Naples forum on service 20150610 v4

Boosting The Creativity and Productivity
of People in Smart Service Systems
Jim Spohrer, IBM
Director, Global University Programs (GUP) and Cognitive Systems Institute Group (CSIG)
The Naples Forum on Service - Naples, Italy, Wed June 10th, 2015
http://www.slideshare.net/spohrer/naples-forum-on-service-20150610-v4
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© IBM 2015, IBM UPward - University
Programs Worldwide accelerating regional
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Dedication: Doug Engelbart
Father of the mouse and
augmentation theory
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Explain external
phenomena

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Explain internal
phenomena

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Explain phenomena
and build better
tools and systems

Kurzweil Graph
What $1000 buys
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IBM TrueNorth Chip
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New Era of Computing:
Cognitive Technologies & Componentry
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 Natural Language
– Reasoning, Logic & Planning
– Symbolic Processing
– Natural Language Processing
– Ranking of Hypotheses
– Knowledge Representations
– Domain-Specific Ontologies
– Information Storage/Retrieval
– Machine Learning, Reasoning
– Von Neumann Componentry
– OpenPOWER Systems
 Pattern Recognition
– Recognition, Sensing & Acting
– Pattern Processing
– Image & Speech Processing
– Ranking of Hypotheses
– Pattern Representations
– Domain-Specific Neural Nets
– Information Storage/Retrieval
– Machine Learning, Perception
– Neuromorphic Componentry
– TrueNorth & Corelets Systems
AI for IA:
Intelligence
Augmentation
(Engelbart’s Visiion)
Cognitive Assistants
(“Cogs”) that boost
creativity and
productivity of people in
smart service systems.
Cognition as a Service
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IBM Cloud Bluemix

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Guardian of the Genome – P53
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What should service scientists make
of all of this kind of talk?
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Conferences
• ICSERV, July
– July 7-9, San Jose
• Frontiers, July
– July 9-12, San Jose
– Deadline Nov 20th
• AHFE HSSE, July
– July 26-30, Las Vegas
• HICSS
– January 5-8, Hawaii
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How resilient are our service systems?
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Knowledge levels can help make us
healthier, wealthier, and wiser
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Alone in the Wilderness
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Cognitive Limits of Different Types of
Service System Entities
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In Summary
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“A service science
perspective considers
the evolving ecology of
service system entities,
value co-creation and
capability co-elevation
Interactions, their
capabilities, constraints,
rights, and responsibilities.
Cognitive Systems
Entities
Service
Systems
Entities Cognitive
Assistants
Rights &
Responsibilities

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Moore’s-Like Law for
Smart Service Systems
Computational System
Smarter Technology
Requires investment roadmap
Service Systems: Stakeholders & Resources
1. People
2. Technology
3. Shared Information
4. Organizations
connected by win-win value propositions
Smarter Buildings, Universities, Cities
Requires investment roadmap

“The best way to predict the future is to inspire the
next generation of students to build it better”
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Digital Natives Transportation Water Manufacturing
Energy Construction ICT Retail
Finance Healthcare Education Government

People:
From I to T-shape and Beyond!
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© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
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Many disciplines
Many sectors
Many regions/cultures
(understanding & communications)
Deepinonesector
Deepinoneregion/culture
Deepinonediscipline

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Glossary
• Service: Value co-creation entities, interactions, and outcomes; The application of knowledge for
mutual benefits.
• Service Innovation: Scaling the benefits of new knowledge globally, rapidly, and sustainably
• Service Platform: A means of scaling the mutual benefits of new knowledge: technology (smart
phones), business model (franchise), skills (universal education), etc.
• Service system: The systems studied by service science. A dynamic configuration of people,
technology, organizations, and shared resources, connected internally and externally by value
propositions. Examples: people, families, universities, cities, states, nations, businesses, hospitals,
hotels, etc.
• Service science: The study of the evolving ecology of nested, networked service system entities –
complex systems with capabilities, constraints, rights, and responsibilities – and their interactions,
including value co-creation and capability co-elevation processes.
• Physical symbol system: The systems studied by computer science. Examples: Turing machines,
Computers.
• Cognitive systems: The systems studied by cognitive science. Cognitive system entities have 4 L
capabilities: language, learning, levels (of confidence), and limbs.
• Smart service systems: Service systems in which all the people in the systems have access to
cognitive assistants.
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More to Read & Watch
• Rapidly Rebuilding Societal Infrastructure from
Scratch
– Posted by Jim Spohrer on 14 July 2012, 11:55 am
– http://service-science.info/archives/2189
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IBM Academic Initiatives Cloud
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Technology:
Network Digital Revolution
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Cloud
Social
Internet of Things
Mobile
Cognitive Security
Analytics
Cyber-Physical Systems
Smarter Planet
Smart Service Systems Industry 4.0

History of Computing
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Cognitive Assistants for all occupations
are beginning to appear
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Brief History
of AI
1956 – Dartmouth Conference
1956 – 1981 Micro-Worlds
1981 – Japanese 5th Generation
1988 – Expert Systems Peak
1990 – AI Winter
1997 – Deep Blue
1997 – 2011 Real-World
2011 – Jeopardy! & SIRI
2013 – Cognitive Systems Institute
2014 – Watson Business Unit
2015 – “Cognition as a Service”
on IBM Bluemix
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Vision: Augment & Scale Expertise
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Cognitive Assistants - Occupations
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Biochemist/Biochemical Engineer
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Occupations = Many Tasks
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Watson Discovery Advisor
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Simonite, T. 2014. Software Mines Science Papers to Make New Discoveries. MIT. November 25, 2014.
URL: http://m.technologyreview.com/news/520461/software-mines-science-papers-to-make-new-discoveries/

User Models
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Watson Platform on BlueMix
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CSIG: Cognitive Systems Institute Group
 LinkedIn discussion
 Cognitive-Systems-Institute-6729452
 Web site for resource
sharing
 cognitive-science.info
 Bluemix
 ibm.biz/HackBluemix
 ibm.biz/LearnBluemix
 $0.07 per GB-Hour (*)
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* = check online for current pricing info

Smarter, yes
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Ken Jennings jokingly wrote: “(I for one welcome our new computer overlords)”

Smarter, Yes! But Wiser?
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Smarter Service Systems Workshop
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National Science Foundation
A feature of a service system is the
participation and cooperation of the customer
in the service and its delivery. A service system
then requires an integration of knowledge and
technologies from a range of disciplines, often
including engineering, computer science, social
science, behavioral science, and cognitive
science, paired with market knowledge to
increase its social benefit.
Nano-Bio-Info-Cogno
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ISSIP.org
Professional Development for Service Innovators
• 2015 Conferences
– HICSS, Honolulu, HI, Jan 5-8
– T Summit, E Lansing, MI, Mar 16-17
– ICSERV,San Jose, CA July 6-8
– Frontiers, San Jose, CA July 9-12
– AHFE HSSE,Las Vegas, NV July 23-27
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Professionals Associations & T-Shapes
• ISSIP
• INFORMS
• IEEE
• ACM
• AMA (Marketing)
• AIS
• POMS
• TSIA
For more complete list of 24 see: http://service-science.info/archives/1982
http://tsummit2014.org

Journals
For more see: http://service-science.info/archives/2634
Paul Maglio, Editor Mary Jo Bitner, Editor

Readings & Textbooks
See http://service-science.info/archives/2708 http://service-science.info/archives/1931

Recent Report, Funding, etc.
http://california-center-for-service-science.org/nsf-workshop/
http://www.nsf.gov/pubs/2014/nsf14610/nsf14610.htm
https://www.linkedin.com/groups/NSF-Industry-Academe-Enabling-Smart-5109582
http://web.mit.edu/mitssrc/nsf/index.html

Conferences
• HICSS (Jan Hawaii) – 1000
• AAAI (Jan Austin) – 2000
• InterConnect (Feb Las Vegas) - 3000
• Service System Symposium (Feb Tokyo) - 100
• T Summit (Mar Michigan) – 250
• CogSci (May Los Angeles) – 500
• Service System Forum (May Venice) - 200
• Naples Forum (June Naples) – 150
• ICServ (July San Jose) – 120
• Frontiers (July San Jose) – 250
• AHFE HSSE (July Las Vegas) – 3000
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Thinking About Value
• Service as value co-creation
– The application of knowledge for
mutual benefits (outcomes) when
entities interact
• Service innovations scale benefits
– Role of platforms (tech, biz, social)
• Service experience
– Expectations, Interactions, Outcomes

Basics
• Service science is the study of service systems and value-cocreation interactions
and outcomes, through the lens of a service-dominant logic (SDL) worldview
– All economic interactions are direct or indirect service interactions
– Goods are vehicles for indirect service interactions
• SDL (Vargo & Lusch) defines service as…
– the application of competence (e.g., knowledge) for the benefit of another entity
– slightly more specific, easier to understand
• Service science (Spohrer & Maglio) defines service as…
– value-cocreation interactions among service system entities
– slightly more general, harder to understand

Service Systems Thinking: ABC’s
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
B. Service Customer
• Individual
• Institution
• Public or Private
Forms of
Ownership Relationship
(B on C)
Forms of
Service Relationship
(A & B co-create value)
Forms of
Responsibility Relationship
(A on C)
Forms of
Service 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 of
competence for the benefit
of 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

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.

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Service system entities configure four types of resources
• First foundational premise of service
science:
– Service system entities dynamically
configure
four 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/
Environment
Infrastructure
4. Shared
Information/
Symbolic
Knowledge
1. People/
Individuals
3. Organizations/
Institutions
Formal service systems can contract to configure resources/apply competence
Informal 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)

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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 to
make it so)
StrategicSustainable
Innovation
(Market
share)
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 and
deliver it)
RegulatedCompliance
(Taxes and
Fines, 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)
Cost
Plus
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)
Value
Based
Quality
(Revenue)
1.Customer
Value
Proposition
Reasoning
Basic
Questions
Pricing
Decision
Measure
Impacted
Stakeholder
Perspective
(the players)
Value propositions coordinate & motivate resource access

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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-cocreation
B2B
B2C
B2G
G2C
G2B
G2G
C2C
C2B
C2G
***
provider resources
Owned Outright
Leased/Contract
Shared Access
Privileged Access
customer resources
Owned Outright
Leased/Contract
Shared 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..

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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)
WinLose
Provider
Lose Win
Customer
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)

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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 be
the best,
learn from
the rest”
“Double
monetize,
internal win
and ‘sell’ to
external”
“Try to
operate
inside
the
comfort
zone”
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.

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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.

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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.. Shared
Information
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?Cost
Plus
Productivity2.Provider
Model of customer:
Do customers want
it?
Should we?Value
Based
Quality1.Customer
ReasoningQuestionsPricingMeasure
Impacted
Stakeholder
Perspective
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

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Learning More
About 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
• More Textbooks:
http://service-science.info/archives/1931
Reaching the Goal:
How Managers Improve
a Services Business
Using Goldratt’s
Theory of Constraints
By John Ricketts, IBM
Service Management:
Operations, Strategy,
and Information
Technology
By Fitzsimmons and
Fitzsimmons, UTexas
Service Is Front Stage:
Positioning services for
value advantage
By James Teboul, INSEAD

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Service Innovators
• ISSIP = International
Society of
Service Innovation
Professionals
• T-shaped Professionals
– Depth
– Breadth
• Register at:
– ISSIP.org

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IBM operates in 170 countries
around the globe
Acquisitions contribute significantly
to IBM’s growth ; ~120 acquisitions in
last decade
Number 1 in patent
generation for more
than two decades
More than 40% of IBMs
workforce does
business away from an
office
5 Nobel Laureates10 time winner of the
President’s National
Medal of Technology &
Innovation – latest for
LASIK laser refractive
surgical techniques
The Smartest Machine On Earth
100 Years of Business &
Innovation in 2011
New Era in IBM’s Leadership
IBM Growth Initiatives
IBM has
~400,000
employees
worldwide

Jim Spohrer, IBM
• Dr. James (“Jim”) C. Spohrer is Director IBM Global University
Programs and leads IBM’s Cognitive Systems Institute. The
Cognitive Systems Institute works to align cognitive systems
researchers in academics, government, and industry globally to
improve productivity and creativity of problem-solving
professionals, transforming learning, discovery, and sustainable
development. IBM University Programs works to align IBM and
universities globally for innovation amplification and T-shaped
skills. Jim co-founded IBM’s first Service Research group, ISSIP
Service Science community, and was founding CTO of IBM’s
Venture Capital Relations Group in Silicon Valley. He was awarded
Apple Computers’ Distinguished Engineer Scientist and
Technology title for his work on next generation learning
platforms. Jim has a Yale PhD in Computer Science/Artificial
Intelligence and MIT BS in Physics. His research priorities include
service science, cognitive systems for smart holistic service
systems, especially universities and cities. With over ninety
publications and nine patents, he is also a PICMET Fellow and a
winner of the S-D Logic award.
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Professional Roles
• Director Global University Programs and Cognitive Systems Institute (2014 - )
– http://cognitive-science.info
– Cognitive Assistants for all occupations in smart service systems
• Director IBM Global University Programs (2009 – 2014)
– http://www.ibm.com/university
– 6 R’s - research, readiness, recruiting, revenue, responsibility, regions)
– Universities as “smarter service systems” and startup engines of their regions
• Founding Director of IBM’s first Service Research group (2003 - 2009)
– http://www.service-science.info
– Service Science (short for Service Science Management Engineering Design Arts Public Policy)
– http://www.issip.org
– International Society of Service Innovation Professionals (ISSIP)
• Founding CTO of IBM’s Venture Capital Relations Group (1999-2002)
• Apple Computer’s (Distinguished Engineer Scientist and Technologist) award (90’s)
• Student: Ph.D. Computer Science/Artificial Intelligence from Yale University (80’s)
• Researcher: Dialogue Systems/VERBEX – Speech Recognition Startup (1978-1982)
• Student: B.S. in Physics from MIT (1974-1978)
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Measuring Impact (2003-2009)
• 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)
– External: International Society of Service Innovation Professionals (ISSIP)
• 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)
6/10/2015
development

6/10/2015
development
86

Naples forum on service 20150610 v4

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Naples forum on service 20150610 v4