Almaden Services Research © 2006 IBM Corporation November 20, 2006 Services Sciences, Management, and Engineering (SSME) Jakita N. [email protected]

Almaden Services Research

November 20, 2006 © 2006 IBM Corporation

Services Sciences, Management, and Engineering (SSME)

Jakita N. Owensby [email protected] P. Maglio [email protected] Spohrer [email protected] Murphy [email protected]

Frontiers of Knowledge in Science and Technology for Africa

University Leader’s Forum


© 2006 IBM Corporation2 SSME November 19, 2006

Overview

Motivations for Services Sciences, Management and Engineering (SSME)

What is meant by Services?

Academic Initiative



What is motivating the creation and development of Services Sciences, Management and Engineering (SSME)?

Economic growth depends on innovation – nationally and in the enterprise

US labor and GDP more than 75% services (major industrialized nations are the same, developing nations are close behind)

– US Bureau of Labor Statistics predicts 20% increase in services jobs by 2014

– Fastest growth in business and professional services, information services

Services innovation is not well understood

– More than technology innovation, services innovation is interdisciplinary (business, organizational and technology innovation)

SSME: urgent call to action to become more systematic about service innovation

– A new academic discipline and research area aimed at studying, improving and teaching service innovation



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The Rise of the Service Economy

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Nation % WW

Labor

%

A

%

G

%

S

25 yr %

delta S

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

Banglad. 2.2 63 11 26 30

Germany 1.4 3 33 64 44

Top Ten Nations by Labor Force Size(about 50% of world labor in just 10 nations)

A = Agriculture, G = Goods, S = Services

>50% (S) services, >33% (S) services

The World is Becoming One Big Service System

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Information Services are big and getting bigger

Services

Material

Information

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50%

Products

- from Uday Karmarkar, UCLA

US Gross National Product



What we see…

Services depend critically on people, technology, and co-production of value

People work together and with technology to provide value for clients

So a service system is a complex socio-techno-economic system

Growth requires innovation that combines people, technology, value, clients

Science & Engineering

Business &Management

Social & CognitiveSciences

Economics & Markets

BusinessInnovation

TechnologyInnovation

SocialInnovation

DemandInnovation



The global economy is at a tipping point

Technological advances– Network ubiquity– New sense of openness (from open access to information to open source)

Horizontally-integrated business operations– Dynamic transformation with limited disruption to the organization– Revenue expansion and customer equity are key business metrics

Shift in skill-level of workers– Continued need for domain experts– New need for people with focused knowledge in 1 or 2 domains and spectral

knowledge about related domains– Fusing of technical competency, industry-specific knowledge, organizational and

business-process expertise

A restructuring of the economic landscape through the creation and propagation of entrepreneurial capitalism – Effects:

• Struggles in corporate restructuring • New institutional forms developed such as venture capitalism, foundations and research

institutions



The 21st century demands uniquely-skilled people

Cross-disciplinary programs and degrees (SSME)

Fusing technical competency with industry specific knowledge and organizational and business-process expertise (depth and breadth)

Success requires open collaboration among academia, government and industry to transform how the pipeline of future skills is built



What is meant by Services?

In economics and marketing, a service is the non-material equivalent of a good. It is claimed to be a process that creates benefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets. (Wikipedia, 2006)

A service is a provider to client interaction that creates and captures value while sharing the risks of the interactions.

Services are the application of specialized competences (skills and knowledge) through deeds, processes, and performances for the benefit of another entity or the entity itself (Vargo & Lusch, 2004a)

Services are value that can be rented (in the broad sense) by the application of some process that the renter (client) participates in. This is a contrast with goods, whose value (once purchased) is owned by the customer (Lovelock & Gummesson, 2004)

The jury is still out on an agreed upon definition of services



What distinguishes a service from a good?

Services have characteristics that distinguish them from goods

– the customer of a service is typically a participant in the service process. The customer co-produces the value (or benefit) along with the service provider via ongoing interactions.

– the extent of the co-production varies from indicating preferences, e.g., styling preferences at a barbershop service, to being an active pseudo temporary “employee” of the service process, e.g., collecting your order at a fast-food restaurant, or scanning your items, bagging, and paying using a supermarket self-checkout service system.

The customer as co-producer has interesting consequences

– the quality of service (QoS) is typically tied to a customer’s (or set of customers’) perspectives and experiences.

• That is partly why, trust and reputation are very important aspects of any service business, e.g., the reputation system of eBay’s sellers and buyers.



Traditional vs. Electronic Services

SERVICE ENTERPRISES

ISSUE TRADITIONAL ELECTRONIC

Co-Production Medium Physical Electronic

Labor Requirement High Low

Wage Level Low High

Self-Service Requirement Low High

Transaction Speed Requirement Low High

Computation Requirement Medium High

Data Sources Multiple Homogeneous Multiple Non-Homogeneous

Driver Data-Driven Information-Driven

Data Availability/Accuracy Poor Rich

Information Availability/Accuracy Poor Poor

Size Economies of Scale Economies of Expertise

Service Flexibility Standard Adaptive

Focus Mass Production Mass Customization

Decision Time Frame Predetermined Real-Time

Tien, RPI



SSME – Definitions and Motivations

The application of scientific, management, and engineering disciplines to tasks that one organization beneficially performs for and with another (“services”).

– Make productivity, quality, compliance, sustainability, learning rates, and innovation rates more predictable in the service sector, especially complex organization to organization services – business to business, nation to nation, organization to population.

– Services are value co-production performances and promises between clients and providers, with alternative work sharing, risk sharing, information sharing, asset sharing, and decision sharing arrangements and relationships.



Visual representation of service system

client provider

statetransformsowns

negotiateClient owns some state or possesses some form of a state

Head, empty refrigerator, process

Client and provider negotiate the terms of the service

Style, prices for food,method of payment, terms for outsourcing

Client’s state is transformed by the provider

Fresh cut, groceries, less overhead, more efficient processes



SSME is really three things… An urgent “call to action”

– To become more systematic about innovation in services– Complements product and process innovation methods– To develop “a science of services”

A proposed academic multi-discipline– Draws on many existing disciplines

• Science – A way to create knowledge• Engineering – A way to apply knowledge and create value• Business Model – A way to apply knowledge and capture value • Management – Improves the processes of creating and capturing value

– Aims to integrate them into a new specialty

A proposed research area– Service systems are designed (computer systems)– Service systems evolve (linguistic and social systems)– Service systems have scale-emergent properties (economic systems)



From Computer Science to Service Science…

Computer

Science

Physicists

Electrical Engineers

Mathematicians

Philosophers

(Boolean Logic)

Need to hire Computer Scientists

Now IBM is working toEstablish Service Science

Need to hire Service Scientists



The state of services curricula and research

Surge of programs at the master’s level

– Easier to adopt new programs

– Focus on depth rather than breadth

There is a need for an integrated research program Connected to that is a need to generate a more coherent and standard

definition and language around services (theoretical framework)

Need for trained and hirable people • Urgent need for undergraduate and graduate education in service.

Service has not been viewed as a business function but instead as a personal matter or skill.

Service has not been documented, so innovation is difficult.



Moving toward a science of Services (SSME)

5 frameworks:

– A language that creates a unified way of talking about services that may be useful in creating knowledge about services and in unifying a community around services (theoretical framework)• Productivity, client, providers, service systems, etc.

– A way to understand the phenomena of services by measuring them and conducting “experiments” for services (empirical framework) • Simulation techniques are one obvious approach to modeling services

– A way for the community to identify and understand the relationships between variables (analytic framework)• Difficulty: The analysis of services involves variables that are intangible and difficult

to directly quantify (trust, loyalty)

– A way to inform the aesthetics of services (design framework)• How do people like to look at or interface with services?

– A way to inform the process of building and combining components to create services (engineering framework)



Academic Initiative:Some University Courses and Curricula

NSCU – Services Masters’ Program

UC Berkeley – Institute for Services Science (major offered Spring 2006)

Tsinghua University and Beijing University– Service Science courses offered Spring 2006

UC Merced– Service Science course and Service Science Minor to be offered in Fall 2006.

UC Santa Cruz – Technology and Innovation Management program started Fall 2005

Centre de Recherche et d'Appui pour la Formation et ses Technologies– Computer Science Master’s for SSME in 2006

Carnegie Mellon University– Master’s course “Managing Service Organizations”, eSourcing

Northwestern– Institute on complex systems

Florida A&M– Development of Services Track

Texas A&M– Development of Services Track



CITRIS – University of California, Berkeley

Center for research (discipline) and development of curriculum around services

– University “owns” the center

– Professors from Engineering, Computer Science, Economics, Business, Operations Research, Social Sciences, etc. affiliate with the center

• Research integration• Course development and teaching

– Administrative component responsible for spreading the word, securing grants, finding and capitalizing on collaborative opportunities with industry and government, coordinating efforts between departments, etc.



Michigan Technical University (MTU)

Services Systems Engineering (SSE)

– Full-blown undergraduate degree based out of the School of Engineering

– Development of degree program through National Science Foundation grant ($500k)

– Core engineering, business, and social science courses combined with new service systems engineering specific courses (8)

– Faculty from engineering, business, and social sciences will be teaching courses

• Two faculty devoted to SSE hired over the next 6 months-year

– To be offered Spring semester 2007/ Fall semester 2007



Florida Agricultural and Mechanical University (FAMU) Historically Black College and University (HBCU)

Developing services certificate or track with potential to expand to full blown undergraduate and graduate degrees

Early stages of services curriculum development– Focus on niche of services – IT Services

• Capitalizes on current strengths, expertise within participating departments– Finding champions within Computer Science, Business, and/or Social Sciences

to drive the effort– Engaging administration to assist in coordinating of efforts across departments– Grappling with who “owns” the initiative

• House in one department and cross-listed in others• Create an informal synergy between departments• Create a Center for Services through the university

– Developing IT services-focused course materials

Pilot of program Fall semester 2007



Some lessons learned (so far) There is a difference between designing a discipline and designing a

curriculum• Design of a discipline is the creation of a principled model of a coherent body of

research and practice. • Design of a curriculum is the creation of a program of study leading to a degree or

certificate. • Identify the key issues (for a discipline) and key topics (for a curriculum) that need

to be addressed and start from there. • Determine the goal and then determine what needs to be included to support the

program.

It cannot be taken for granted that you can start with what you already have.

– Focus on being right to market, not necessarily first to market.

– Employ a back-to-the-basics research paradigm to create simple useful models of the complex realities of service. • Note that the creation of simple will probably require deep analysis to yield

scientifically-based principles.



Some lessons learned (so far)

Finding a champion to head the effort and getting buy-in within a university may be difficult

– Tenure processes (focusing energy toward a new area can be dangerous for junior faculty; joint appointments can be dangerous)

– Participation across discipline

– Administrative issues (who gets “credit”)

Finding and focusing on a niche of services seems most effective for smaller colleges and universities

Focus on creating competency models is crucial

– Focus on cross-industry for a foundation in domains such as business processes, information engineering, information architecture and technologies.

– Focus on industry-specific for a foundation in project work, case study, and knowledge of industry-specific models.

– Development of new kinds of interact ional expertise that combines science, engineering, social science, management and ethics towards evolution and agreement on a language that reflect core concepts.



IBM’s SSME Course – Website is Here!

http://www.almaden.ibm.com/asr/SSME/coursematerials/



Interested in getting involved? Teaching courses that include or could include complex business to

business service case studies

Including SSME modules as courses or parts of courses

Performing research that could be published in the Journal of Service Research or other relevant journals or conferences

Encouraging students to intern with business service or service research organizations and/or Compete for PhD fellowships in services

Participating in industry-academic rotations

Developing tools that could enable SSME through current research

Creating business proposals or grant proposals related to SSME and service innovation and/or Competing for university research awards

Participating/speaking at in SSME events and/or Hosting one at your university

Creating/developing services related courses, degrees, centers, or institutes

[email protected]



Thank you for your attention!

Documents

Almaden Services Research © 2006 IBM Corporation November 20, 2006 Services Sciences, Management, and Engineering (SSME) Jakita N. [email protected]