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© 2011 IBM Corporation
IBM University Programs & open worldwide entrepreneurship research (IBM UPower)
Update on Service Science Progress & Directions: SSME+D (for Design) Evolving
Dr. James (“Jim”) C. [email protected] Champion and Director IBM UPower(University Programs & open worldwide entrepreneurship research)Singapore TrainingVision® Telepresence Event, August 10th, 2011
Working Together to Build a Smarter Planet
2 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Outline
Introduction: IBM– IBM Almaden, IBM and Service Science
– Service Systems and Our 21st Century World
Stimulus: Service Growth– The World’s Economic Growth
– IBM’s Revenue Growth
Response: “More Systematic” Service Innovation– Cambridge University Report
– Arizona State University Report
Evolution: SSME+D (for Design) for a Smarter Planet– What is Smarter Planet?
– How to measure Quality-of-Life?
– How to visualize Service Science?
– What’s the Skills Goal? Hint: T-Shaped People
– Where are the Opportunities?
– Where is the “Real Science” in SSME+D?
3 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Come visit IBM Almaden Research Center, San Jose, CA
Upcoming Conferences– Sept 27th, 2011
• Future Technologies,Skills & Jobs
– July 2012• ISSS & SRII San Jose• HSSE San Francisco
More Information– Blog
• www.service-science.info– Twitter
• @JimSpohrer– Presentations
• www.slideshare.net/spohrer– Email
4 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
IBM operates in 170 countries around the globe
IBM has 426,000 employees worldwide 2010 Financials
Revenue - $ 99.9B Net Income - $ 14.8B EPS - $ 11.52 Net Cash - $11.7B
21% of IBM’s revenue in growth market countries; growing at 13% in late 2010
Number 1 in patent generation for 18 consecutive years ; 5,896 US patents awarded in 2010
More than 40% of IBM’s workforce conducts business away from an office
5 Nobel Laureates
9 time winner of the President’s National Medal of Technology & Innovation - latest award for Blue Gene Supercomputer
“Let’s Build a Smarter Planet"
The Smartest Machine On Earth
100 Years of Business & Innovation
5 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
IBM Centennial: Icon of Progress
6 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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 is ahuman-made system to improve provider-customer interactionsand value-cocreation outcomes,
by dynamically configuring resourceaccess via value propositions,
most often 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)
7 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Our 21st Century World:Nested, Networked Holistic Service Systemshttp://www.service-science.info/archives/1056 Holistic Service Systems provide access to
“Whole Service” to people inside, including Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.
Examples: Nations, States, Cities, Universities, Hotels, Hospitals, Homes
Definition: An holistic service system is a service system that can provide “whole service” to its primary population of people, independent of all external service systems, for an extended period of time, balancing independence with interdependence (outsourcing limits, re-cycle to sustain, etc.)
University-Based Entrepreneurial Ecosystems (U-BEE’s): Universities are usually in the “top five” job creators of regions, when they have associated incubators & science-technology parks, super-computing data centers, hospitals, cultural & conference hotels, K-12 schools, etc.
Nation
State/Province
City/Region
UniversityCollege
K-12
Cultural &ConferenceHotels
HospitalMedical
Research
Worker(professional)
Family(household)
For-profits
Non-profits
U-BEEJob Creators
~25-50% of start-ups are newIT-enabled service offerings
SaaSPaaSIaaS
http://www.thesrii.org
8 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Growth of Service in National Economies
Daryl Pereira/Sunnyvale/IBM@IBMUS,
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
NationMaster.com, 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.
9 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Growth of Service Revenue at IBM
SOFTWARE
SYSTEMS(AND FINANCING)
SERVICES
2010 Pretax Income Mix Revenue Growth by Segment
Services
Software
Systems
44%
17%
39%
IBM Annual Reports
What do IBM Service Professionals Do? Run IT & enterprise systems for customers,help Transform customer processes to best practices, and Innovate with customers.
© 2011 IBM Corporation
IBM University Programs & open worldwide entrepreneurship research (IBM UPower)
StakeholderPriorities
Education
Research
Business
Government
StakeholderPriorities
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
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 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
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
Develop programmes & qualifications
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
Growth in service GDP and jobs
Service quality & productivity
Environmental friendly & sustainable
Urbanisation &aging population
Globalisation & technology drivers
Opportunities for businesses, governments and individuals
Skills& Mindset
Skills& Mindset
Knowledge& Tools
Knowledge& Tools
Employment& Collaboration
Employment& Collaboration
Policies & Investment
Policies & Investment
Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015
Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015
Encourage an interdisciplinary approach
Encourage an interdisciplinary approach
The white paper offers a starting point to -
The white paper offers a starting point to -
Priorities: Succeeding through Service Innovation - 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
11 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Priorities: Research Priorities: Research Framework Framework
for the Science of Servicefor the Science of ServicePervasive Force: Leveraging Technology to Advance Service
Strategy Priorities
Execution Priorities
Fostering ServiceInfusion and Growth
Improving Well-Being through
Transformative Service
Creating and Maintaining a Service Culture
Stimulating Service Innovation
Enhancing Service Design
Optimizing Service Networks and Value Chains
Effectively Branding and Selling Services
Enhancing the Service Experience through
Cocreation
Measuring andOptimizing the Value of
Service
Development Priorities
Source: Global Survey of Service Research Leaders (Ostrom et al 2010)
12 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Evolution: SSME+D (for Design) for a Smarter PlanetWhat is Smarter Planet? Harmonized smarter systems.
INSTRUMENTED
We now have the ability to measure, sense and see the exact condition of practically everything.
INTERCONNECTED
People, systems and objects can communicate
and interact with each other in entirely new
ways.
INTELLIGENT
We can respond to changes quickly and accurately, and get better results
by predicting and optimizing
for future events.
WORKFORCE
PRODUCTS
SUPPLY CHAIN
COMMUNICATIONS
TRANSPORTATION BUILDINGS
IT NETWORKS
13 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Quality-of-Life: How to measure?
A. Systems that focus on flow of things that humans need (~15%*)1. Transportation & supply chain
2. Water & waste recycling/Climate & Environment
3. Food & products manufacturing
4. Energy & electricity grid/Clean Tech
5. Information and Communication Technologies (ICT access)B. Systems that focus on human activity and development (~70%*)
6. Buildings & construction (smart spaces) (5%*)
7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*)
8. Banking & finance/Business & consulting (wealthy) (21%*)
9. Healthcare & family life (healthy) (10%*)
10. Education & work life/Professions & entrepreneurship (wise) (9%*)C. Systems that focus on human governance - security and opportunity (~15%*)
11. Cities & security for families and professionals (property tax)
12. States/regions & commercial development opportunities/investments (sales tax)
13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax)
20/10/10
0/19/0
2/7/42/1/1
7/6/11/1/0
5/17/27
1/0/2
24/24/1
2/20/247/10/3
5/2/2
3/3/10/0/0
1/2/2
Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities
* = US Labor % in 2009.
“61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”
14 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Systems-Disciplines Matrix: Visualizing the Scope of Service Science
Disciplines– Stakeholder-focus
• E.g., Customer = marketing
– Resource-focus
• E.g., Technology = engineering
– Change-focus
• E.g., Future = design
– Value-focus
• E.g., Innovation = entrepreneurship
Stakeholders
Resources
Change
Value
Flow
s Hum
an D
evelopment
Governanc
e Governanc
e
Systems– Flows
• E.g., Transportation– Human Development
• E.g., Health– Governance
• E.g., City-level-security
15 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Systems-Discipline Matrix: More DetailSystems 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: Observe the Stakeholders (As-Is)
Starting Point 2: Observe their Resource Access (As-Is)
Change Potential: Think (Has-Been & Might-Become & To-Be)
Value Realization: Do (New As-Is)
disciplines
systems
16 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
What are T-shaped professionals?Ready for Life-Long-LearningReady for T-eamworkReady to Help Build a Smarter Planet
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
17 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Where are the opportunities? Everywhere!
18
Time
ECOLOGY
14BBig Bang
(NaturalWorld)
10KCities
(Human-MadeWorld)
sun (energy)
writing(symbols and scribes,
stored memoryand knowledge)
earth(molecules &
stored energy)
written laws(governance and
stored control)
bacteria(single-cell life)
sponges(multi-cell life)
money(governed
transportable valuestored value,
“economic energy”)
universities(knowledge workers)
clams (neurons)trilobites (brains)
printing press (books)steam engine (work)200M
bees (socialdivision-of-labor)
60
transistor(routine
cognitive work)
Where is the “Real Science” - mysteries to explain?In the many 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-sum
Entity Architectures (ЄN) of nested, networked Holistic-Product-Service-Systems (HPSS)
19 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Thank-You! Questions?
Dr. James (“Jim”) C. SpohrerInnovation Champion & Director, IBM University Programs & open worldwide entrepreneurship research (IBM UPower) [email protected]
“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org“Universities are major employers in cities and key to urban sustainability.” – Coalition of USU
“Cities learning from cities learning from cities.” – Fundacion Metropoli“The future is already here… It is just not evenly distributed.” – Gibson
“The best way to predict the future is to create it/invent it.” – Moliere/Kay“Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer
“Today’s problems may come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells
“The future is born in universities.” – Kurilov“Think global, act local.” – Geddes
20 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Understanding the Human-Made World
See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html
Also see: Symbolic Species, DeaconCompany of Strangers, SeabrightSciences of the Artificial, Simon
21 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Fun: CityOne Game to Learn “CityInvesting”Serious Game to teach problem solving for real issues in key industries, helping companies to learn how to work smarter. Energy, Water, Banking, Retail
http://www.ibm.com/cityone
22 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
World Population & Service System Scaling
23 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
Spohrer, JC (2011) On looking into Vargo and Lusch's concept of generic actors in markets, or“It's all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201.
24 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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)(Relationships) Social Labor <> Transaction Processing (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)
25 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
– Citizens: special customers– Entrepreneurs: special providers– Parents: special authority– Criminals: special competitors
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
26 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
27 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
Maglio PP, SL Vargo, N Caswell, J Spohrer: (2009) The service system is the basic abstraction of service science. Inf. Syst. E-Business Management 7(4): 395-406 (2009)
28 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Service system entities learn to systematically exploit technology:Technology can perform routine manual, cognitive, transactional work
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.
29 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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.
Newell, A (1980) Physical symbol systems, Cognitive Science, 4, 135-183.
Newell, A & HA Simon(1976). Computer science as empirical inquiry: symbols and search. Communications of the ACM, 19, 113-126.
30 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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/Infrastructure
4.. SharedInformation
1. People/Individuals
3. Organizations/Institutions
1. Dynamically configure resources (4 I’s)
Model of competitor: Does it put us ahead?
Will we?StrategicSustainable Innovation
4.Competitor/Substitutes
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
31 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
32 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Service Systems Thinking: ABC’s
A. Service Provider
• Individual• Institution• Public or Private
A. Service Provider
• Individual• Institution• Public or Private
C. Service Target: The reality to be transformed or operated on by A, for the sake of B
• Individuals or people, dimensions of • Institutions or business and societal organizations,
organizational (role configuration) dimensions of• Infrastructure/Product/Technology/Environment,
physical dimensions of• Information or Knowledge, symbolic dimensions
C. Service Target: The reality to be transformed or operated on by A, for the sake of B
• Individuals or people, dimensions of • Institutions or business and societal organizations,
organizational (role configuration) dimensions of• Infrastructure/Product/Technology/Environment,
physical dimensions of• Information or Knowledge, symbolic dimensions
B. Service Customer
• Individual• Institution• Public or Private
B. Service Customer
• Individual• Institution• Public or Private
Forms ofOwnership Relationship
(B on C)
Forms ofService Relationship(A & B co-create value)
Forms ofResponsibility Relationship
(A on C)
Forms ofService Interventions
(A on C, B on C)
Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a science of service systems. Computer, 40, 71-77.From… Gadrey (2002), Pine & Gilmore (1998), Hill (1977)
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? They benefit…- Parents? They often pay…- Future Employers? They benefit…- Professional Associations?- Government, Society?
A B
C
33 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Service System Dynamics: Four Key Drivers of Change
Provider: Technology (Tech) & Sustainable Value-Cocreation Models– New technology to boost productivity & capacity (innovate)
– Use technology to perform routine manual, cognitive, and transactional work
– New relationship networks: 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)
– Hint: You want to be at the top of an independently ranked list of what customers are looking for…
– Especially for “valued” customers - calculating customer lifetime value (Rust et. al.)
34 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
35 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Service Systems Are Complex Systems
• Types• A = Informal
• B = Formal• Dimensions
• 1. Social Systems
• 2. Technical Systems
• 3. Environmental Systems
• 4. Economic Systems
• 5. Political Systems
• 6. Learning Systems
• 7. Information Systems
• 8. Physical-Symbol Systems
A.
B.
1.2.
3.
4.5.
6.
7.
8.
36 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
What about advanced manufacturing?http://www.youtube.com/watch?v=nd5WGLWNllA
37 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
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
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ed
fa
ste
r th
an
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r ta
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”.
38 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Example Service Systems Innovation Framework
“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.
Innovate (inside and outside) systems that create value
39 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Most Wanted: A CAD for Service System DesignCBM: Component Business Model
WBM and RUP: Work Practices & Processes
SOA: Technical Service-Oriented Architecture
Key Performance Indicators (KPIs)IBM IBV: Component Business ModelsIEEE Computer, Jan 2007
40 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Ultimately, a Service Ecology Simulation Tool is Needed
2000 2010 2020 2030
Log Entities
6
9
12
15
Projected
Simulation Capability Earth Simulator
Universe Simulation Brain Simulation
Heart Simulation
CBM-based Industry Simulations - 2013?
Every decade both HPC and PC platforms increase complex simulation capabilities by 1000x.- HPC: (2000 106), (2010 109), (2020 1012), (2030 1015) …- PC: (2000 103), (2010 106), (2020 109), (2030 1012) …
41 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
A Game of Life: Essentials
Game = board with squares & rules– Infrastructure both Environmental and Technological
• PS (Physical Systems - Environment)– Natural Endowment (hidden & observable information)
• PSS (Physical Symbol Systems – Environment & Technology)– Biological PSS (observable information – DNA, RNA, proteins, etc.)– Technological PSS (observable information – states of system, bits, etc.)
Life = multiple generations of entities– Entities = SSE (Service System Entities)
• Individuals with Competencies & Life-Spans– Competencies (vary with age)– Life-Spans (vary with stage)
• Institutions with Roles & Rules– Roles (Competency-Levels and Pay-Levels)– Rules (Compliance-Levels and Tax-Levels)
Physical
Not-Physical
Rights No-Rights
2. Technology/EnvironmentalInfrastructure
4. SharedInformation
1. People/Individuals
3. Organizations/Institutions
1. Dynamically configure resources (4 I’s)
42 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Life = Multiple Generations of Entities (200 years = 10 generations x 20 years)Pedagogy: Ten Social-Technological-Economic-Environmental-Political (STEEP) StagesThought Experiment: Binary-Board-Space (Rule: Toggles Each Generation)
1. Hunter-Gatherer Knowledge-Value Economy 1- 2K population (20 people/sq mile * 100 sq miles)
2. Transition Hunter-Gatherer Knowledge-Value Economy 2- 4K population (40 people/sq mile * 100 sq miles)
3. Agricultural Knowledge-Value Economy 1- 8K population (80 people/sq mile * 100 sq miles)
4. Transition Agricultural Knowledge-Value Economy 2- 16K population (160 people/sq mile * 100 sq miles)
5. Manufacturing Knowledge-Value Economy 1- 32K population (320 people/sq mile * 100 sq miles)
6. Transition Manufacturing Knowledge-Value Economy 2- 64K population (640 people/sq mile * 100 sq miles)
7. Service-Information Knowledge-Value Economy 1- 128K population (1,280 people/sq mile * 100 sq miles)
8. Transition Service-Information Knowledge-Value Economy 2- 256K population (2,560 people/sq mile * 100 sq miles)
9. Sustainable-Innovation Knowledge-Value Economy 1- 512K population (5,120 people/sq mile * 100 sq miles)
10.Transition Sustainable-Innovation Knowledge-Value Economy 2- 1024K population (10,240 people/sq mile * 100 sq miles)
11. And beyond!
10 miles
In Use
Recycle
Rule:Toggles EachGeneration
43 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Game = Board with Squares & Rules Example: Possible STEEP Stages 9 & 10 (infrastructure, sustainable-innovation cities)
Imagine nested holistic product-service-systems entities…– 10 Continents/planet
– 10 Nations/continent
– 10 States/nation
– 10 Cities/state
– 4 Sectors/city (interconnect to others)
– 11 Systems/sector
Rules: Board-space toggles each generation– 20 years/generation
– New infrastructure/generation
World: Further Pedagogical Purposes– “World Simulator” benchmarking
– Search to accelerate learning • 10,000 city experiments/generation• Low skill/raw materials > Hi-talent/tech
– Each generation new outcomes• Talents (skills & jobs)• Technologies (recycle & rebuild)• Investments (script & performance)
Occupied(In Use)
Recycling(De-construction &
Re-construction)
waterfood/products
energyICT
R&H/M&E/C&Sfinancehealth
educationgovernance
transportation
buildings/family
Sector 1city
interconnect
11 Systems
Sector 2state
interconnect
Sector 3nation
interconnect
Sector 4continent
interconnect
Toggle each generation – 20 year
cycle
44 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Entities = Life-Cycle Script Example: Possible STEEP Stages 9 & 10 (individuals, multiple generations of entities)
Children – Age 0-20– (Local & Global) Grow, Learn, & Have Fun
Parents – Age 20-40 (offspring 2)– (Next Local) Reproduce, Raise Children, & Build New “City” SET Stage
Grand-Parents – Age 40-60 (offspring 4)– (Local) Run the “City” You Built & Connect with Family
Great-Grand-Parents – Age 60-80 (offspring 8)– (Global) Travel the World, Enjoy Experiences, & Share Ideas
Great-Great-Grand-Parents – Age 80-100 (offspring 16)– (Local) Return, Reconnect, and Document History & Future Plans
Great-Great-Great-Grand-Parents – Age 100-120 (offspring 32)– (Local & Global) Celebrate, Tell Stories, Depart & Explore Further Realms
45 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
The Game of Life: Service Science Framework
The Game Board: A configuration of PS (Physical Systems), with interspersed PSS (Physical Symbol Systems) and SSE (Service System Entities).
– The SSE are PSS are PS
– The infrastructure is PS + PSS
• The PS have hidden information (state)• The PSS have observable information (state and read-write)
– The SSE use information to co-create value
• World model – information about the world (The Game Board)• Self model – information about self (SSE)• The SSE have a beginning and an end (life-cycle)• The SSE judge quality-of-life across their life-cycle
– The game is each generation of SSE try to improve quality-of-life, by improving the capabilities of the infrastructure (less waste, more support for SSE activities) and the capabilities of the SSE to co-create value (an SSE activity)
– The starting game board consists of PS with a few PSS, and the goal is to see how quickly and with how little energy and with how few types and tokens of PS, the PSS can become SSE and reconstruct a high level infrastructure and high quality of life and continuously improve at a sustainable pace.
• Processes of valuing are based on the above
46 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
2011 Priorities
PRIORITY AREA
Rese
arch
Rea
din
ess
Recru
iting
Reve
nu
e
Reg
ion
s
Resp
on
sibility
Smarter Cities and Service Innovation --INTERNET OF THINGS (Instrumented, Interconnected, Intelligent)- LIVING LABS (Triple Helix Innovations, Smarter Buildings, Asset Management, CityForward.org)- QUALITY-OF-LIFE (Holistic Modeling (CityOne), STEM Education Pipeline, Jobs & Entrepreneurship)
Cloud Computing & Analytics- BIG DATA (High Performance Computing, Grand Challenges, Boost University Rankings)- SHARED SERVICE (IBM Cloud Academy, IBM Academic Cloud, VCL)- DEEP-QA (Analytics Skills, Watson technology, Massive Analytics, Stream Computing)
Growth Markets- REGIONAL INNOVATION ECOSYSTEMS (Smarter City Challenge, Universities as Living Labs)- TANDEM AWARDS (connect developed & emerging Twin Towns & Sister Cities to Boost Quality)- ACCELERATING INNOVATION (Bi-Directional Learning’ To Be The Best Learn From The Rest)
IBM on Campus-- ON CAMPUS IBMERS (Checklist for University Relationship Maturity Audit)-- IBM CENTERS (CAS, IIE, University Delivery Centers, Research Collaboratories, etc.)-- ALIGNMENT (IBM Cloud Academy, City Shared Service, Smarter City Challenge, etc.)
Events & Ecosystem Alignment- BIG EVENTS (Centennial, Watson, etc.)- EXTERNAL STAKEHOLDERS (Professional Associations, National Academies, Science Foundation)- INTERNAL STAKEHOLDERS (S&D, GBS, GTS, STG, SWG, HR, CC&CA, IDR, VC, etc.)
Awards Programs- CLASSICS: Shared University Research, Open Collaborative Research, Faculty, PhD Fellowships- SPECIALS: Special Award Programs, Named Awards, Smarter Planet Curriculum Awards- LEVERAGE: Leverage IBM CCC&A with government, foundation, and other external award programs
47 © 2011IBM CorporationIBM University Programs World Wide (IBM UP)
What We Do: The “6 R’s” (not to be confused with 3 R’s)
1. ResearchAwards focus on grand challenge problems and big bets
https://www.ibm.com/developerworks/university/research
2. ReadinessAccess to IBM tools, methods, and course materials to develop skills
https://www.ibm.com/developerworks/university/academicinitiative
3. RecruitingInternships and full-time positions working to build a smarter planet
http://www.ibm.com/jobs
4. RevenuePublic-private partnerships build great universities and strengthen regions
http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html
5. RegionsRegional innovation ecosystems – incubators, entrepreneurship, jobs
http://www.ibm.com/ibm/governmentalprograms/innovissue.html
6. ResponsibilityCommunity service provides access to expertise/resources
http://www.ibm.com/ibm/ibmgives/
48 © 2011IBM CorporationIBM University Programs World Wide (IBM UP)
● Co-investing to improve capabilities of individuals & institutions.
● Realizing profitable & sustainable improvements.
● Smarter cities/regions improve quality-of-life (for all of us!)
Where We Focus: People and Planet
Research
Recruiting Skills
People
Individuals & Disciplines
Government
Industry Academia
Planet
Institutions & Systems
Talent Infrastructure
49 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)49
Vision for the Educational Continuum: Individuals & Institutions Learning
Any Device Learning
TECHNOLOGY IMMERSION
PERSONAL LEARNING PATHS
Student-Centered Processes
KNOWLEDGE SKILLS
Learning Communities
GLOBAL INTEGRATION
Services Specialization
ECONOMIC ALIGNMENT
Systemic View of Education
Intelligent• Aligned Data• Outcomes Insight
Instrumented• Student-centric• Integrated Assessment
Interconnected• Shared Services• Interoperable Processes
ContinuingEducation
HigherEducation
SecondarySchool
PrimarySchool
WorkforceSkills
Individuals Learning Continuum TheEducationalContinuum
Institutio
ns Learn
ing Contin
uum
EconomicSustainability
http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html
50 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Priority 1: Urban Sustainability & Service Innovation Centers
A. Research: Holistic Modeling & Analytics of Service SystemsModeling and simulating cities will push state-of-the-art capabilities for planning interventions in
complex system of service systems
Includes maturity models of cities, their analytics capabilities, and city-university interactions
Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system
Real-world data and advanced analytic tools are increasingly available
B. Education: STEM (Science Tech Engineering Math) Pipeline & LLLCity simulation and intervention planning tools can engage high school students and build STEM
skills of the human-made world (service systems)
Role-playing games can prepare students for real-world projects
LLL = Life Long Learning
C. Entrepreneurship: Job CreationCity modeling and intervention planning tools can engage university
students and build entrepreneurial skills
Grand challenge competitions can lead to new enterprises
51 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Universities as Holistic Service Systems: All the systems
A. Flow of things1. Transportation: Traffic congestion; parking shortages.
2. Water: Access costs; reduce waste
3. Food: Safety; reduce waste.
4. Energy: Access costs; reduce waste
5. Information: Cost of keeping up best practices.B. Human activity & development
6. Buildings: Housing shortages; Inefficient buildings
7. Retail: Access and boundaries. Marketing.
8. Banking: Endowment growth; Cost controls
9. Healthcare: Pandemic threat. Operations.
10. Education: Cost of keeping up best practices..C. Governing
11. Cities: Town & gown relationship.
12. States: Development partnerships..
13. Nations: Compliance and alignment.
52 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
University: The Heart of Regional Innovation Ecosystems
$
Cities & Public Safety
Government Service to Individuals & Institutions
Education
Transportation
Energy
ICT (Computing & Communications)
Retail & Hospitality
Food & Products
Health
Building
Finance
University:
The Heart of
Regional Innovation
Ecosystems
School ofPublic Policy
School ofEngineering
School ofBusinessMngmnt
School ofMedicine
School ofEducation
School ofArchitecture
School ofUrban
Planning
School ofHospitality
School ofInformation
School ofScience &
Arts
University:The Heart of
Regional InnovationEcosystems
Incubator& Start-Ups
53 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Job Roles: University Research and Education
1. Model Systems
2. Connect/capture Data
3. Integrate, Analyze
4. Improve, Automate
5. Optimize, Evolve
• Water Supply
• Transportation
• Energy, Electric Grid
• Cities, Buildings
• Healthcare
• Education/Government
General
Methods
& Techniques
Specific
Technology
Run Transform Innovate
SP Service
Systems
1.Synapsense, SensorTronics
2. Infosphere Streams, ILOG, COGNOS
3.WS, Tivoli, Rational, DB2, etc.
4.BAO, Green Sigma
Specialists
Consultant
Project Manager
Sales Architect
Cross Industry
Skills
Industry Specific
Skills
Job
Roles
Systems Engineering/Analytics/BAO/SSME
University Research fuels
54 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Job Roles: IBM Building Smarter Enterprises & A Smarter Planethttps://jobs3.netmedia1.com/cp/find.ibm.jobs/location/
1. Consultant(trusted advisor to customer)
- a value proposition to addressproblems or opportunities and
enhance value co-creationrelationships
2. Sales- a signed contract that
defines work, outcomes, solution,rewards and risks
for all parties
4. Project Manager(often with co-PM from customer side)
a detailed project plan thatbalances time, costs, skills availability,
and other resources, as well asadaptive realization of plan
3. Architect(systems engineer, IT & enterprise architect)
-An elegant solution design that satisfiesfunctional and non-functional
constraints across thesystem life-cycle
5. Specialists(systems engineer, Research, engineer,
Industry specialist, application, technician, data, analyst, professional, agent)
-a compelling working system(leading-edge prototype systems
from Research)
~10%
~10% ~5%
~5%
~45%
6. Enterprise OperationsAdministrative Services, Other, Marketing & Communications
Finance, Supply Chain, Manufacturing, Human Resources, Legal,
General Executive Management
~25%
IBM Employees1. ~10% Consultant2. ~10% Sales3. ~5% Architect4. ~5% Project Manager5. ~45% Specialists6. ~25% Enterprise Operations
Project Mix From 90-10 to 80-20:B2B – Business to BusinessB2G – Business to Government
55 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
US National Academy of Engineering Grand ChallengesA. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
Restore and enhance urban infrastructure
2. Water & Waste/Climate & Green tech
Provide access to clear water
3. Food & Products
Manager nitrogen cycle
4. Energy & Electricity
Make solar energy economical
Provide energy from fusion
Develop carbon sequestration methods
5. Information & Communication Technology
Enhance virtual reality
Secure cyberspace
Reverse engineer the brain
B. Systems that focus on human activity & development6. Buildings & Construction (smart spaces)
Restore and enhance urban infrastructure
7. Retail & Hospitality/Media & Entertainment (tourism)
Enhance virtual reality
8. Banking & Finance/Business & Consulting
9. Healthcare & Family Life
Advance health informatics
Engineer better medicines
Reverse engineer the brain
10. Education & Work Life/Jobs & Entrepreneurship
Advance personalized learning
Engineer the tools of scientific discovery
C. Systems that focus on human governance11. City & Security
Restore and improve urban infrastructure
Secure cyberspace
Prevent nuclear terror
12. State/Region & Development
13. Nation & Rights
56 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Our ambition is to reach K-12 students with Service Science & STEM: “The systems we live in, and the systems we are…”
“Imagine smarter systems, explain why better (service systems & STEM language)”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
57 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Students for a Smarter Planet
YouTube - animated!!– http://www.youtube.com/watch?
v=P7bEyPrtFHM
and another– http://www.youtube.com/watch?v=WklJujtIip4
Tweet comments to…– @wendywolfie
Continuously Improving Product-Service Systems = Smarter Systems
– Simplify the message
– Provide advanced organizers
58 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Proposed Guidelines
Please send feedback to Wendy Murphy
Help us devise better ways to visualize scope of service science
For use with:– Students– Faculty– Practitioners– Policy-makers– Scientists & Engineers– Government officials
59 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Corning: A Day Made of Glass (Our Homes)http://www.youtube.com/watch?v=6Cf7IL_eZ38
60 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Complex Buildings: Luxury Hotelshttp://www.youtube.com/watch?v=Hm7MeZlS5fo
61 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Complex Buildings: Urban University Campus
“When we combined the impact of Harvard’s direct spending on payroll, purchasing and construction – the indirect impact of University spending – and the direct and indirect impact of off-campus spending by Harvard students – we can estimate that Harvard directly and indirectly accounted for nearly $4.8 billion in economic activity in the Boston area in fiscal year 2008, and more than 44,000 jobs.”
62 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
UNIVERSITIES:Research Centers & Real-World Systems
CITIES/METRO REGIONS:Universities Key to Long-Term Economic Development
U-BEEs: University-Based Entrepreneurial Ecosystems Universities as “Living Labs” for Host Cities
63 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
University-Based Entrepreneurial Ecosystems (U-BEEs)
Do you know that (from NCET2):
More than three quarters of post-1995 increase in productivity growth could be traced to science investments [D. W. Jorgenson, M. S. Ho, K. J. Stiroh, J. Econ. Perspect. 22, 3 (2008)]
1/3 of SBIRs reported involvement with a university including founder was a former academic, faculty were consultants, universities were subcontractors, or graduate students were employed
20 year returns for Early/Seed VCs was 20.6%, compared to 13.8% for Later Stage VCs and 8.2% for the S&P 500
8 percent of all university startups go public, in comparison to a "going public rate" of only 0.07 percent for other U.S. enterprises - a 114x difference
over 400 university startups are created nationally each year based on federally funded R&D, which included Google, Netscape, Genentech, Lycos, Sun Microsystems, Silicon Graphics, and Cisco Systems
Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less
68% of university startups created between 1980 to 2000 remained in business in 2001, while regular startups experienced a 90% failure rate during that same time period
64 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
A. Flow of things1. Transportation: Traffic congestion; accidents and injury
2. Water: Access to clean water; waste disposal costs
3. Food: Safety of food supply; toxins in toys, products, etc.
4. Energy: Energy shortage, pollution
5. Information: Equitable access to info and comm resourcesB. Human activity & development
6. Buildings: Inefficient buildings, environmental stress (noise, etc.)
7. Retail: Access to recreational resources
8. Banking: Boom and bust business cycles, investment bubbles
9. Healthcare: Pandemic threats; cost of healthcare
10. Education: High school drop out rate; cost of educationC. Governing
11. Cities: Security and tax burden
12. States: Infrastructure maintenance and tax burden
13. Nations: Justice system overburdened and tax burden
Complex Buildings: Modern Cities
Example: Singapore
65 © 2011IBM CorporationIBM University Programs World Wide (IBM UP)
Universities Are Mini-Cities: A Complex System of Systems
Universities can be the innovation centers for Smarter Cities (U-BEE)University-Based Entrepreneurial Ecosystems
Cities can be living labs for University research
Universities produce the skilled workforce for cities.
Universities are among the largest employers (top 10) in a city.
Universities faculty, deans, provosts, presidents are often well connected & influential in city governments.
IBM and Tulane University Usher in a New Era for Smarter Buildings in New Orleans
http://www-03.ibm.com/press/us/en/pressrelease/34694.wss
As the largest private employer in the City of New Orleans, Tulane University has made significant advances in rebuilding in more environmentally sustainable ways both the community at large and its campus
The IBM project is helping to transform the home of Tulane's School of Architecture, the century-old Richardson Memorial Hall, into a "smarter building living laboratory," using IBM Intelligent Building Management while maintaining respect for its historic status
66
Universities connect innovation flows between Regions (“High Speed Bus”)
World as System of SystemsWorld (light blue - largest)Nations (green - large)States (dark blue - medium)Cities (yellow - small)Universities (red - smallest)
Cities as System of Systems-Transportation & Supply Chain-Water & Waste Recycling-Food & Products ((Nano)-Energy & Electricity-Information/ICT & Cloud (Info)-Buildings & Construction-Retail & Hospitality/Media & Entertainment-Banking & Finance-Healthcare & Family (Bio)-Education & Professions (Cogno)-Government (City, State, Nation)
Nations: Innovation Opportunities- GDP/Capita (level and growth rate)- Energy/Capita (fossil and renewable)
Developed MarketNations
(> $20K GDP/Capita)
Emerging MarketNations
(< $20K GDP/Capita)
IBM UP WW: Tandem Awards: Increasing university linkages (knowledge exchange interactions)
67
University Trend: Shift to e-Learning and IC U-BEEs
University sub-systemsDisciplines in Schools (circles)Innovation Centers (squares)
E.g., CMU Website (2009)“Research Centers:where it all happens – to solve real-world problems”
Disciplines in SchoolsAward degreesSingle-discipline focusResearch discipline problemsMore e-Learning
Innovation Centers (ICs)Industry/government sponsorsMulti-disciplinary teamsResearch real-world systemsU-BEEs:University-Based Entrepreneurial Ecosystems
D
D
D
D
D
D
Engine
ering
Schoo
l
Social
Scie
nces
,
Human
ities
Professional
Studies
Business School
water & waste transportation
health energy/grid
e-government
Science &
Mathem
atics
I-School
Design
food & supply chain
68 © 2011 IBM CorporationIBM University Programs Worldwide (IBM UP)
Urban-Age.Net
Currently, the world’s top 30 cities generate 80% of the world’s wealth.The Urban Age
For the first time in history more than 50% the earth’s population live in cities - by 2050 it will be 75%The Endless City
69 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Questions leaders of every nation, state, city, etc. ask
How to create more and better jobs (meaningful activities) for citizens?– higher skill & higher pay– higher participation rate, opportunities for ALL people
How to shift work towards high-skill, high-value activities? – away from low-skill, low-value routine physical, mental, interactional activities– toward high-value innovation (inventing best-practices, often from new ventures)– toward high-value transformation (implementing best-practices)– toward operations, maintenance, and incident-planning for modern infrastructure
How to invest in progress?– continuously improve infrastructure, talent, and ability to invest wisely– “true value of automation cannot be assessed until we know where people land”
• Upward spiral or downward spiral? (e.g., “Robot Nation”)
How to improve quality-of-life?– sustainably, with less environmental impact, more recycling and less imports– equal access to opportunity & justice, generation after generation, for the long-run
70 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Overview: Elements of Interest
Infrastructure & Environment(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life & Demographics(Careers)
Policies & InvestmentsRun-Transform-Innovate
Governance
Infrastructure(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life Demographics(Careers)
Infrastructure(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life Demographics(Careers)
Infrastructure(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life Demographics(Careers)
Infrastructure(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life Demographics(Careers)
Infrastructure(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life Demographics(Careers)
Infrastructure(Technologies Deployed)
Individuals &Certified
Competences(Skills)
Institutions &Roles(Jobs)
Information, Quality-of-Life Demographics(Careers)
Region 1 Region 2
Futur
eP
resent
Histor
y
Policies & InvestmentsRun-Transform-Innovate
Governance
Policies & InvestmentsRun-Transform-Innovate
Governance
Policies & InvestmentsRun-Transform-Innovate
Governance
Policies & InvestmentsRun-Transform-Innovate
Governance
FrameworksTheoriesModels
Sept 27th Workshop at IBM Almaden
71 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
How are advanced technologies changing the mix of 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
72 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
What are the benefits of more education? Of higher skills?
…But it can be costly, American student loan debt is over $900M
73 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
What are the benefits of top-ranked universities?% WW GDP and % WW Top-500-Universities
Japan
ChinaGermany
France
United KingdomItaly
Russia SpainBrazilCanada
IndiaMexico AustraliaSouth Korea
NetherlandsTurkey
Sweden
y = 0,7489x + 0,3534R² = 0,719
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6 7 8 9
% g
loba
l G
DP
% top 500 universities
Strong Correlation (2009 Data): National GDP and University Rankingshttp://www.upload-it.fr/files/1513639149/graph.html
74 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
The New Normal: Smarter Systems
Computational System
Smarter TechnologyRequires investment roadmap
Service Systems: Stakeholders & Resources
1. People 2. Technology3. Shared Information4. Organizations
connected by win-win value propositions
Smarter Buildings, Universities, CitiesRequires investment roadmap
75 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Communication$ 3.96 Tn
Transportation$ 6.95 Tn
Leisure / Recreation / Clothing
$ 7.80 Tn
Healthcare$ 4.27 Tn
Food$ 4.89 Tn
Infrastructure$ 12.54 Tn
Govt. & Safety$ 5.21 Tn
Finance$ 4.58 Tn
Electricity$ 2.94 Tn
Education$ 1.36 Tn
Water$ 0.13 Tn
Global system-of-systems$54 Trillion
(100% of WW 2008 GDP)
Same IndustryBusiness SupportIT SystemsEnergy ResourcesMachineryMaterials Trade
Legend for system inputsNote:1. Size of bubbles represents
systems’ economic values2. Arrows represent the strength of
systems’ interaction
Source: IBV analysis based on OECD
Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis)
This chart shows ‘systems‘ (not ‘industries‘)
Our planet is a complex system-of-systems
1 Tn
76 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated
Global economic value of
System-of-systems
$54 Trillion100% of WW 2008 GDP
Inefficiencies$15 Trillion28% of WW 2008 GDP
Improvement potential
$4 Trillion7% of WW 2008 GDP
How to read the chart:
For example, the Healthcare system‘s value is $4,270B. It carries an estimated inefficiency of 42%. From that level of 42% inefficiency, economists estimate that ~34% can be eliminated (= 34% x 42%).
We now have the capabilities to manage a system-of-systems planet
Source: IBM economists survey 2009; n= 480
System inefficiency as % of total economic value
Impr
ovem
ent
pote
ntia
l as
% o
f sy
stem
inef
ficie
ncy
Education1,360
Building & Transport Infrastructure
12,540
Healthcare4,270
Government & Safety5,210
Electricity2,940
Financial4,580
Food & Water4,890
Transportation (Goods & Passenger)
6,950
Leisure / Recreation /
Clothing7,800
Communication3,960
Analysis of inefficiencies in the planet‘s system-of-systems
Note: Size of the bubble indicate absolute value of the system in USD Billions
42%
34%
This chart shows ‘systems‘ (not ‘industries‘)
15%
20%
25%
30%
35%
40%
15% 20% 25% 30% 35% 40% 45%
77 © 2011 IBM CorporationIBM UPower (University Programs & open worldwide entrepreneurship research)
Measuring Impact
SSME: IBM Icon of Progress & IBM Research Outstanding Accomplishment– Internal 10x return: CBM, IDG, SDM Pricing & Costing, BIW COBRA, SIMPLE, IoFT, Fringe, VCR
• Key was tools to model customers & IBM better• Also tools to shift routine physical, mental, interactional & identify synergistic new ventures• Alignment with Smarter Planet & Analytics (instrumented, interconnected, intelligent)• Alignment with Smarter Cities, Smarter Campus, Smarter Buildings (Holistic Service Systems)
– External: More than $1B in national investments in Service Innovation activities
– External: Increase conferences, journals, and publications
– External: Service Science SIGs in Professional Associations
– External: Course & Program Guidelines for T-shaped Professionals, 500+ institutions
– External: National Service Science Institutions, Books & Case Studies (Open Services Innovation)
Service Research, a Portfolio Approach– 1. Improve existing offerings (value propositions that can move the needle on KPI’s)
– 2. Create new offerings (for old and new customers)
– 3. Improve outcomes insourcing, outsourcing, acquisitions, divestitures (interconnect-fission-fusion)
– 4. For all three of the above, improve customer/partner capabilities (ratchet each other up)
– 5. For all four of the above, increase patents and service IP assets (some donated to open forums)
– 6. For all five of the above, increase publications and body-of-knowledge (professional associations)
78 © 2010 IBM CorporationGlobal University Programs
Who I am
Director IBM Global University Programs since 2009– Global team works with 5000 university world wide (http://www.ibm.com/university)
– Research (Awards), Readiness (Skills), Recruiting, Revenue, Responsibility
– Transform “IBM on Campus” brand awareness (“Smarter Planet/Smarter Cities”)
– Create “Urban Service System” Research Centers & U-BEEs Founding Director of IBM's first Service Research group from 2003-2009
– Almaden Research Center, San Jose, CA
– 10x ROI with four IBM outstanding and eleven accomplishment awards
– Improve existing offerings, create new, portfolio synergies, partners, patents, publications
– I know/work with service research pioneers from many academic disciplines• I advocate for Service Science, Management, Engineering, and Design (SSME+D)
– Short-term: Curriculum (T-shaped people, deep in an existing discipline)– Long-term: New transdiscipline and profession (awaiting CAD tool)
• I advocate for SRII (“one of the founding fathers”)• Co-editor of the “Handbook of Service Science” (Springer 2010)
Other background (late 90’s and before)– Founding CTO of IBM’s Venture Capital Relations group in Silicon Valley
– Apple Computer’s (Distinguished Engineer Scientist and Technologist) award (90’s)
– Ph.D. Computer Science/Artificial Intelligence from Yale University (80’s)
– B.S. in Physics from MIT (70’s)