Your SlideShare is downloading. ×
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
servicisation and digital convergence 2011
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

servicisation and digital convergence 2011

1,699

Published on

seminar presentation in the 2011 Service Innovation series of MIoIR (MBS) MSc course

seminar presentation in the 2011 Service Innovation series of MIoIR (MBS) MSc course

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,699
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
79
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Manchester Institute of Innovation Research
    Innovation and Convergence: Digital Convergence and Servicisation
    Ian Miles
    Ian.Miles@mbs.ac.uk
    IME service innovation seminar 8
  • 2. Two developments requiring new strategies and capabilities
    Servicisation
    Digital Convergence
    Manchester Institute of Innovation Research
  • 3. Manchester Institute of Innovation Research
    Servicisation
  • 4. Sectoral convergence
    • Similar technology
    • 5. White collar workforce
    • 6. Customer orientation
    • 7. Customisation
    • 8. Many ways in which manufacturing and services look more alike
    • 9. Services become “productised”, other sectors “servicised”.
    Manchester Institute of Innovation Research
  • 10. Productisation of services
    ..either the evolution of a service to include a product
    or a service that becomes standardised to a degree where it is marketed as a product.
    For example in logistics, transport contracts can be so well defined that they turn into a service that is effectively sold as a product. www..productserviceinnovation.com
    Manchester Institute of Innovation Research
  • 11. Manchester Institute of Innovation Research
    From Baines, Lightfoot, Benedettiniand Kay (2009): Journal of manufacturing technology management, Vol 20 No 5 2009.
    Servicisation:
    The increasing emphasis on service outputs from manufacturing and other non-service firms
  • 12. Some very different aspects
    Embedded services
    Product services: complementary to the goods; aiding users; adding more value; support services, KIBS
    Servitising goods: not rental
    Process services: selling business processes
    Software, comms, content [e.g. Kindle]
    Aftersales, software sales, systems integration and management
    Pay for service, not good
    Testing, production, comms, marketing
    Manchester Institute of Innovation Research
  • 13. Why servicise?
    Manchester Institute of Innovation Research
    The annual volume of new equipment sales compared with the size of the installed base in selected capital goods sectors (ie one car is sold for every 13 on the road).
  • 14. Some cases:
    Manchester Institute of Innovation Research
    T.S. Baines, H.W. Lightfoot, O. Benedettini, J.M. Kay, (2009) "The servitization of manufacturing: A review of literature and reflection on future challenges", Journal of Manufacturing Technology Management, Vol. 20 Iss: 5, pp.547 - 567
  • 15. How is it done?
    Andy Neely, Cambridge, sees 3 strategies:
    Product-focused strategies seek to capture information regarding product usage and then integrate any relevant findings so they influence the design of the next generation of products - for example maintenance processes, functionality upgrades
    Service-focused strategies seek to address broader customer expectations concerning for example, service availability, co-location of service engineers, customer equipment training, speed and quality of response to specific enquiries
    Value chain-focused strategies seek to provide integrated service solutions (such as acting as prime contractor) so that, in effect, the supplier firm takes over some part of the customer's operation
    Another approach
    Manchester Institute of Innovation Research
  • 16. “Product” Life Cycle
    Manchester Institute of Innovation Research
    Design
    Manufacture
    Delivery
    Usage
    Support
    End-of-use
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 17. “Product”-service relations: conventional manufacturing
    Manchester Institute of Innovation Research
    Design Manufacture Delivery Usage Support End-of-use
    Supplier
    Customer
    Interaction: mainly transactional.
    Some product support
    Some peripheral services
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 18. “Product”-service relations: more service
    Manchester Institute of Innovation Research
    Design Manufacture Delivery Usage Support End-of-use
    Product + service delivery
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 19. “Product”-service relations: more service customisation
    Manchester Institute of Innovation Research
    Design Manufacture Delivery Usage Support End-of-use
    Customisation of product and service
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 20. “Product”-service relations: more service customisation
    Manchester Institute of Innovation Research
    Design Manufacture Delivery Usage Support End-of-use
    Product & service codesigned: total solutions
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 21. “Product”-service relations: not a linear model/stages theory
    Manchester Institute of Innovation Research
    Design Manufacture Delivery Usage Support End-of-use
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 22. “Product”-service relations: not a linear model/stages theory
    Manchester Institute of Innovation Research
    Design Manufacture Delivery Usage Support End-of-use
    Veronica Martinez, Marko Bastl, Jennifer Kingston, Stephen Evans, (2010) "Challenges in transforming manufacturing organisations into product-service providers", Journal of Manufacturing Technology Management, Vol. 21 Iss: 4, pp.449 - 469
  • 23. Large-scale analysis is rare
    Manchester Institute of Innovation Research
    An exception: Andy Neely ‘The Servitization of Manufacturing: An Analysis of Global Trends’
    • Data from OSIRIS [44,000 listed companies from around the world].
    • 24. Companies with primary or secondary US SIC codes in the range 10-39 inclusive, extractive & manufacturing, and over 100 employees [n=12,521].
    1.Pure manufacturing
    PetroChina principally engaged in a broad range of petroleum & natural gas-related activities.
    2.Some combination of manufacturing & service
    Siemens -predominantly electronics & electrical engineering, but provides wide variety of consulting, maintenance & other services.
    3.Pure service
    The Brink's Company: security industry firm - services offered include armoured-car transportation, automated teller machine (ATM) servicing, currency & deposit processing, coin sorting & wrapping, & arranging secure air transportation of valuables.
    Three models
  • 25. Neely cases
    Manchester Institute of Innovation Research
  • 26. Main services offered
    Manchester Institute of Innovation Research
  • 27. Some trend data
    Manchester Institute of Innovation Research
    LAY, G. 2007. ‘Towards a Comprehensive Innovation Strategy’. Quality Congress. Istanbul: Fraunhofer Institute for Systems and Innovation
    Research ISI, Karlsruhe
  • 28. Servicisation is revenue model innovation; but can affect innovation more generally
    Knowledge about customers, product use, product failures and problems
    Reallocation of costs changes logic about product maintenance:
    Affects product design
    Scope for innovation in monitoring and maintenance
    New service innovation
    Manchester Institute of Innovation Research
  • 29. Environmental argument
    Services = less environmental impact (?)
    Swedish PhD study , firm (and user) interviews: Oksana Mont (2004) Product-service systems: Panacea or myth? Lund University, The International Institute for Industrial Environmental Economics
    Manchester Institute of Innovation Research
    Drivers:
    Some general factors, but also market issues vary considerably across sectors; coercive market includes consumers and regulations
    Barriers:
    Limited regulatory drivers; high costs of labour; need for better awareness on part of consumers and intermediaries (and own staff) – long learning time; credibility/demonstrability to users; diminished user responsibility; possible internal conflicts (2nd hand vs new), etc.
  • 30. Challenges for servicisers
    Different management and customer relations required
    May need understanding of new markets, and evaluation of potential of new service offering
    May require thorough reorientation of sales workforce
    New capabilities – separate organisation?
    Manchester Institute of Innovation Research
  • 31. Exercise!
    You work for a firm that makes high-value consumer products. (cosmetics, jewellry, babyfood, petfood....)
    There is a potentially disruptive technology emerging which will allow consumers to make the final products at home, easily, and for much less money.
    This is attracting a great deal of media attention, and public response to the new offering looks positive.
    What do you do?
    Manchester Institute of Innovation Research
  • 32. Some options
    We rule out suppressing or banning the technology! (Though you could try dark propaganda against it...)
    We do not rule out your doing deals with the supplier.
    We do not rule out your downsizing, but you must try to remain sustainably profitable.
    Could you go upmarket?
    Can you complement your product with other tangible elements, or with new services?
    Can you move away from the original product, and focus on ancillary goods and services that sill appeal to consumers (and maybe give you advantage with the new technology)?
    Can you do other things with your skills, plant and equipment?
    Can you think of other options?
    Manchester Institute of Innovation Research
  • 33. The task
    Decide on your product and on the strategy/ies you will pursue. (5 mins+15 mins.)
    Consider what capabilities you will require to implement this:
    Types of Knowledge
    Workforce skills
    Alliances
    Etc (30 minutes)
    Decide on what the most urgent of these are, and how you will address them. (10 mins)
    Manchester Institute of Innovation Research
  • 34. Manchester Institute of Innovation Research
    Digital Convergence
    Convergence
    What is digital convergence?
    Digital convergence and innovation
    Who does this affect?
    How does it affect media, IT industries, other sectors…
  • 35. 3 sorts of convergence
    Manchester Institute of Innovation Research
    Disruptive innovation challenges, PLUS need to master new technologies.
    “Both market and technology-driven convergence tendencies along the value chain ...eventually imply entire industries to converge in the long term. ...the decision to integrate competences and technologies from external sources does not necessarily come as a strategic choice... Rather required to avoid negative effects of emerging shakeouts.”
  • 36. Technology-driven case
    Manchester Institute of Innovation Research
  • 37. Manchester Institute of Innovation Research
    Convergence
    For some decades commentators have addressed computer/ telecommunications “convergence” – or collision
    Held by many to be a defining feature of new IT, e.g. Kobiyashi “IT=C&C”… and related to common underlying technologies (microprocessors, digitalisation)
    But more industries and activities “converge” than just data processing and communication
  • 38. Manchester Institute of Innovation Research
    Digital Convergence
    Historically, distinct industries dealt with print, recorded music, images, other media, telecomms, broadcasting, computer hardware, software
  • 39. Manchester Institute of Innovation Research
    Digitalisation
    Analogue     Digital
    Publishing, broadcasting, etc
    Text
    Photography
    Moving Images
    Sound
    Instruments
    • Doc. Processing
    • 40. Digital cameras
    • 41. “ ”, projection, TVs, DVDs etc.
    • 42. DT, CD, MP3....
    • 43. Digital display, measurement
    (printing)
    (photochemistry)
    (phonography, electronics…)
    (mechanical, electromechanical)
    New storage devices and displays – ebooks, CDs, MP3/4 players, etc; Web publishing
  • 44. Manchester Institute of Innovation Research
    Digital Convergence
    Distinct industries have dealt with hardware, software, telecommunications, broadcasting, print and other media
    They have varying assets, capabilities and types of content - and regulatory and IP systems
    But now they have increasingly shared underlying technologies (microelectronics, optronics, software)
    All types of data and information potentially captured, processed, communicated, stored, displayed digitally via new IT
  • 45. Manchester Institute of Innovation Research
    Three Uses of Information
  • 46. Manchester Institute of Innovation Research
    Three Sorts of Industry
    (Tele)communications
    Publishing Media
    Computation
  • 47. Manchester Institute of Innovation Research
    Traditional Features
    (Tele)communications
    1 to 1
    PROCESSING
    COMMUNICATION
    INTERACTION
    CONTENT
    1 to many
    (Broadcast Media)
    Early Online Media
    Publishing Media
    Computation
  • 48. Manchester Institute of Innovation Research
    A Growing Market Space…
  • 49. … Within which the offerings of established industries expand
    Manchester Institute of Innovation Research
    ==
    ======Increasing
    ===proliferation of
    ======= products
  • 50. Manchester Institute of Innovation Research
    The Expanding Media Universe
    Time
    Communications
    Computation
    Content
    The three “trumpet” shapes represent telecommunications, computer, and broadcast & print media fields.
    Over time the product space to which they contribute, and its market size, expands, and the three fields overlap increasingly.
  • 51. Manchester Institute of Innovation Research
    Early Industrial Society
    COMPUTATION
    (TELE) COMMUNICATIONS
    Mechanical information processing: very limited till C20th - punch cards, calculators
    Paper-based communication: Stationery, Post.
    C19th - telephone, telegraph
    All (but telecomms) based on PHYSICAL TRANSPORT
    Paper-based information products - books, newspapers, etc + live consultation & entertainment + (later) mechanical recorded media (gramophone etc)
    INFORMATION GOODS & SERVICES
  • 52. Manchester Institute of Innovation Research
    The mid-1950s
    COMPUTERS
    TELECOMMUNICATIONS
    Very few, very large, valve-based electronic computers; Keyboard calculators
    PHYSICAL TRANSPORT plus increasing electronic delivery (telecomms, TV, radio, etc.)
    Telephone
    Telegraph
    TV (mainly monochrome)AM radio, LP records, valve amplifiers
    BROADCAST + PUBLISHED MEDIA
  • 53. Manchester Institute of Innovation Research
    The mid-1970s
    COMPUTERS
    TELECOMMUNICATIONS
    Increasing role for electronic delivery, but little integration of media
    Numerous mainframe computers
    Pocket calculators
    Telephone
    Telegraph
    Telex
    TV (colour) AM and FM transistor radio, LP records, transistor amplifiers
    BROADCAST + PUBLISHED MEDIA
  • 54. Manchester Institute of Innovation Research
    The Mid/late-1980s
    TELECOMMUNICATIONS
    COMPUTERS
    Telephone Answering Machines, Mobile phones, Pagers, Business Fax Machines
    Numerous Personal Computers, Home Computers and videogames, Electronic wristwatches
    Some integration of media, emergence of optical media, increasing digitalisation
    Electronic mail
    Bulletin boards
    Videotex
    Online databases for business & science
    Recorded information services
    Videorecorders, audio CDs, cable and satellite TV, Teletext
    BROADCAST + PUBLISHED MEDIA
  • 55. Manchester Institute of Innovation Research
    Turn of the Century
    TELECOMMUNICATIONS
    COMPUTERS
    Numerous PCs, laptops. notebooks, pocket organisers, etc. Numerous home computers and videogames
    Digital mobile phones,
    Widespread use of Fax, pagers
    Electronic mail,
    SMS
    Mobile data comms
    Increasing integration of media, use of optical media, digitalisation
    Internet
    World Wide Web
    CD-ROM publishing
    Cable telephony Audiotext
    Videorecorders, audio CDs, digital recording cable and satellite TV
    BROADCAST + PUBLISHED MEDIA
  • 56. Manchester Institute of Innovation Research
    c2010
    COMPUTERS
    TELECOMMUNICATIONS
    Pervasive computers, in many types of device (e.g. Personal Digital Assistants, smartphones)
    Internet telephone VoI, Internet videotelephony
    Digital mobile communications in wide use - pervasive communications
    WiFi, Next generation of Internet & WWW, Web2.0, Video telephones and conferences
    Internet TV Video on Demand Interactive TV
    DVD-R+, interactive video
    MP3 and PVR, Digital Broadcast TV digital videorecording High definition TV
    BROADCAST + PUBLISHED MEDIA
  • 57. Manchester Institute of Innovation Research
    Uncertainties
    Successful products/applications/triggers
    Design paradigms/platforms
    User implementation
    Emergence and take-off of markets, market structures
    Product spaces
    Capabilities and industrial structure
    Governance of content (news, porn, gambling) and property rights (intellectual property)
    Other governance issues (crime, security…)
  • 58. Manchester Institute of Innovation Research
    Regulators
    UK system change
    OFTEL (Telecommunications Act, 1984, on “deregulation”) + Cable Authority + ITC ….
    OFCOM (Communications act, 2003)
  • 59. Manchester Institute of Innovation Research
    1996?
    Broadcasting Standards Commission
    2003
    networks
    1990
    Oftel
    1984
    1991
    But not print media – Press Complaints Commission etc.
    spectrum
    Radiotelecommunications Agency
  • 60. Management of digital convergence
    Service industries in communications and media (and software) confront or create potentially disruptive challenges – e.g. To content delivery
    Manufacturers in publishing and IT face scope for new services
    Major challenge to capabilities
    Manchester Institute of Innovation Research
  • 61. Jong-SeokKim PhD Digital Covergence in South Korea
    Manchester Institute of Innovation Research
  • 62. Manchester Institute of Innovation Research
    Jong-Seok Kim: Korean mobile phone companies
    Capabilities to establish large markets for music via cellphone
    14.4k/sec
    2nd generation, digital services – earlier 1990s generation was analogue
    2.5 generation
    64k /sec
    3rd generation
    128k – 2m /sec
  • 63. Manchester Institute of Innovation Research
  • 64. Manchester Institute of Innovation Research
    SKT’s response
    The Network R&D Center’: to develop core technologies to ensure the continual advancement of the next generation network, which in time will become one of the core competencies of mobile network operators.
    The Platform Research Center: to research, develop, and operate Internet-related services, as well as to develop/grow the Financial Enabling business, which make banking
    and financial transaction possible on mobile phone. In addition, to discover new sources of growth engines by creating new businesses based on existing technological platforms. Currently the Center is carrying out R&D activities on WAPbased Platforms, M-Commerce, LBSIn the year 2004, SKT placed more emphasis on the R&D of technology. In addition, a
    A New Business Division was established, aiming at explore new growth engines. The
    New Business Division deals with the formulation of new business strategies and their
    implementation at global levels. New managerial routines were adopted to operate
    efficiently and to speed up business processes. The Chief Business Officer was
    responsible for the Business Strategy Division, Business Division, and Customer Division (the new name for the Marketing Division).
    At the same time, with the continuous introduction of new convergent services, the number of transactions with content providers was escalating. Hence, a Content Business Unit was also formed, to deal with the many issues relating to content.
    . ...while the three firms took different measures, they watched each other and worked on some common issues
  • 65. New knowledge to be acquired
    DRM and relevant systems and solutions
    New markets, their properties and evolving demands, incl. Attitudes to IP and preferences for payment
    Knowledge of competing devices
    Content providers, the existing music business
    Potential new services – ringtone, streaming, downloads, associated content and marketing
    Manchester Institute of Innovation Research
  • 66. Manchester Institute of Innovation Research
    Convergence
    Example: “smart phone” and tablets converge entertainment (games, videos, music), communications (phone, VOIP, videophone), publishing (newspaper download), and much more (cameras, health apps)… Much alliance and networking across firms to achieve success in new markets.
    Blurring industry boundaries
    New convergent services
    Much scope for innovation in new services, improved service design
    New players
    Diversification, vertical integration (?)
    Requirement for new strategies, capabilities, organisation
  • 67. Manchester Institute of Innovation Research
    Not just Media
    New categories:
    e.g. chematronics, mechatronics [watch this space for bio and nano categories]…
    Converged products:
    e.g. “smart house” converges consumer electronics, telecomms, utilities, construction
  • 68. Manchester Institute of Innovation Research
    Key Features of New Media:
    INTERACTIVITY:
    promises and realities
    differential development of applications and competences on both - user and supplier sides
    Sometimes technically demanding – sometimes “democratic”
    innovation around types of content, interfaces, delivery and “display” systems
    CONVERGENCE and COLLISON:
    digitalisation
    blurring boundaries
    new modes of delivery and use of existing (types of) content
    repurposing and repackaging of content
    New types of content (eg MMORG)
  • 69. Hacklin et al: strategic and operational issues
    Manchester Institute of Innovation Research
  • 70. Manchester Institute of Innovation Research
    Some implications
    Standard classifications of creative industries may be destabilised
    Importance of users and intermediaries, continually challenging IP systems and assumptions – not just driven by “piracy” (though this may often predominate)
    Liable to be continual dialectic between established players and newcomers, established consumption and production modes and new styles.
    Much creativity and innovation will not be managed in any recognisable way!
    But much will be, as major new markets are created and accessed.
  • 71. Manchester Institute of Innovation Research
    End of Presentation

×