propositions as foundational and integrative concepts
Business & Government: Service innovation roadmaps &Raised awareness
Strategies to guide on-going change
Transformingperformancemeasurement
Increasing Value from Service Innovation
Improve service quality, productivity & compliance
Sustainable innovation with reduced environmental hazards & risks
Improvements in employment
Economic growth & prosperity
OverallObjectives
Concepts & Deliverables
Key Challenges
StakeholderPriorities
Enabling Solution
“Succeeding through Service Innovation”White Paper
Education:People & Expertise
Research:Bridging & Integrating
Practitioners & Policy Makers:Data & Investment
Rationale and logic flow
© 2008 IBM Corporation18
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Recommendations for business
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.
© 2008 IBM Corporation19
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Recommendations for policy
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.
© 2008 IBM Corporation20
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Recommendations for research
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.
© 2008 IBM Corporation21
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Recommendations for education
1. Enable graduates from various disciplines to become “T-shaped 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.
© 2008 IBM Corporation22
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Social Science (People)
Management(Business)
Engineering (Technology)
Core Field of Study
Interactional Expertise Across Other Fields
Tower of Babel“Biggest problem in businessis people don’t know how to talk to other people in the
language they understand.”Charles Holliday, CEO Dupont
Based on slides by Jean Paul Jacob, IBM
Across industriesAcross culturesAcross functions
Across disciplines=
More experiencedMore adaptive
More collaborative
Designed together
How will the education system meet the growing demand for T-shaped people across both global
and local service enterprises?
© 2008 IBM Corporation23
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Summary
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.
© 2008 IBM Corporation24
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
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
© 2008 IBM Corporation25
The Challenge of Services in the 21st Century: Opportunities for Education & Business
Service Science Management & Engineering - London 1st July 2008
Thank you
Thank You
MerciGrazie
Gracias
Obrigado
Danke
Japanese
English
French
Russian
German
Italian
Spanish
Brazilian PortugueseArabic
Traditional Chinese
Simplified Chinese
Hindi
Tamil
Thai
Korean
Diolch
Welsh
© 2008 IBM Corporation
The Challenge of Services in the 21st Century: Opportunities for Education and Business
Service Science Management & Engineering - London 1st July 2008
IBM Appendix:Services Science progress
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
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 market-facing business units, working with clients and academia in a collaborative framework on a local and WW basis
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
The SRII - Who’s Involved
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
What’s been achieved so far: U.S. perspective
• 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
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
What’s been achieved so far: U.S. perspective
• 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
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
• 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
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
What’s been achieved so far: U.S. perspective
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
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.
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
What’s been achieved so far: in Europe
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
• 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
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
What’s been achieved so far: in the UK
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
• 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
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
What’s been achieved so far: in the UK
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
• 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
SSME has gathered major global momentum in the last 24 months in media, research, industry and government
© 2008, IBM
What’s been achieved so far: in the UK
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
Backup: Slides not used
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
Source: Monitor, 2004
Why focus on service?
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
Source: IfM, 2004
New order intake / Installed base
Why focus on service?
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
04/19/23 39
“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
CEO Question:
Why Focus on Services in Technology?Business Challenges in Services
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
04/19/23 40
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
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
Service Systems: value co-creation
• 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
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.
Win-Lose
(Loss-lead)
Lose-Lose
(War: Value
Co-destruction)
Win-Win
(Service: Value
co-production)
Lose-Win
(Coercion)
Win-Lose
(Loss-lead)
Lose-Lose
(War: Value
Co-destruction)
Win-Win
(Service: Value
co-production)
Lose-Win
(Coercion)
Customer / Client
Value Creation
Pro
vid
er
Val
ue C
reat
ion
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
Benefits: applying SSME inservices 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
© 2008, IBM
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, AFSMI, SSPA, TPSA
Benefits: applying SSME ininternal 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
© 2008, IBM
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, AFSMI, SSPA, TPSA
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
© 2008, IBM
April 2-4, 2008 – Paris, France © 2008, AFSMI, SSPA, TPSA
04/19/23 45
Revenue Mix vs. Estimated R&D Spend Mix
Estimated R&D Spending AllocationFor Technology Companies
Product R&D95%
Service R&D5%
April 2-4, 2008 – Paris, France © 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.
© 2008, IBM
Source: AoT Study: Benefits of SSME Q3 2007 - https://w3.webahead.ibm.com/w3ki/display/SSME/AoT+Study+-+Benefits+of+SSME