Service science t shaped for smarter planet 20110727 v1
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Service science t shaped for smarter planet 20110727 v1

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keynote at IRSSM-2 in Yogyakarta, Indonesia on July 27th, 2011, Service Science: T-shaped Professionals for Building a Smarter Planet

keynote at IRSSM-2 in Yogyakarta, Indonesia on July 27th, 2011, Service Science: T-shaped Professionals for Building a Smarter Planet

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  • Reference content from this presentation as: Spohrer, JC (2011) Service Science: T-Shaped Professionals to Help Build a Smarter Planet. Keynote for Second International Research Symposium for Service Management ( IRSSM-2). Yogyakarta, Indonesia. July 27, 2011 http://irssm.upnyk.ac.id/ Permission to redistribute granted upon request to spohrer@us.ibm.com Title: Service Science: T-Shaped Professionals for Building a Smarter Planet Speaker: Dr. James C. Spohrer, IBM Abstract Economists report the growth of the service sector globally. This trend is likely to continue, as technological advances improve productivity, lower transaction costs, and increase outsourcing opportunities. Service-Dominant Logic (Vargo & Lusch), service science (Spohrer & Maglio), and service network theory (Gummesson) are all research directions that shift the focus away from service versus manufacturing and towards a focus on sustainable innovation in nested, networked system of systems. Sustainable innovation requires a focus on smarter systems, including transportation, water, food, energy, communications, buildings, retail, finance, health, education, and governance. T-shaped professional are needed with depth and breadth, both deep in one discipline/system with broad communication skills across multiple disciplines-systems. The focus is on improving T-shaped professionals working on teams to improve the design of service systems and improve quality of life: quality of service to customers, quality of jobs for workers, and quality of new opportunities for investors and other stakeholders. Both IBM’s Smarter Planet and Chesbrough’s Open Services Innovation efforts provide additional future directions for service science. Speaker Bio Dr. James (“Jim”) C. Spohrer IBM Innovation Champion and Director of IBM University Programs worldwide (IBM UP), Jim works to align IBM and universities in regional innovation ecosystems globally. Previously, Jim helped found IBM’s first Service Research group, the global Service Science community, and was founding CTO of IBM’s Venture Capital Relations Group in Silicon Valley. During the 1990’s while at Apple Computer, he was awarded Apple’s Distinguished Engineer Scientist and Technology title for his work on next generation learning platforms. Jim has a PhD in Computer Science/Artificial Intelligence from Yale, and BS in Physics from MIT. His current research priorities include applying service science to create smarter (less waste and more capabilities) universities and cities, also known as tightly-coupled holistic service systems that provide “whole service” to the people within them. He has more than ninety publications, been awarded nine patents, and is a Fellow of the SRII (Service Research and Innovation Institute).
  • Map Source: http://www.worldatlas.com/webimage/countrys/asia/id.htm Statistics Source http://en.wikipedia.org/wiki/Indonesia However, since 2010, service sector has employed more people than other sectors, accounting 48.9% of the total labor force, this has been followed by agriculture (38.3%) and industry (12.8%). ^ "Indonesia Economy Profile 2011". Indexmundi.com. http://www.indexmundi.com/indonesia/economy_profile.html. Retrieved 10 April 2011.
  • True leaders in every region of the world want the best for their citizens… these leaders, be they in Asia-Pacific, Africa, Middle-East, Europe, the Americas or wherever, ask themselves and their best policy-makers and advisers from government, industry, academics, or the social sector the same questions… How to create more and better jobs for their citizens? higher skill higher pay How to shift more work activities from routine physical, mental, interactional activities to higher-skill, higher-value activities? innovation (inventing best-practices, often from new ventures) transformation (implementing best-practices) How to invest in progress? continuously improve infrastructure continuously improve talent 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
  • http://www.bls.gov/emp/ep_chart_001.htm http://theeconomiccollapseblog.com/archives/student-loan-debt-hell-21-statistics-that-will-make-you-think-twice-about-going-to-college Posted below are 21 statistics about college tuition, student loan debt and the quality of college education in the United States.... #1 Since 1978, the cost of college tuition in the United States has gone up by over 900 percent . #2 In 2010, the average college graduate had accumulated approximately $25,000 in student loan debt by graduation day. #3 Approximately two-thirds of all college students graduate with student loans . #4 Americans have accumulated well over $900 billion in student loan debt. That figure is higher than the total amount of credit card debt in the United States. #5 The typical U.S. college student spends less than 30 hours a week on academics. #6 According to very extensive research detailed in a new book entitled "Academically Adrift: Limited Learning on College Campuses", 45 percent of U.S. college students exhibit "no significant gains in learning" after two years in college. #7 Today, college students spend approximately 50% less time studying than U.S. college students did just a few decades ago. #8 35% of U.S. college students spend 5 hours or less studying per week. #9 50% of U.S. college students have never taken a class where they had to write more than 20 pages. #10 32% of U.S. college students have never taken a class where they had to read more than 40 pages in a week. #11 U.S. college students spend 24% of their time sleeping, 51% of their time socializing and 7% of their time studying. #12 Federal statistics reveal that only 36 percent of the full-time students who began college in 2001 received a bachelor's degree within four years. #13 Nearly half of all the graduate science students enrolled at colleges and universities in the United States are foreigners. #14 According to the Economic Policy Institute, the unemployment rate for college graduates younger than 25 years old was 9.3 percent in 2010. #15 One-third of all college graduates end up taking jobs that don't even require college degrees. #16 In the United States today, over 18,000 parking lot attendants have college degrees. #17 In the United States today, 317,000 waiters and waitresses have college degrees. #18 In the United States today, approximately 365,000 cashiers have college degrees. #19 In the United States today, 24.5 percent of all retail salespersons have a college degree. #20 Once they get out into the "real world", 70% of college graduates wish that they had spent more time preparing for the "real world" while they were still in school. #21 Approximately 14 percent of all students that graduate with student loan debt end up defaulting within 3 years of making their first student loan payment.
  • Why service scientists are interested in universities…. They are in many ways the service system of most central importance to other service systems… Graph based on data from Source: http://www.arwu.org/ARWUAnalysis2009.jsp Analysis: Antonio Fischetto and Giovanna Lella (URome, Italy) students visiting IBM Almaden Dynamic graphy based on Swiss students work: http://www.upload-it.fr/files/1513639149/graph.html US is still “off the chart” – China projected to be “off the chart” in less than 10 years: US % of WW Top-Ranked Universities: 30,3 % US % of WW GDP: 23,3 % Correlating Nation’s (2004) % of WW GDP to % of WW Top-Ranked Universities US is literally “off the chart” – but including US make high correlation even higher: US % of WW Top-Ranked Universities: 33,865 % US % of WW GDP: 28,365 %
  • Technology is used by providers to perform more and more of the routine manual, cognitive, and transactional work Jobs Change: Individual Competencies & Institutional Roles
  • Part of IBM’s approach to the second problem is T-shaped people and service science…. What is the skills goal? T-shaped professional, ready for T-eamwork… T-shaped people are ready for T-eamwork – they are excellent communicators, with real world experience, and deep (or specialized) in at least one discipline and systems area, but with good team work skills interacting with others who are deep in other disciplines and systems areas. Also, T-shaped professionals also make excellent entrepreneurs, able to innovate with others to create new technology, business, and societal innovations. T-shaped people are adaptive innovators, and well prepared for life-long learning in case they need to become deep in some new area… they are better prepared than I-shaped people, who lack the breadth. Therefore, IBM and other public and private organizations are looking to hire more of this new kind of skills and experience profile – one that is both broad and deep.. These organizations have been collaborating with universities around the world to establish a new area of study known as service science, management, engineering, and design (SSMED) – to prepare computer scientists, MBAs, industrial engineers, operations research, management of information systems, systems engineers, and students of many other discipline areas – to understand better how to work on multidisciplinary teams and attack the grand challenge problems associated with improving service systems…
  • One part of IBM’s approach to the first problem is the Smarter Planet initiative and service science… The evolution of service science is to apply service science to create a Smarter Planet. What is smarter planet? A smarter planet is built out of many harmonized smarter systems, systems that are instrumented, interconnected, and intelligent (data, models, and analytics software are used to make better decisions) The world is instrumented meaning everything has computers, cameras, gps or other sensors – cars, stop lights, signs, roads, hospitals, retail stores, rivers, bridges, etc.. The world is getting more and more interconnected. If we could capture the right data and analyze it, we can make our planet smarter. IBM has been working on cleaning up pollution in Galway Bay, Ireland. The marine scientists told the IBMers that the mussels in the water close their shells when something bad enters the water. So IBM put sensors in some of the mussels and connected the sensors to an alert system and visualization system. When a pollutant enters the water, the mussels shut their shells, the sensors sends an alert and water management officials begin to take action to clean it up. Over time, they realize that a particular ship may be coming into the bay every other Tuesday, causing the problem, and they can go after the ship company to not drop pollutants or to find another way to rid of waste. This optimization takes place with other causes of the pollutants.
  • Korsten, P. and Seider, C. (2010) The world’s US$4 trillion challenge: Using a system-of-systems approach to build a smarter planet. IBM Institute for Business Value. http://www-935.ibm.com/services/us/gbs/bus/html/ibv-smarter-planet-system-of-systems.html The IBM report concluded that our planet can be viewed as a complex, dynamic, highly interconnected $54 trillion system of systems…. Some of you recognize that $54 trillion number is 100% if the WW 2008 GDP, and because GDP does not capture all the value (both gray and black market, as well as many types of value created by families and communities that is not part of formal economic exchange) the real value is much higher – but still $54 trillion per year is a very large number. The US economy is about 20-25% of the total. Also the top 2000 publically traded companies in the world, have annual revenues that are nearly 50% of this amount. So while it is a large number, it is possible to estimate the contribution made by individual nations and individual large businesses – and most importantly it is possible to see how complex and interconnected these systems are. But what about the waste or inefficiencies in these systems…
  • Korsten, P. and Seider, C. (2010) The world’s US$4 trillion challenge: Using a system-of-systems approach to build a smarter planet. IBM Institute for Business Value. http://www-935.ibm.com/services/us/gbs/bus/html/ibv-smarter-planet-system-of-systems.html The 480 economists surveyed estimate that all the systems carry inefficientes of up to $15 trillion, of which $4 trillion could be eliminated… The title of this IBM Business Value report is in fact “The World’s $4 Trillion Challenge: Using a system of systems approach to build a smarter planet.” One implication of this report since cities are where most of the population of the world is concentrated, is that some number of cities have over $1B in annual waste and inefficiencies that can be eliminated. This report is required reading for everyone in cities and universities around the world, who are interested in partnering together to first (1) estimate and develop ways of measuring the inefficiencies, and then (2) create actions plans that can compete for funding and other resources to make needed changes. As the systems reduce waste and expand capabilities for measuring inefficiencies, the systems become smarter systems and quality of life is improved thru modern service… And the good news is that every day there are more and more success stories being created. For example, the 2009 IBM Annual Report contains a map of the world….
  • Our approach to the second problem is Smarter Planet… What improves quality of life? Service system innovations. Every day we are customers of 13 types of service systems. If any of them fail, we have a “bad day” (Katrina New Orleans) I have been to two service science related conferences recently, one in Japan on Service Design and one in Portugal on Service Marketing… the papers from the proceedings of the conferences mapped onto all of these types of service systems… The numbers in yellow: 61 papers Service Design (Japan) / 75 papers Service Marketing (Portugal) / 78 Papers Service-Oriented Computing (US) Number in yellow Fist number: Service Design Conference, Japan 2 nd International Service Innovation Design Conference (ISIDC 2010), Future University Hakodate, Japan Second number Service Marketing Conference, Portugal, AMA SERVSIG at U Porto, Portugal Numbers in yellow: Number of AMA ServSIG 2010 abstracts that study each type of service system… (http://www.servsig2010.org/) Of 132 total abstracts… 10 studies all types of service systems 19 could not be classified In a moment we will look at definitions of quality of life, but for the moment, consider that everyday we all depend on 13 systems to have a relatively high quality of life, and if any one of these systems goes out or stops providing good service, then our quality of life suffers…. Transportation, Water, Food, Energy, Information, Buildings, Retail, Banking & Financial Services (like credit cards), Healthcare, Education, and Government at the City, State, and National levels…. Volcanic ash, hurricanes, earthquakes, snow storms, floods are some of the types of natural disasters that impact the operation of these service systems – but human made challenges like budget crises, bank failures, terrorism, wars, etc. can also impact the operation of these 13 all important service systems. Moreover, even when these systems are operating normally – we humans may not be satisfied with the quality of service or the quality of jobs in these systems. We want both the quality of service and the quality of jobs in these systems to get better year over year, ideally, but sometimes, like healthcare and education, the cost of maintaining existing quality levels seems to be a challenge as costs continue to rise… why is that “smarter” or sustainable innovation, which continuously reduces waste, and expands the capabilities of these systems is so hard to achieve? Can we truly achieve smarter systems and modern service? A number of organizations are asking these questions – and before looking at how these questions are being formalized into grand challenge questions for society – let’s look at what an IBM report concluded after surveying about 400 economists…. ==================== Quality of life for the average citizen (voter) depends on the quality of service and quality of jobs in 13 basic systems….. Local progress (from the perspective of the average citizen or voter) can be defined for our purposes as (quality of service & jobs) + returns (the provider, which is really the investor perspective, the risk taker in provisioning the service) + security (the authority or government perspective on the cost of maintaining order, and dealing with rules and rule violations) + smarter (or the first derivative – does all this get better over time – parents often talk about wanting to help create a better world for their children - sustainable innovation, means reducing waste, being good stewards of the planet, and expanding our capabilities to do things better and respond to challenges and outlier events better)…. Without putting too fine a point on it, most of the really important grand challenges in business and society relate to improving quality of life. Quality of life is a function of both quality of service from systems and quality of opportunities (or jobs) in systems. We have identified 13 systems that fit into three major categories – systems that focus on basic things people need, systems that focus on people’s activities and development, and systems that focus on governing. IBM’s Institute for Business Value has identified a $4 trillion challenge that can be addressed by using a system of systems approach. Employment data… 2008 http://www.bls.gov/news.release/ecopro.t02.htm A. 3+0.4+0.5+8.9+1.4+2.0=16.2 B. C.13.1+1.8=14.9 Total 150,932 (100%) Transportation (Transportation and Warehousing 4,505 (3%)) Water & Waste (Utilities 560 (0.4%)) Food & Manufacturing (Mining 717 (0.5%), Manufacturing 13,431 (8.9%), Agriculture, Forestry, Fishing 2,098 (1.4%)) Energy & Electricity Information (Information 2,997 (2%)) Construction (Construction 7,215 (4.8%)) Retail & Hospitality (Wholesale Trade 5,964 (4.0%), Retail Trade 15,356 (10.2%), Leisure and hospitality 13,459 (8.9%)) Financial & Banking/Business & Consulting (Financial activities 8,146 (5.4%), Professional and business services 17,778 (11.8%), Other services 6,333 (4.2%)) Healthcare (Healthcare and social assistance 15,819 (10.5%) Education (Educational services 3,037 (2%), Self-employed and unpaid family 9,313 (6.2%), Secondary jobs self-employed and unpaid family 1,524 (1.0%)) City Gov State Gov (State and local government 19,735 (13.1%)) Federal Gov (Federal government 2,764 (1.8%))
  • The reasonable questions: What is a service system? What is service science?
  • T-shaped people know about the systems-disciplines matrix, and have broad communications skills across all systems and disciplines, and great depth in at least one discipline area and one systems areas… Examples: Systems Flows Transportation Human Development Health Governance National-level Disciplines Stakeholder-focus Customer = marketing Resource-focus Technology = engineering Change-focus History = economics Value-focus Innovation = entrepreneurship
  • There are many opportunities for educational institutions to specialize. Better tuned competence of individuals allows graduates to hit the ground running and better fill roles in business and societal institutions…. Better general education will allow more rapid learning of an arbitrary area of specialization, and create a more flexible labor force… All service systems transform something – perhaps the location, availability, and configuration of materials (flow of things), or perhaps people and what they do (people’s activities), or perhaps the rules of the game, constraints and consequences (governance). How to visualize service science? The systems-disciplines matrix… SSMED or service science, for short, provides a transdisciplinary framework for organizing student learning around 13 systems areas and 13 specialized academic discipline areas. We have already discussed the 13 systems areas, and the three groups (flows, human activity, and governing)… the discipline areas are organized into four areas that deal with stakeholders, resources, change, and value creation. If we have time, I have included some back-up slides that describes service science in the next level of detail. However, to understand the transdisciplinary framework, one just needs to appreciate that discipline areas such as marketing, operations, public policy, strategy, psychology, industrial engineering, computer science, organizational science, economics, statistics, and others can be applied to any of the 13 types of systems. Service science provides a transdisciplinary framework to organize problem sets and exercises that help students in any of these disciplines become better T-shaped professionals, and ready for teamwork on multidisciplinary teams working to improve any type of service system. As existing disciplines graduate more students who are T-shaped, and have exposure to service science, the world becomes better prepared to solve grand challenge problems and create smarter systems that deliver modern service. Especially, where students have had the opportunity to work as part of an urban innovation center that links their university with real-world problems in their urban environment – they will have important experiences to help them contribute to solving grand challenge problems. ================================================ SSMED (Service Science, Management, Engineering and Design) Systems change over their life cycle… what is inside become outside and vice versa In the course of the lifecycle… systems are merged and divested (fusion and fission) systems are insourced and outsourced (leased/contracted relations) systems are input and output (owner ship relations) SSMED standard should ensure people know 13 systems and 13 disciplines/professions (the key is knowing them all to the right level to be able to communicate and problem-solve effectively) Multidisciplinary teams – solve problems that require discipline knowledge Interdisciplinary teams – solve harder problems, because they create new knowledge in between disciplines Transdisciplinary teams – solve very hard problems, because the people know discipline and system knowledge Ross Dawson says “Collaboration drives everything” in his talk about the future of universities… https://deimos.apple.com/WebObjects/Core.woa/BrowsePrivately/griffith.edu.au.3684852440
  • http://service-science.info/wp-content/uploads/2010/08/service-science-program-guide-V2.doc http://service-science.info/wp-content/uploads/2010/03/service-science-program-guide-V1.pdf
  • High school drop out rates in cities can be high… by increasing focus on system of systems in all grade levels, especially STEM discussions of how to study and then propose solutions to local community challenges – there is evidence that exemplar programs increase the diversity and desire of students to go onto college in STEM areas, and then go on to jobs that use these skills to improve systems…. A number of NAE studies as well as NMC study on challenge-based learning provide encouraging information – also IBM has a Smater Learning white paper which confirms some of these findings. http://www.ibm.com/ibm/ideasfromibm/us/smartplanet/topics/educationtechnology/20090601/index1.shtml See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning Smarter Planet University Jam Final report at: https://www.ibm.com/developerworks/university/smartplanet_jam/ Awards given to top participants, e.g., faculty and students… Prizes as Incentives for Public-Private Partnerships In recent years, there has been a renaissance in “incentive prizes” – which reward contestants for achieving a specific future goal. http://blog.ostp.gov/2009/06/17/prizes-as-incentives-for-public-private-partnerships/comment-page-2/ crowd-sourcing the world.... see http:// www.itsa.org /challenge/ WE are smarter than ME, i.e. and a diversified, independent, decentralized community can outperform even the greatest of experts. This challenge is open to entrepreneurs, commuters, transportation experts, researchers, universities, students, scholars, scientists and citizens from all fields around the globe. All ideas will be reviewed discussed and rated by an open global community, to determine the best and most creative ideas to effectively solve the consequences of traffic congestion. The winner will be announced during the 16th World Congress on Intelligent Transportation Systems in Stockholm, Sweden, September 21 - 25, 2009, and will receive a cash a of $50,000 USD , as well as development and implementation support to pursue turning the ideas into real-world solutions. Ideas will be reviewed, discussed and rated by an open global community. The public will determine the best and most creative ideas to effectively solve the consequences of traffic congestion. The winner will be chosen by the community. For the next 60 days the community (which anyone can join ) will review and rate all submissions on 5 criteria. On August 1st, the top 9 solutions will be announced. These 9 will then submit more information including a slideshow, a video and founder bios. Based on this information, the participating community members can decide who they each want to back. Each member allocates points they have earned through what is known as a predictive market. The overall winner is the solution that receives the most backing. This challenge truly is: for the people, by the people, and decided by the people.
  • In conclusion, a focus on smarter systems and modern service can help cities and universities (along with other industry and government partners) to invest together in sustainable innovations, that both reduces waste and expands capabilities. Perhaps someday we may even discover and equivalent of Moore’s Law for improving service systems… but until that time, I want to say… ================================ Moore’s Law is sustained by investments that improve computational systems according to a roadmap Can we create an investment roadmap that will improve service systems according to a roadmap? GIE (Globally Integrated Enterprise) uses a run-transform-innovate investment model for continuous improvement. Run = use existing knowledge, routine operations and maintenance Transform = use industry best practice knowledge to gain the benefits of known improvements Innovation = create new knowledge that allows improvements in both ends and means of service systems, and the resources they configure. As information about service systems doubles each year, and storage, processing, and bandwidth rise, making globally better decisions is an important opportunity to explore. FYI.... short history of transistors, integrated circuits, and data centers From transistors... 1. The transistor is considered by many to be the greatest technology invention of the 20th Century 2. While the concept of the transistor has been around since the 1920's (Canadian Physicist Julius Edgar Lilienfeld's 1925 Patent - devices that use physical phenomenon of field electronic emissions)... 3. Commercially available individual transistors that could be wired into circuits, invented and commercialized in 1947 & 1948 (Bell Labs Shockley Point Contact/Junction Transistor Theory 1947, Raytheon CK703 first commercially available 1948) To Integrated circuits... 4. However, it was not until the late 1950's and early 1960's that manufacturing process advances and commercial applications began using many of them in integrated circuits (TI, Bell Labs, etc.) - Sept 1958 the first integrated circuit (Jack Kilby TI) To Moore's law.... 5. By 1965 Gordon Moore's (Intel) paper stated the number of transistors on a chip would double about every two years (and exponential increase that has over 40 years of confirmation)... 6. The number of transistors manufactured each year (in 2009) is estimated at 10**18 - 3.9 x 10**6 transistors produced in 1957 (tenth anniversary of first transistor) - abut 10**18 transistors manufactured in 2009 (62th anniversary of first transistor) To data centers and "electricity consumption" .... 7. By 2005, data centers and server farms consume 0.5% of total worldwide electricity production (1% if cooling is included) - 2005 consumption equivalent of seventeen 1000 MW powerplants - electric consumption for data centers doubled from 2000 to 2005 Sources: http://semiconductormuseum.com/HistoricTransistorTimeline_Index.htm http://www.mentor.com/company/industry_keynotes/upload/rhines-globalpress-low-power.pdf http://www.iop.org/EJ/article/1748-9326/3/3/034008/erl8_3_034008.pdf?request-id=7cf4b6e5-498f-4ed4-bfc9-76eda96773ce
  • I want to thank my IBM colleagues… here are some facts about IBM… Sources http://en.wikipedia.org/wiki/IBM#cite_note-10K-0 http://www-03.ibm.com/press/us/en/pressrelease/33341.wss http://www.fiercecio.com/press-releases/ibm-reports-2010-fourth-quarter-and-full-year-results-nyse-ibm-q4
  • True leaders in every region of the world want the best for their citizens… these leaders, be they in Asia-Pacific, Africa, Middle-East, Europe, the Americas or wherever, ask themselves and their best policy-makers and advisers from government, industry, academics, or the social sector the same questions… How to create more and better jobs for their citizens? higher skill higher pay How to shift more work activities from routine physical, mental, interactional activities to higher-skill, higher-value activities? innovation (inventing best-practices, often from new ventures) transformation (implementing best-practices) How to invest in progress? continuously improve infrastructure continuously improve talent 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
  • This talk will covers three topics: A stimulus, a response, and an evolution Stimulus: Service Growth (for the World and IBM) Response: Service Science Priorities (from the Cambridge University report and the Arizona State University report) Evolution: Service science for a Smarter Planet – tries to answer a series of questions - What is smarter planet - What improves quality-of-life - What is a service system? What is service science? - What’s the skills goal? - Where are projects happening? - Where is the science? Today, at IBM we are applying service science to help build a Smarter Planet, one that is instrumented, interconnected, and intelligent through better decision-making from improved analytics and models of complex service system networks. We are working together with government, academics, and industry partners to build Smarter Cities in a growing number of developed and emerging nations around the world.
  • We all know that economists have been reporting on the growth of the service economy for the last century… Over the last two hundred years, the US has shifted from agriculture to manufacturing to service jobs, as dominant. The growth in service jobs parallels the growth of the information economy, and many of the jobs are knowledge-intensive, including finance, health, education, government, B2B, etc. Developed and emerging markets are seeing the same shift – this is a global trend. What was clear was that all developed and emerging market nations where shifting to service economies due to increasing use of technology in manufacturing and agriculture (productivity increases), and increasing use of information technology in traditional service areas, including utilities, building maintenance, retail & hospitality, finance, health, education, and government – making the service sector more knowledge-intensive and requiring more technical skills. As well as more outsourcing, leading to more B2B service. In the back-up slides we introduce the concept of product-service-systems to better understand the way the global economies are evolving… ServicesOLD= Not Natural or Manufactured Products (Negative) ServiceNEW = Applying Knowledge/Resources to Benefit Customers/Stakeholders (Positive) Why does outsourcing the jobs or changing the business model (e.g., leasing, mass-customizaton) cause the category to change? It shouldn’t, modern farms and factories are service systems too… See the following papers… Vargo & Lusch (2004) Evolving to a New Dominant Logic for Marketing. Journal of Marketing. Tien & Berg (2006) On Services Research and Education. Journal of Systems Science and Systems Engineering. Two ways the Firm can think about the world: Firm – can I think of things my customers want to own, and how can I make and sell those things. Firm – can I think of ongoing relationships/interactions with my customers and their stakeholders, and how can I establish and continuously improve those interactions in a win-win manner Fact: Service growth in “national economies” All nations are experiencing a macro-economic shift from value in producing physical things (agriculture and goods) to value from apply capabilities for the benefit of others (services). Observation: Service sector is where the job growth is, not only in the US but around the world. Implication: Most science and engineering and management jobs will be in the service sector. For example, Kenneth Smith of H.B.Maynard (one of the oldest and most prestigious industrial engineering consulting firms) said - “Historically, most of our business at H.B. Maynard was manufacturing, today roughly 80% is in the retail sector…” So why do we still train most scientist and engineers for manufacturing age jobs? Could this be part of the reason that in most US engineering schools only 50% of entering engineering students graduate with an engineering degree? The service sector is the fastest growing segment of global economies. In the US, in 1800 90% of people were worked on farms, and today less than 3% of workers are employed in agriculture. Goods, or manufacturing of physical products, peaked in the US in the mid-1950’s and has been decreasing ever since due to automation and off shoring. However, services, especially complex information and business services, as we will see is where the growth is. But the growth in the service sector jobs is not just in the developed countries, it is also happening in the developing countries. In fact, the International Labor Organization, reports that 2006 was the first time in human history that more people worker in the service sector than in agriculture world wide. 40% in service sector, 39.7% in agriculture, and 21.3% in manufacturing, with the growth coming by moving people from agriculture to services – this represents the largest labor force migration in human history. 1970 estimates % of service in labor force (change to 2005/2009 est) China 12 +17 142% India 17 +6 35% US 62 +14 23% Indonesia 29 +10 34% Brazil 41 +25 61% Russia 42 +27 64% Japan 48 +19 45% Nigeria 16 +3 19% Bangledesh 19 +7 37% Germany 45 +19 42%
  • What you may not know is that manufacturing companies are also seeing a growth in service revenue… from financing to maintenance to customer support services, because of the growing complexity of products… IBM has seen its service revenue grow, and lead the growth of IBM in the last two decades. In the last two decades the growth was B2B, in the coming decade it will be B2G service growth – powered in part by shared service across government and cloud computing… Fact: Service growth in “manufacturing” businesses 2008 GTS 40 (39.2) GBS 20 (19.6) SWG 22 (22.1) S&T 20 (19.2) FIN 2 (2.6) Total 103.6B Profit 45.6% 2010 GTS 38.2B GBS 18.2B -> 56.4B HW 18.0B SW 22.5B FIN 2.2B -> 42.7B Source: http://www.fiercecio.com/press-releases/ibm-reports-2010-fourth-quarter-and-full-year-results-nyse-ibm-q4
  • So top universities around the world are starting service science related programs to study service and service system, and get better at service innovation… including government, healthcare, and education…
  • We also know about the many attempts to create research frameworks for service science… Researchers at Arizona State University in the US recently surveyed service researchers from around the world to create a research priorities framework for service science. You can read the executive summary at the following website: http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm You can read the complete article in the Journal of Service Research… Ostrom, AL, MJ Bitner, SW Brown, KA Burkhard, M Goul, V Smith-Daniels, H Demirkan, E Rabinovich (2010) Moving Forward and Making a Difference: Research Priorities for the Science of Service. Journal of Service Research. 13(1). 4-36.
  • Service systems are the fundamental abstraction of service science. The ABC’s of service-systems thinking are: A is the Service Provider, B is the Service Customer, and C is the Service Target For example, in College as a Service (CaaS), A might be a college, B an undergraduate student, and C dimensions of the student that will be transformed, such as specific skills and competences, certifications, and post-family social relationships, including help finding a good job
  • How might a service scientist approach the problem of creating service innovations to continuously improve college courses, year over year, when required competencies and job roles are forever changing? For example: Computer Science 2003-2005 (dramatic drop in enrollment, student quality, faculty motivation, and future employer satisfaction with grads) http://www.cra.org/uploads/documents/resources/taulbee/CRA_Taulbee_2009-2010_Results.pdf First, service scientists learn about problems, opportunities, and boundaries by interviewing stakeholders. Next, they create a formal model of the service system, including a table of all stakeholder interactions, what technologies and organizations mediate those interactions, and who owns, does not own, or aspires to own the perceived problems, opportunities, and boundary zones. Service scientists create designs to scale the capacity of service systems, up and down, and continuously improve upon multiple stakeholder measure For example, given the three problems… • Each year 20% of faculty activities should be converted to upfront e-learning that students must pass to enroll in the class. Year over year, this will ensure the capability of students entering the classroom increases slightly. The new service system, an augmentation, is required to engage faculty and other stakeholders to identify the 20% of the classroom activity to be freed up, and embed these curricular components into the e-learning certification system. • Half the freed-up faculty time should be replaced with new course material designed to better meet the needs of industry. The second added service system will engage industry and faculty to create the needed curriculum changes, such as description of specific on-the-job challenges and responsibilities faced by practitioners. • Half the freed-up faculty time should be replaced with new course material designed to meet the needs of the faculty for more intellectually stimulating content and meaningful work experience, such as the top research problems they are working on and why.
  • What are the largest and smallest service system entities that have the problem of interconnected systems? Holistic Service Systems like nations, states, cities, and universities – are all system of systems dealing with flows, development, and governance. =============\\ Nations (~100) States/Provinces (~1000) Cities/Regions (~10,000) Educational Institutions (~100,000) Healthcare Institutions (~100,000) Other Enterprises (~10,000,000) Largest 2000 >50% GDP WW Families/Households (~1B) Persons (~10B) Balance/Improve Quality of Life, generation after generation GDP/Capita Quality of Service Customer Experience Quality of Jobs Employee Experience Quality of Investment-Opportunities Owner Experience Entrepreneurial Experience Sustainability GDP/Energy-Unit % Fossil % Renewable GDP/Mass-Unit % New Inputs % Recycled Inputs
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  • Universities connect information flows between other HSS, cities, states, nations Local optimizations can spread quickly to other HSS… Top 3000 cities: http://www.mongabay.com/cities_pop_02.htm Of course the opportunity is not just local – while local innovation impact the lives of staff, faculty, students and their families most directly – as cities partner more (twin city and sister city programs) and as universities also establish global collaborations with campuses in other regions of the world – the opportunity for better city-university partnerships is both local and global.
  • As universities become better partners with their host city, the innovations centers are strengthened and faculty and students get streams of data from different city systems from transportation, to water and waste, to healthcare, and energy systems…. Students learn to work on multidisciplinary teams and engage in understanding and creating proposed solutions to real-world problems that do not respect discipline boundaries – in this way students are better prepared to become good citizens in their future community, and to work on multidisciplinary teams when they graduate and get jobs… Urban Innovations Center are related to Urban Planning departments. However, Urban Planning tends to focus on land use and development, whereas Urban Innovations Centers are emerging with broader agendas…
  • Of course, this is a case of universities, their staff, faculty, and students acting locally. In a sense, the cities are a living lab for the universities as they establish relevant projects and some create urban innovation centers… to help measure the waste in exisitng systems, and try to create smarter systems with more capabilities including provisioning and delivering modern service. As the list of cities with major populations indicates, the opportunity to create innovations that impact the lives of millions of people is a real opportunity for universities that can establish the right partnership with their host city…
  • Question: How can we maintain a high quality of life when population is increasing, flat, decreasing? Understand “service system scaling” will be a key part of the answer… Source of UN chart is Wikipedia “World Population” World population from 1800 to 2100, based on UN 2004 projections (red, orange, green) and US Census Bureau historical estimates (black). The human population “carrying capacity” of planet Earth depends on the ecology of service systems we can collectively create and maintain…. Especially important building blocks to get right are cities and universities – we call these tightly-coupled holistic service systems, and argue for their importance as a topic of research in the emerging area known as service science… http://en.wikipedia.org/wiki/Carrying_capacity The carrying capacity of a biological species in an environment is the population size of the species that the environment can sustain indefinitely, given the food, habitat, water and other necessities available in the environment. For the human population, more complex variables such as sanitation and medical care are sometimes considered as part of the necessary establishment. As population density increases, birth rate often decreases and death rate typically increases. Permission to re-distribute granted by Jim Spohrer – please request via email (spohrer@us.ibm.com)
  • But before we begin, let’s go to chart 2 to illustrate a few facts about buildings that you may not be aware of. In 2008, The National Science and Technology Council in the US estimated that commercial and residential buildings consume 1/3 of the world’s energy; in North America this translates to 72% of the electric generation. That’s a very large number. And if this trend continues, by 2025, buildings worldwide will be the largest consumers of global energy , more than transportation and the industrial sectors combined. Also, up to 50% of the electricity and water used by buildings is wasted … another large number, and some might say very shocking…. And data centers - we IBMers are all very familiar with data centers. They are among the largest consumers of energy within a building – and their energy usage is doubling every five years. And when you consider that buildings are either the second or third largest expense on the income statement for most companies, it’s easy to understand the impact this waste is having on the bottom line, and it is also easy to understand why Smarter Buildings is a big idea, and why customers are showing a great interest in it …… =========================================================================== SOURCE MATERIALS: Statement: Worldwide, buildings consume 42% of all electricity – up to 50% of which is wasted. Buildings consume 42% of all electricity — more than any other type of physical asset. They generate 15% of all green-house gas emissions. In the United States, the numbers are even greater: buildings guzzle 72% of all energy, and produce 38% of green-house gas emissions. Source: IBM Smarter Buildings Survey, Customers Rank their Office Buildings , 2010, page 2 http://www-03.ibm.com/press/attachments/IBM_Smarter_Buildings_Survey_White_Paper.pdf Statement: Buildings lose as much as 1/2 of the water that flows into them. Source: IBM Smarter Buildings Survey, Customers Rank their Office Buildings , 2010, page 2 http://www-03.ibm.com/press/attachments/IBM_Smarter_Buildings_Survey_White_Paper.pdf Statement: Buildings are the number 1 contributor to global Co2 emissions. Source: Energy Information Administration (2006). Emissions of Green House Gases in the United States. In New York City, for example, buildings account for 64% of NYC’s Carbon Emissions. Source: http://www.nyc.gov/html/planyc2030/html/emissions/emissions_ourdata.shtml Statement: Energy costs alone represent about 30% of an office building’s total operating costs. Source: EPA, http://www.fypower.org/bpg/index.html?b=offices Statement: By 2025, buildings worldwide will become the top energy consumers. Federal R&D Agenda for Net-Zero Energy, High-Performance Green Buildings http://www.bfrl.nist.gov/buildingtechnology/documents/FederalRDAgendaforNetZeroEnergyHighPerformanceGreenBuildings.pdf Statement: According to studies by EPA energy cost represent up to 30% of OPEX cost. 79% ( 8 out of 10 rounded ) according to a recent IBM survey prefer to work in buildings that offer as part of the regular routine at work, to options to conserve resources such as water and electricity. The Carbon Disclosure Project estimates that 59 jurisdictions around the world are either have or are actively pursuing carbon mandates that will effect buildings. Statement: Second largest expense item Shttp://www.cbre.com/NR/rdonlyres/7509891F-A845-4B94-B630-2022BB2F2CE5/734095/WHITEPAPER_ReducingOccupanyCosts1.pdf Statement: Data center energy use doubling every 5 years . As IDC estimates, in this decade, the average customer will have increased their server capacity by six times and their average storage capacity by 69 times. As a result, all of those devices are using more energy, and we’ve seen the energy use in data centers double over the last five years. And that projected increase is expected to continue.
  • Now, let’s move to chart 3 and talk about some of the benefits of Smarter Buildings. Smarter buildings can reduce energy consumption by as much as 40%. The higher savings are typically achieved when implementing both physical enhancements, and real-time monitoring tools. Smarter Buildings can also reduce maintenance costs by 10 to 30%, and those numbers are based on real results derived by customers using Maximo to maintain their facilities. A recent study conducted by San Diego University found that LEED and Energy Star multi-tenant buildings have a higher occupancy rate of 91% and a sale price increase of 5% when compared to Non-rated buildings. And that makes sense when you consider that commercial and residential tenants are typically responsible for their energy bills. Also, a variety of studies have demonstrated real productivity benefits in commercial and industrial settings. For example, according to the U.S. Green Building Council (USGBC) office worker productivity increases between 2-18% on average in green buildings, and occupants are more willing than ever to participate in making their buildings more environmentally responsible. their buildings more environmentally responsible. ========================================================================================================== SOURCE MATERIALS By way of example: Smart buildings can reduce energy consumption by as much as 40% or higher and the associated maintenance cost by 10-30%. The St. Regis Hotel in Shanghai integrated 12 subsystems to create one intelligent building, with a ratio of energy costs to revenue below 5% (compared to 8% for other five-star hotels), a savings of 40%. As the only 5-star hotel in Shanghai awarded "Intelligent Building" status, St. Regis Hotel, Shangahi is exclusively equipped with building control communication protocols that help ensure the safety and comfort of all guests. http://www.starwoodhotels.com/stregis/property/overview/announcements.html?propertyID=1365 Other sources: US National Science & Technology Council, "Federal R&D Agenda for Net Zero Energy, High Performance Green Buildings." 30 September 2008, pg 7, Continental Automated Buildings Association, "Convergence of Green and Intelligent Buildings." 2008, pg 7, 33.) See CABA Bright Green Bldgs.pdf or US Federal Green Buildings Agenda 0930208.pdf … and save 30% in water usage. See Continental Automated Buildings Association, "A National Green Building Research Agenda." June 2008, pg 7, 138 or CABA Bright Green Bldgs.pdf at link below http://w3.ibm.com/connections/files/app?lang=en#/person/5ca21fc0-8f0a-1028-8107-db07163b51b2/file/d35fc97d-21dd-4a57-84c7-82019e26bd2b And for a glimpse of what is possible through a smarter building approach, consider the how Smarter Buildings help people think and be more productive. The number of EPA Energy Star buildings growing 30% each year. This growth is expected to continue as reported by McGraw-Hill. A recent study of LEED & Energy Star buildings conducted by the Burnham-Moores Center for Real Estate at San Diego University and The CoStar Group found significant advantages. This study of multitenant buildings shows an increase in rental & occupancy rates and sale price compared to Non-rated buildings. http://www.costar.com/josre/ A variety of studies have demonstrated productivity benefits in commercial and industrial settings. For example, according to the U.S. Green Building Council, office worker productivity increases between 2-18% on average in green buildings. http://w3.ibm.com/connections/files/app?lang=en#/person/5ca21fc0-8f0a-1028-8107-db07163b51b2/file/d35fc97d-21dd-4a57-84c7-82019e26bd2b See page 10. Statement: 65% of building occupants are willing to help redesign their workplace to make it more environmentally responsible. Source: IBM Smarter Buildings survey (2010) http://www-03.ibm.com/press/attachments/IBM_Smarter_Buildings_Survey_White_Paper.pdf
  • Let’s move on and look at how buildings operate today. In the middle of this chart, you will see the essential day-to-day service such as lighting, heating, ventilation, air conditioning, water, elevators and security. We are all used to those services and we almost do not notice them unless they break! But those are not the only processes occurring in buildings. Look to the left, and there is another set of services: Occupancy services; lifecycle management of the equipment; regulatory compliance; portfolio management for the organizations that own multiple buildings; tenant services and bill payments. Most of the building systems on the left operate independently, through a mix of vendors, and have different protocols and transport mechanisms. These different systems have also been advancing and maturing at different rates. If you add to this, the impact and influence of external factors shown on the right side of the chart, like weather patterns, emergency operations, variable utility rates, then you can begin to see just how complex managing a building could be.
  • Permission to re-distribute granted by Jim Spohrer – please request via email (spohrer@us.ibm.com) This talk provided a concise introduction to SSME+D evolving, and applying Service Science to build a Smarter Planet… Reference content from this presentation as: Spohrer, JC (2010) Presentation: SSME+D (for Design) Evolving: Update on Service Science Progress & Directions. Event. Place. Date. Permission to redistribute granted upon request to spohrer@us.ibm.com But I want to end by sharing some relevant quotes… The first you may have seen on TV or heard on the radio – it is from IBM – Instrumented, Interconnected, Intellient – Let’s build a smarter planet (more on this one shortly) Second, If we are going to build a smarter planet, let’s start by building smarter cities, (as we will see cities turn out to be ideal building blocks to get right for a number of reasons) And if we focus on cities, then the quote from the Foundation Metropolitan paints the right picture, cities learning from cities learning from cities… The next is probably the best known quote in the group “think global, act local” (we will revisit this important thought) Since all the major cities of the world have one or more universities, the next quote is of interest “the future is born in universities” And two more well known quotes about the future – the best way to predict the future is to build it, and the future is already here… it is just not evenly distributed. The next quote is an important one for discipline specialists at universities to keep in mind – real-world problems may not respect discipline boundaries (so be on guard for myopic solutions that appear too good to be true, they often are!)… Because if we are not careful, today’s problems may come from yesterday’s solutions… And since we cannot anticipate all risks or quickly resolve them once we notice them, we should probably never forget what HG Wells said - that history is a race between education and catastrophe… In a world of accelerating change, this last statement also serves as a reminder that the pace of real innovation in education is a good target for study in terms of smarter systems and modern service…
  • In conclusion, let’s consider the big picture – starting with the big bang…. and evolution of the earth, life on earth, human life, cities, universities, and the modern world… the evolution of observed hierarchical-complexity Age of natural systems (age of the universe): Big Bang http://en.wikipedia.org/wiki/Age_of_the_universe Age of urban systems (age of complex human-made world): Oldest city http://en.wikipedia.org/wiki/List_of_cities_by_time_of_continuous_habitation (end of last Ice Age was about 20,000 years ago, about 5 million people on earth by 10,000 years ago) http://www.ncdc.noaa.gov/paleo/ctl/100k.html (last Ice Age was probably started about 70,000 years ago when a super volcano erupted blocking sun light) Many people still ask -- where is the science in the “Service Science?” One answer is that the science is hidden away in each of the component disciplines that study service systems, scientifically from their particular perspective… However, the big picture answer is “Ecology” - Ecology is the study of the abundance and distribution of entities (populations of things) in an environment… and how the entities interact with each other and their environment over successive generations of entities. The natural sciences (increasingly interdisciplinary) study the left side, using physics, chemistry, and biology Service science (originated as interdisciplinary) studies the right side, using history, economics, management, engineering, design, etc. Service science is still a young area, but from the growth of service in nations and businesses to the opportunity to apply service science to build a smarter planet, innovate service systems, and improve quality of life… it is an emerging science with bright future, and yes… it will continue to evolve : - ) Most people think of ecology in terms of living organisms, like plants and animals in a natural environment. However, the concept of ecology is more general and can be applied to entities as diverse as the populations of types of atoms in stars to the types of businesses in a national economy. I want to start my talk today on “service,” by first thinking broadly about ecologies of entities and their interactions. Eventually, we will get to human-made service system entities and human-made value-cocreation mechanisms… but for today, let’s really start at the very beginning – the big bang. About 14B years ago (indicated by the top of this purple bar), our universe started with a big bang. And through a process of known as fusion, stars turned populations of lighter atoms like hydrogen into heavier atoms like helium, and when stars of a certain size have done all the fusion they could, they would start slowing down, and eventually collapse rapidly, go nova, explode and send heavier atoms out into the universe, and eventually new stars form, and the process repeats over and over, creating stars with different populations of types of atoms, including heavier and heavier elments. So where did our sun and the earth come from…. Eventually after about ten billion years in the ecology of stars and atoms within stars, a very important star formed our sun (the yellow on the left) – and there were plenty of iron and nickel atoms swirling about as our sun formed, and began to burn 4.5B years ago, and the Earth formed about 4.3B years ago (the blue on the left)… In less than a billion years, the early earth evolved a remarkable ecology of complex molecules, including amino acids, and after less than a billion years, an ecology of bacteria took hold on early earth (the bright green on the left). The ecology of single cell bacteria flourished and after another billion years of interactions between the bacteria, the first multicellular organisms formed, and soon the ecology of sponges (the light blue on the left) and other multi-cellular entities began to spread out across the earth. Then after nearly two billion years, a type of division of labor between the cells in multicelluar organism lead to entities with cells acting as neurons in the first clams (the red on the left), and these neurons allowed the clams to open and close at the right time. After only 200 million years, tribolites appeared the first organisms with dense neural structures that could be called brains appeared (the black on the left), and then after about 300 million years, multicelluar organisms as complex as bees appeared (the olive on the left), and these were social insects, with division of labor among individuals in a population, with queens, drones, worker bees. So 200 million years ago, over 13B years after the big bang, the ecology of living entities is well established on planet earth, including social entities with brains and division of labor between individuals in a population…. Living in colonies that some have compared to human cities – where thousands of individuals live in close proximity and divide up the work that needs to be done to help the colony survive through many, many generations of individuals that come and go. Bees are still hear today. And their wingless cousins, called ants, have taken division of labor to incredible levels of complexity in ant cities in nearly every ecological niche on the planet, except under water. Now let’s look at the human ecology,and the formation of service system entities and value-cocreation mechanisms, a small portion of which is represented by the colored bar on the right. Recall bees appeared about 200 million years ago, a small but noticeable fraction of the age of the universe. Now take 1% of this little olive slice, which is 2 million years… that is how long people have been on earth, just one percent of this little olive slice here. What did people do in most of that 2million years? Basically, they spread out to every corner of the planet, and changed their skin color, eye colors, and hair colors, they spread out and became diverse with many different appearances and languages. It took most of that 200 millions just to spread out and cover most of the planet with people. When there was no more room to spread out the density of people in regions went up…. Now take 1% of that 2million years of human history which basically involved spreading out to every corner of the planet and becoming more diverse, recall ecology is the study of abundance and distribution and types of interactions, and 1% of that 2million years is just 20,000 years, and now divide that in half and that represents 10,000 years. The bar on the right represents 10,000 years or just 500 generations of people, if a generation is about 20 years. 500 generations ago humans built the first cities, prior to this there were no cities so the roughly 5M people spread out around the world 0% lived in cities, but about 500 generations ago the first cities formed, and division of labor and human-made service interactions based on division of labor took off – this is our human big bang – the explosion of division of labor in cities. Cities were the big bang for service scientists, because that is when the diversity of specialized roles and division of labor, which is at the heart of a knowledge-based service economy really begins to take off... So cities are the first really important type of human-made service system entities for service scientists to study, the people living in the city, the urban dwellers or citizens are both customers of and providers of service to each other, and division of labor is the first really important type of human-made value-cocreation mechanism for service scientists to study. (Note families are a very important type of service system entity, arguably more important than cities and certainly much older – however, family structure is more an evolution of primate family structure – and so in a sense is less of a human-made service system entity and more of an inherited service system entity… however, in the early cities often the trades were handed down father to son, and mother to daughter as early service businesses were often family run enterprises in which the children participated – so families specialized and the family names often reflect those specialization – for example, much later in England we get the family names like smith, mason, taylor, cooper, etc.) So to a service scientist, we are very excited about cities as important types of service system entities, and division of labor as an important type of value-cocreation mechanism, and all this really takes off in a big way just 500 generations ago when the world population was just getting to around 5M people spread out all around the world – so 10,000 years about about 1% of the worlds population was living in early versions of cities. It wasn’t until 1900 that 10% of the world’s then nearly 2B people lived in cities, and just this last decade that 50% of the worlds 6B people lived in cities, and by 2050 75% of the worlds projected 10B population will be urban dwellers. If there is a human-made service system that we need to design right, it is cities. It should be noted that the growth of what economist call the service sector, parallels almost exactly the growth of urban population size and increased division-of-labor opportunities that cities enable – so in a very real sense SERVICE GROWTH IS CITY GROWTH OR URBAN POPULATION GROWTH… in the last decade service jobs passed agriculture jobs for the first time, and urban dwellers passed rural dwellers for the first time. But I am starting to get ahead of myself, let’s look at how the human-made ecology of service system entities and value-cocreation mechanisms evolved over the last 10,000 years or 500 generations. The population of artifacts with written language on them takes off about 6000 years ago or about 300 generations ago (the yellow bar on the right). Expertise with symbols helped certain professions form – and the first computers were people writing and processing symbols - scribes were required, another division of labor – so the service of reading and writing, which had a limited market at first began to emerge to help keep better records. Scribes were in many ways the first computers, writing and reading back symbols – and could remember more and more accurately than anyone else. Written laws (blue on right) that govern human behavior in cities takes off about 5000 years ago – including laws about property rights, and punishment for crimes. Shortly there after, coins become quite common as the first type of standard monetary and weight measurement system (green on right). So legal and economic infrastructure for future service system entities come along about 5000 years ago, or 250 generations ago, with perhaps 2% of the population living in cities…. (historical footnote: Paper money notes don’t come along much until around about 1400 years ago – bank notes, so use of coins is significantly older than paper money, and paper money really required banks as service system entities before paper money could succeed.). About 50 generations ago, we get the emergence of another one of the great types of service system entities – namely universities (light blue line) – students are the customers, as well as the employers that need the students. Universities help feed the division of labor in cities that needed specialized skills, including the research discipline skills needed to deepen bodies of knowledge in particular discipline areas. The red line indicates the population of printing presses taking off in the world, and hence the number of books and newspapers. This was only about 500 years or 25 generations ago. Now university faculty and students could more easily get books, and cities began to expand as the world’s population grew, and more cities had universities as well. The black line indicates the beginning of the industrial revolution about 200 years ago, the sream engine, railroads, telegraph and proliferation of the next great type of service system entity – the manufacturing businesses - that benefited from standard parts, technological advances and scale economies, and required professional managers and engineers. About 100 years ago, universities began adding business schools to keep up with the demand for specialized business management skills, and many new engineering disciplines including civil engineering, mechanical engineering, chemical engineering, and electrical engineering, fuel specialization and division of labor. By 1900, just over 100 years ago, or 5 generations ago 10% of the worlds population, or about 200 million people were living in cities and many of those cities had universities or were starting universities. Again fueling specialization, division of labor, and the growth of service as a component of the economy measured by traditional economists. Finally, just 60 years ago or 3 generations ago, the electronic semiconductor transistor was developed (indicated by the olive colored line on the right), and the information age took off, and many information intensive service activities could now benefit from computers to improve technology (e.g., accounting) and many other areas. So to recap, cities are one of the oldest and most important type of service system and universities are an important and old type of service system, as well as many types of businesses. Service science is the study of service system entities, their abundance and distribution, and their interactions. Division of labor is one of the most important types of value cocreation mechanisms, and people often need specialized skills to fill roles in service systems. Service science like ecology studies entities and their interactions over successive generations. New types of human-made service system entities and value-cocreation mechanisms continue to form, like wikipedia and peer production systems. Age of Unvierse (Wikipedia) The age of the universe is the time elapsed between the Big Bang and the present day. Current theory and observations suggest that the universe is 13.75 ±0.17 billion years old. [1] Age of Sun The Sun was formed about 4.57 billion years ago when a hydrogen molecular cloud collapsed. [85] Solar formation is dated in two ways: the Sun's current main sequence age, determined using computer models of stellar evolution and nucleocosmochronology , is thought to be about 4.57 billion years. [86] This is in close accord with the radiometric date of the oldest Solar System material, at 4.567 billion years ago. [87] [88] Age of Earth The age of the Earth is around 4.54 billion years (4.54 × 109 years ± 1%). [1] [2] [3] This age has been determined by radiometric age dating of meteorite material and is consistent with the ages of the oldest-known terrestrial and lunar samples . The Sun , in comparison, is about 4.57 billion years old , about 30 million years older. Age of Bacteria (Uni-cellular life) The ancestors of modern bacteria were single-celled microorganisms that were the first forms of life to develop on earth, about 4 billion years ago. For about 3 billion years, all organisms were microscopic, and bacteria and archaea were the dominant forms of life. [22] [23] Although bacterial fossils exist, such as stromatolites , their lack of distinctive morphology prevents them from being used to examine the history of bacterial evolution, or to date the time of origin of a particular bacterial species. However, gene sequences can be used to reconstruct the bacterial phylogeny , and these studies indicate that bacteria diverged first from the archaeal/eukaryotic lineage. [24] The most recent common ancestor of bacteria and archaea was probably a hyperthermophile that lived about 2.5 billion–3.2 billion years ago. [25] [26] Cities (Wikipedia) Early cities developed in a number of regions of the ancient world. Mesopotamia can claim the earliest cities, particularly Eridu, Uruk, and Ur. After Mesopotamia, this culture arose in Syria and Anatolia, as shown by the city of Çatalhöyük (7500-5700BC). Writing (Wikipedia) Writing is an extension of human language across time and space. Writing most likely began as a consequence of political expansion in ancient cultures, which needed reliable means for transmitting information, maintaining financial accounts, keeping historical records, and similar activities. Around the 4th millennium BC, the complexity of trade and administration outgrew the power of memory, and writing became a more dependable method of recording and presenting transactions in a permanent form [2] . In both Mesoamerica and Ancient Egypt writing may have evolved through calendrics and a political necessity for recording historical and environmental events. Written Law (Wikipedia) The history of law is closely connected to the development of civilization . Ancient Egyptian law, dating as far back as 3000 BC, contained a civil code that was probably broken into twelve books. It was based on the concept of Ma'at , characterised by tradition, rhetorical speech, social equality and impartiality. [81] [82] By the 22nd century BC, the ancient Sumerian ruler Ur- Nammu had formulated the first law code , which consisted of casuistic statements ("if ... then ..."). Around 1760 BC, King Hammurabi further developed Babylonian law , by codifying and inscribing it in stone. Hammurabi placed several copies of his law code throughout the kingdom of Babylon as stelae , for the entire public to see; this became known as the Codex Hammurabi . The most intact copy of these stelae was discovered in the 19th century by British Assyriologists, and has since been fully transliterated and translated into various languages, including English, German, and French. [83] Money (Wikipedia) Many cultures around the world eventually developed the use of commodity money . The shekel was originally both a unit of currency and a unit of weight. [10] . The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money – usually, the shell of the money cowry ( Cypraea moneta ) were used. According to Herodotus , and most modern scholars, the Lydians were the first people to introduce the use of gold and silver coin . [11] It is thought that these first stamped coins were minted around 650–600 BC. [12] Universities (Wikipedia) Prior to their formal establishment, many medieval universities were run for hundreds of years as Christian cathedral schools or monastic schools ( Scholae monasticae ), in which monks and nuns taught classes; evidence of these immediate forerunners of the later university at many places dates back to the 6th century AD. [7] The first universities were the University of Bologna (1088), the University of Paris (c. 1150, later associated with the Sorbonne ), the University of Oxford (1167), the University of Palencia (1208), the University of Cambridge (1209), the University of Salamanca (1218), the University of Montpellier (1220), the University of Padua (1222), the University of Naples Federico II (1224), the University of Toulouse (1229). [8] [9] Printing and Books (Wikipedia) Johannes Gutenberg's work on the printing press began in approximately 1436 when he partnered with Andreas Dritzehn—a man he had previously instructed in gem-cutting—and Andreas Heilmann, owner of a paper mill. [34] However, it was not until a 1439 lawsuit against Gutenberg that an official record exists; witnesses' testimony discussed Gutenberg's types, an inventory of metals (including lead), and his type molds. [34]
  • In the Handbook of Service Science, and other publications, we have layed out the conceptual foundations of service science – the first approximation of terms we believe every service scientist should know… The world view is that of an ecology of service-system-entities. Ecology is the study of the populations of entities, and their interactions with each other and the environment Types of Service System Entities, Interactions, and Outcomes is what a service scientist studies. Service systems include: Person, Family/Household, Business, Citiy, Nation, University, Hospital, Call-Center, Data-Center, etc. – any legal entity that can own property and be sued We see that Resources (People, Technology, Information, Organizations) and Stakeholder (Customers, Providers, Authorities, Competitors) are part of the conceptual framework for service science.
  • In publications, we have also talked about foundational premises of service science, such as service system entities configure four type of resourves… Four key types of resources: People – example, a doctor or a nurse Technology – example, a computer or car, but can also be the environment, such as an agricultural-field or a coal-mine Organizations – example, IBM or a university like MIT or a government like the national government of Germany Shared Information – example, could be language, laws, measures, etc. Physicists resolve disputes about what is physical and non-physical Judges resolve disputes about rights, within their jurisdictions
  • Service system entities calculate value from multiple stakeholder perspectives Four Key Stakeholder Perspectives: P = Provider C = Customer A = Authority S = Substitute (Competitor)
  • Service system entities reconfigure access rights to resources by mutually agreed to value propositions Four key types of access rights: Owned Outright – buying a car or a house Leased/Contract – renting a car or hotel room Shared Access – most roads, the air, and common-pool-resources Privileged Access – your thoughts, governors access to the governor’s mansion, marriage, childbirth (follows from nature or roles)
  • Service system entities interact to create ten types of outcomes, which elaborates game theories four outcomes of a two player game, to reflect that even two players games take place in the context of four primary stakeholders – the customer, the provider, the authority, and the competitors. Normative – service systems judge each other and have expectations about expected and desired behaviors… (sometimes formalized as laws) The purpose of Service Systems is Value-Cocreation (North’s economic institutions, Barnard’s cooperative systems, Trist’s sociotechnical systems, Engelbart’s augmentation systems, Normann’s value creation systems, Malone’s coordination science, Flores, Williamson TCE/NIE/Contracting, etc.) Provider and client interact to co-create value Value is achieving desired change or the prevention/undoing of unwanted change Changes can be physical, mental, or social Value is in the eye of the beholder, and may include complex subjective intangibles, bartered – knowledge intensive trust matters transaction costs matter Boundary of service experience in space and time may be complex Service is value coproduction, or finding win-win interactions between a provide and a customer. If service is value coproduction, what is a service system? The simplest service system is a person (consumes and produces services), a business enterprise is also a service system (consumes and produces services), and a nation can be viewed as a service system (produces and consumes services). ------------------ Depending on time scale and outcome, both war and investment can be a lose-lose encounter.
  • Service system entities learn to systematically exploit info & tech Add Rickets “Reaching the Goal” for Internal-External-Interaction Constraints. Explain Incremental-Radical-Super-Radical in terms of units (scientific measurement) For more on Exploitation-Exploration see below.. http://sonic.northwestern.edu/wp-content/uploads/2011/03/Keynote-Watts_Collective_Problems.pdf Lavie D & L Rosenkopf (2006) BALANCING EXPLORATION AND EXPLOITATION IN ALLIANCE FORMATION, The Academy of Management Journal, 49(4). 797-818. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.123.8271&rep=rep1&type=pdf “ Pressures for exploration. Whereas inertia drives firms’ tendencies to exploit, absorptive capacity facilitates counter pressures by furnishing the mechanism via which firms can identify the need for and direction of exploratory activities. Exploration is guided not only by inventing but also by learning from others (Huber, 1991; Levitt & March, 1988) and by employing external knowledge (March & Simon, 1958). Absorptive capacity, defined as the ability to value, assimilate, and apply external knowledge (Cohen & Levinthal, 1990), helps firms identify emerging opportunities and evaluate their prospects, thus enhancing exploration. It adjusts firms’ aspiration levels, so that they become attuned to learning opportunities and more proactive in exploring them. Indeed, prior research has demonstrated how absorptive capacity enhance organizational responsiveness and directs scientific and entrepreneurial discovery (Deeds, 2001; Rosenkopf & Nerkar, 2001). It also increases the likelihood of identifying external opportunities and can therefore lead to exploration in one or more domains of alliance formation.” For more on Run-Transform-Innovate see below… When I asked how he measures the performance and effectiveness of IBM's IT team, Hennessy pointed to its "run-to-transform" ratio. IBM's IT department is divided into three groups: a "run" organization that's responsible for keeping systems running smoothly; a "transform" team focused on business-process simplification and other business transformation; and an "innovate" unit that pursues leading-edge technology initiatives. Hennessy reports to Linda Sanford, IBM's senior VP of on-demand transformation and IT. Practicing what it preaches, IBM doesn't think of its IT organization as being merely an IT department. "We call it BT and IT," Hennessy says, giving business transformation equal billing to the software, systems, and services side of its mission. http://www.informationweek.com/blog/main/archives/2009/04/ibm_cio_turns_d.html IBM CIO's Strategy: Run, Transform, Innovate Posted by John Foley on Apr 30, 2009 11:05 AM Like other CIOs, IBM's Mark Hennessy knows that a dollar saved on data center operations is a dollar earned for business-technology innovation. IBM has moved the dial on its IT budget 10 percentage points toward innovation in recent years, and Hennessy says there are still more operational efficiencies to be gained.I sat down with Hennessy for more than an hour recently in New York to talk about how he has adapted to being a CIO. A 25-year IBM veteran, he took over as CIO about 18 months ago, having spent most of his career on the business side, in sales, marketing, finance, and, most recently, as general manager of IBM's distribution sector, which works with clients in the retail, travel, transportation, and consumer products industries. Hennessy's IT team supports the company's strategy in three broad ways: by running and optimizing IBM's internal IT operations, by working with IBM business units in support of their objectives, and by facilitating company-wide collaboration, innovation, and technology requirements across 170 countries. In times past, IBM had as many as 128 different CIOs across its businesses. These days--in support of CEO Sam Palmisano's strategy of establishing a global, integrated enterprise--it has only one, and Hennessy is it. When I asked how he measures the performance and effectiveness of IBM's IT team, Hennessy pointed to its "run-to-transform" ratio. IBM's IT department is divided into three groups: a "run" organization that's responsible for keeping systems running smoothly; a "transform" team focused on business-process simplification and other business transformation; and an "innovate" unit that pursues leading-edge technology initiatives. A few years ago, IBM was spending 73% of its IT budget on keeping systems and services running and 27% on innovation. This year, its run-to-transform ratio will hit 63%-37%. Roughly speaking, IBM is shifting an additional 2% of its IT budget from run to innovation each year, and Hennessy has every expectation that his group will continue moving the ratio in that direction. "I don't see an end in sight," he says. In fact, Hennessy says that IBM's run-to-innovation ratio has improved more this year than last. "So it's actually accelerating for us," he says. Where do the efficiencies come from? The same place other CIOs find them. Server virtualization, data center consolidation (IBM has consolidated 155 data centers down to five), energy savings, applications simplification (from 15,000 apps to 4,500 apps), end user productivity, organizational collaboration, shifting skills globally, and business-process simplification. IBM has internal IT projects underway now in the areas of its supply chain, finance, workforce management, and order-to-cash processes. Hennessy reports to Linda Sanford, IBM's senior VP of on-demand transformation and IT. Practicing what it preaches, IBM doesn't think of its IT organization as being merely an IT department. "We call it BT and IT," Hennessy says, giving business transformation equal billing to the software, systems, and services side of its mission.
  • Also, recently in the Handbook of Service Science, in Spohrer and Maglio we describe the importance of symbol processing in service systems for the calculation and innovation of value cocreation opportunities… 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.
  • We can summarize these as the six foundational premises of service science, and empirical evidence for and against them can be marshaled… and studies are appearing that do just that…
  • There are many books to help teach aspects of service science, service system thinking, and stakeholder analysis Service Science Reading List – Many textbooks and reference-textbooks included: http://www.cob.sjsu.edu/ssme/refmenu.asp
  • The fundamental data on which service science is based is the study of diverse and complex service system entities – from people to businesses to hospitals to universities to on-line communities, etc. Formal service systems use contracts (to interact) to codified the value propositions Informal service systems use routines, promises, and ceremonies (to interact) to express the value propositions “ The process of scientific discovery is, in effect, a continual flight from wonder.” – Albert Einstein, Autobiographical Notes “ The goal of science is to make the wonderful and complex understandable and simple – but not less wonderful.” – Herb Simon, Sciences of the Artificial Physical Complex Systems Mental Complex Systems Social Complex Systems Wonderful Complex Systems “… from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.” – Charles Darwin Miller, John H. and Scott E. Page (2007) Complex Adaptive Systems: An Introduction to Computational Models of Social Life. Princeton University Press. Princeton, NY. “Adaptive social systems are composed of interacting, thoughtful (but perhaps not brilliant) agents. It would be difficult to date the exact moment that such systems first arose on our planet – but perhaps it was when early signal celled organisms began to compete with one another for resources or, more likely, much earlier when chemical interactions in the primordial soup began to self-replicate… What it takes to move from an adaptive systems to a complex adaptive system is an open question and one that can engender endless debate. At the most basic level, the field of complex systems challenges the notion that by perfectly understanding the behavior of each component part of a system we will then understand the system as a whole… The hope is that we can build a science of complexity (an obvious misnomer, given the quest for simplicity that drives the scientific enterprise, though alternative names are equally egregious).” (Pg. 3) Perspective is worth 100 IQ points – Alan Kay There is nothing so practical as a good theory - ? (the point is simply that complexity is relative to an entity trying to understand and predict some aspect of something) Intentional Systems Appreciative Systems Interpretive Systems/Hermeneutic System Symbolic Systems Physical Systems, Chemical Systems, Biological Systems Electronic Systems Neural Network Systems Networks Cultural Systems Learning Systems Planning Systems Forecasting Systems Enterprise Systems Control Systems System of Systems Living Systems Mental/Psychological System Computational Systems Multiagent Systems Market-Pricing Systems 1. Social Systems Human Systems/Sociotechnical Systems Human Cultures 2. Political Systems Governed Systems Value Systems 3. Economics Systems Markets and Organizations Firms or Hierarchies Economic Institutions Gray Markets 4. Legal Systems Legislative, Judicial, Executive Separation 5. Organizational Systems Managed Systems Open Source Communities 6. Information Systems Linguistic Systems Mathematical Systems Physical Symbol Systems 7. Engineered Systems Technological Systems Designed Systems 8. Ecological Systems Evolved Systems Nature’s Services
  • If you haven’t seen it look for high tech car factory video …
  • We also know that some people have questioned the sharp distinction that economists have made, and instead prefer the notion of product-service system…. Also, more and more product businesses, those in both manufacturing, mining, agriculture, are increasingly part of value networks and service chains that require thinking about service innovation. All businesses have both a front-stage (direct customer contact) and a back-stage (no-direct customer contact)… so the distinction between product businesses and service businesses is disappearing, and more and more people talk about product-service-systems or service-system-entities. The point is simply that as more of the world lives in cities, and as more product businesses see themselves as product-service-systems, the trend towards service is inexorable, and cannot be ignored in research and education. Academia has begun to study service both from a front-stage customer-interaction focus as well as a back-stage operational efficiciency focus. Service innovation and design impact both front-stage and back-stage, because when value chains and networks form, front-stage and back-stage are relative terms. The focus is on people, their capabilities (skills and competencies), their tools, and who and what they interact with most in value creation networks. Human-Capabilities-Tools- and-Interactions in Value Creation Networks Managers and Engineers from both Service and Product Businesses seeking to improve their business performance Academic Researchers from many disciplines and schools seeking funding, data sets, and access for both empirical studies and action research (design and interventions) to advance scientific knowledge and publish results in top journals Policy Makers and Concerned Citizens seeking to improve the performance of their governments and societal institutions Quality-of-Life including Quality of service to customers Quality of jobs to employees Quality of investment opportunities to stakeholders Sustainable Innovation People, Planet,Profits Should We, Can We, May We, Will We Surprisingly to some, the service science community includes managers and engineers from both service busineses and product businesses. Service businesses can learn a lot about operational efficiency from product businesses, and product businesses can learn a lot about customer value from service businesses. This is because as Harvard’s Theordore Leavitt observed in his famous 1974 paper, all businesses include some amount of front stage activities (direct customer contact) and some amount of back stage activities (no direct customer contact). In traditional service firms, the front stage dominates and in traditional product companies the back stage dominates, in terms of number of employees. In addition to Managers and Engineers from both Service and Produce Businesses, the service science commnuity also includes academic researchers from many disciplines and schools, including engineering schools, management schools, social science schools, and information schools. Furthermore, the service science community is not restricted to for-profit businesses and academics, the community also include government policy makers and concerned citizens seeking to improve the performance of government institutions and diverse types of non-profit organizations.
  • Super-Service: “Checkout Lines: Who Needs ‘Em?” http://www.youtube.com/watch?v=eob532iEpqk How can value be created in service interactions between entities? From the inside-out (provider-side), and from the outside in (customer side)… Given service innovation is different, with product and process innovation as sub-components, what kinds of people are needed to deliver and innovate service offerings? We asked ourselves this question back in 2004… and decided to take a look at IBMers educational degrees in different parts of our business… Larry Keeley, the President of Chicago-based Doblin, Inc., has constructed a very useful framework which he calls “The Ten Types of Innovation”. The Ten Types of Innovation include two “inside-out” categories – Process and Offering – each with sub-elements. There are also two “outside-in” offerings: Delivery and Finance. The inside-out perspective is similar to the traditional understanding of value chains. It asks, “What assets and/or core competencies does our firm have and what products or services can we produce with them?” Outside-in thinking inverts this traditional perspective, asking instead, “What do our customers want, and how can our firm construct new business models or a new ecosystem of partnerships or external relationships to deliver it to them?”
  • IBM Institute for Business Value study - Component business models: Making specialization real http://www-935.ibm.com/services/us/index.wss/ibvstudy/imc/a1017908?cntxt=a1005266 IBM Institute for Business Value study - Unlocking the value of account opening with component business modeling http://www-935.ibm.com/services/us/index.wss/ibvstudy/imc/a1002832?cntxt=a1000401 IBM Executive Brief - New competitive weapons in the insurance business: Insurance component business modeling http://www-935.ibm.com/services/us/index.wss/executivebrief/imc/a1011070%3fcntxt=a1005119 Eventually, our service scientist and service system engineers will have powerful tools we can only now just imagine. For example the Blue Gene super computer behind me, will be running simulations of IBM and our customers as interacting service system. A first step towards this long-term ambitious goal is our CBM tool work. For every industry the businesses are viewed as hundreds of interacting business components with associated KPI (key performance indicators)… The CBM tool (based on Eclipse and developed here at Almaden based on the PWC original methodology that did not have the tool) is already being used by thousands of strategy and change consultants around the world. Each of the business components generates an enormous amount of data. The next tool addresses that…. Value: CBM tool, in the hands of IBM strategy & change consultants, helps customer plan and execute changes to their business. Notice that these changes happen at the business services level (business), work practices (people & organizations), and of course the technical architecture level (engineering). Service scientists deep in one of these three areas, and with broad understanding and communication skills across them all, will be more effective at finding the right solutions.
  • Ultimately, to better understand the mechanisms of economic evolution, computer aided design systems and simulators will be needed.
  • I am working on what the transportation, communication, and energy costs are at each stage. 1. HG1: Human labor (transportation walking) 2. HG1: Human labor 3. Ag1: Human and animal labor (transportation riding) 4. Ag2: Human and animal labor 5. Manuf1: Water energy labor 6. Manuf1: Steam labor (railroad, telegraph) 7. Service1: Oil and natural gas energy labor (cars, telephone) 8. Service2: Electricity, and transistor mental labor (hybrid cars, air travel, internet) 9. Sustainable1: Solar energy labor (electric vehicles, telepresence, smart phones) 10. Sustainable2: Natural language processing mental labor (Watson) Consider criminals in each stage, so ten to consider… (type of competitor)
  • R&H/M&E/C&S = Retail & Hospitality/Media&Entertainment/Culture&Sports ICT = Information & Communication Technologies
  • Do we need PIS = Physical Information Systems, that have a memory for example, but maybe do not have symbolic processing capabilities? How is Facebook, LinkedIn, Twitter, Blogs, etc. part of the PSS for the SSE? How can the game be defined better so that Quality-of-Life and Value-Cocreation make more sense? How can an instance be created of a multigenerational example of the game? How can sustainale energy without the hot air play a role?
  • The lesson of history -- technologies underlie improved value creation mechanisms when combined with the right societal rules/incentives. Nonzero – summarizes all of human history, and is about win-win interactions (what “service science” calls value-cocreation mechanisms) Morals and markets – summarizes all of human history, and is about balancing what is good for individuals with what is good for the collective. Paul Romer’s Charter Cities video – summarizes the consequences of bad rules in recent history (Africa, North Korea, Haiti, etc.), and is about the need for the right rules and incentives, including rules to change rules (cities are the right size to experiment – Hong Kong, Singapore, etc.).
  • Example mission: Your city’s water usage has increased at twice the rate of population growth, and supplies are becoming tested (and possibly polluted by human activity); your municipality is losing as much as 40% of its water supply through leaky infrastructure; and your energy costs are steadily increasing. You must institute a Water Management System so you have accurate real-time data to make decisions on delivering the highest water quality in most economical way. http://www-01.ibm.com/software/solutions/soa/innov8/cityone/index.html
  • Where are the opportunities? Everywhere! IBM 2009 Annual Report – survey of smarter planet projects around the world…. But how do we involve universities more? How do we weave a “total solution” that includes universities in smarter city projects? What is the role of the university in creating a smarter city? In the continuous improvement of quality of life in cities? And aren’t universities really mini-cities within cities? … and on this Map of the World, in the 2009 IBM Annual report one can see a sampling of IBM Smarter Planet engagements around the world… working to improve the complete spectrum of system of systems… often with a focus on one system in one city… such as smarter energy in venezula or smarter medical research for healthcare in the US… some of these engagements include a partnership between the cities and universities – but much more opportunity exists… to help focus cities and universities, among others, on these opportunities… IBM and other organizations have begun to identify grand challenge problems…. For example, if you look at the IBM Smarter Planet website….
  • IBM gathers statistics related to the five 5 R’s on 5000 universities world wide… The best relations between IBM and universities involve what we call the five R’s – Research (or open collaborative research with a focus on grand challenge problems for business and society), Readiness (or skills), Recruiting (or jobs working on teams to building a smarter planet), Revenue (which is more and more about public-private partnerships that connect great universities and great cities), and Responsibility (where IBM employees share their expertise, time, and resources with universities – including IBM guest lecturing in courses or judging student competitions). About 15-20% of awards are in the analytics areas, and we see that growing to 25-33% this coming year and the future…. For more information: http://www.ibm.com/university Bay Area numbers… 300 fulltime hires in last five years 400 interns and co-ops students over 1000 employees who are alumni, between 2-10% executives over $3M in research and matching grant awards, over five times that in matching from government good customers of IBM
  • In IBM’s Global University Programs, we work with universities around the world, and we invest time and funds to improve global talent and infrastructure. The skills of people around the world The infrastructure, such as water, electricity, energy, transportation, around the world Human resources, or talent, can be improved through targeted projects. For example, we have research award, faculty award, and student award programs to fund research. We also have Academic Initiatives to help students learn skills they will need in industry. And we recruit students with the right skills and/or research background at IBM. Capital resources, or infrastructure, can be improved through targeted projects. For example, we work with education, industry, and government to establish cloud computing centers that provide improved infrastructure and access to computing resources. One way to think about the investments here is that if industry does well, the taxes allow government to support more education programs, if education improves then industry gets more talent so they can perform better, and the cycle repeats. Also, more and more of the university research is done in multidisciplinary research centers, like MIT’s Energy Initiative or UMichigans Transportation Research Institute. These research centers work on real world problems that are exactly the type of improvement projects that help improve infrastructure for transportation, elctric grid, water management, etc. This connects to IBM’s Smarter Planet initiative. Service science is the study of these complex system of systems that serve customers. Some people will recognize the 3 P’s of corporate social responsibility, or the triple bottom line, in this chart – People, Planet, and Profits. http://en.wikipedia.org/wiki/Triple_bottom_line Profit, People, Planet logo is from: http://www.sustainability-ed.org/assets/turbineLogo.gif
  • Both individual people and institutions/organizations are learning… this is the vision of the educational continuum… http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html
  • The mission of the Urban Service Systems Sustainability and Innovation Centers will be to increase understanding in three areas that can have a direct impact on quality of life in cities…. Holistic modeling, STEM Education Pipeline, and Entrepreneurship & Job Creation…. Area of Future Growth: Holistic Modeling and Analytics for Cities (Urban Service System Sustainability and Innovation Centers) Improve Input for this area: STEM (Science Technology Engineering and Mathematics) Education Pipeline, and Improve Output for this area: Jobs & Entrepreneurship Regarding quality of living and quality of infrastructure, Boston rated #33 in both rankings for 2009... http://www.mercer.com/qualityoflivingpr#Top_50_cities:_Quality_of_living What would it take to get Boston into the #1 position in both rankings? Also, of interest - ranking by population... http://www.mongabay.com/cities_pop_01.htm For truly large cities, Japan seems to do best in quality of living and quality of infrastructure.... Mercer evaluates local living conditions in all the 420 cities it surveys worldwide. Living conditions are analysed according to 39 factors, grouped in 10 categories: Political and social environment (political stability, crime, law enforcement, etc) Economic environment (currency exchange regulations, banking services, etc) Socio-cultural environment (censorship, limitations on personal freedom, etc) Health and sanitation (medical supplies and services, infectious diseases, sewage, waste disposal, air pollution, etc) Schools and education (standard and availability of international schools, etc) Public services and transportation (electricity, water, public transport, traffic congestion, etc) Recreation (restaurants, theatres, cinemas, sports and leisure, etc) Consumer goods (availability of food/daily consumption items, cars, etc) Housing (housing, household appliances, furniture, maintenance services, etc) Natural environment (climate, record of natural disasters)
  • … cities are a system of systems with dense population, which creates challenges and opportunities and even the potential for many new types of careers… some statistics… Demographic change: During the first decade of the 21 st century, for the first time in history, more than 50% of the world’s population live in cities and the urban population of all nations continues to grow. For developed nations, the urban population has reached 70% and continues to increase. Challenges: The negative impacts of urbanization are well known from traffic congestion, housing, clean water, and energy shortages, pollution, waste disposal costs, pandemic risks, high school drop-out rates, tax burden, and environmental stress (noise, lights at night, carcinogens, toxins, etc.). Opportunity: Cities may be the key building blocks for a sustainable planet, where innovations can quickly scale to impact the lives of millions of people. While technology will not be a panacea, rapidly advancing technology will offer new opportunities for efficiencies. Cities provide opportunities to more rapidly deploy and scale up advanced technologies to benefit the people living in a region. Careers: As urban sustainability and innovation projects increase in quantity, attractive long-term career paths will open up for students properly prepared. Examples: More US cities are adopting climate change action plans. PlaNYC (released 2007) has a focus initiatives that apply technology to reduce waste and continuously improve a long-term sustainability and quality of life roadmap for the city. In October 2009, 30 new initiatives to grow New York City’s green economy were announced by the mayor’s office, including an urban technology innovation center to promote smart building best practices and develop NYC’s green tech workforce. Without putting too fine a point on it, most of the really important grand challenges in business and society relate to improving quality of life. Quality of life is a function of both quality of service from systems and quality of opportunities (or jobs) in systems. We have identified 13 systems that fit into three major categories – systems that focus on basic things people need, systems that focus on people’s activities and development, and systems that focus on governing. IBM’s Institute for Business Value has identified a $4 trillion challenge that can be addressed by using a system of systems approach.
  • A growing number of cities are partnering with their local universities to address their grand challenge problems and to improve quality of life through investments in smarter systems and modern service… To understand how universities can respond and help cities, it is important to understand that universities are mini-cities (system of systems) – with their own operations and challenges. Cities are important building blocks in nations. Universities are important building blocks in cities.
  • At IBM, many of our employees work as part of project teams on innovation that matters to customers. The project teams include industry/system consultants, solution architects, project managers, sales teams, and many many specialists. Specialist (45% of IBM employees) can be technology specialists, industry specialists, academic discipline specialists, technicians, call center agents, software application specialists, data analytics experts, and more – what ever it takes to transform and innovate systems in business, government, education, healthcare, etc. About 60%, well more than half of IBM’s revenue comes from global business and technology service groups or GBS and GTS… this increase in business for IBM global service (IGS) groups is part of a bigger trend… ================== Consultant: Consultants have deep knowledge of customers. They help IBM customers realize business and societal benefits by helping them make faster, smarter decisions; reduce risks; leverage core competencies and increase return on investment (ROI). Consultants serve as effective business advisors; conduct research, data collection and analysis; and prepare, present and deliver recommendations and solutions to clients. Sales: Sales professionals are responsible for the sale and support of IBM solutions, services, products and offerings, including those from IBM Business Partners. These professionals are responsible for the overall business relationship with IBM's clients and sometimes specialize by industry, customer set, channel, brand, solution or offering. Architect: Defines, or architects, solutions to client business problems by applying reason through information technology. Much of the IT Architect's work is focused on the front end of the solution life cycle: listening to clients, understanding their business requirements and forming the structures of an information technology solution — an architecture. Project Manager: Leads and is accountable for the success of the project. Project managers are responsible for a variety of activities, including initializing and planning projects, developing project cost structure, tracking and reporting project deliverables, managing risk, managing contracts and applying project management processes and tools. Specialist: Specialists have deep knowledge of applications, industries, and types of models/data. Specialists develops proofs of concepts and complete systems., They design, develop, build, test and implement systems. Specialists are hands-on professionals who have in-depth understanding of products, offerings and services within their specialty. Members of this profession perform services for a fee, provide technical support for product sales or support IBM's internal infrastructure.
  • http://www.engineeringchallenges.org/ And the NAE’s Engineering Grand Challenge problems include – making solar energy economical – which fits into category 4. Smarter Energy… there are at least two NAE grand challenges that related to 10. Smarter Education systems – Advance personalized learning and Engineer the tools of scientific discovery… one might also want to include enhance virtual reality and reverse engineer the brain – and I included those under 5. Smarter Information systems… the point is that solving any one of these 14 NAE grand challenge problems has the potential to have significant impact on one or more of the 13 systems that we all depend on every day for quality of life… And so now would be a good time to say a little bit more about the component measurements and the challenges of defining quality of life…
  • KPIs = Key Performance Indicators, the measures of service system performance Focus on service system resources, access rights, stakeholders (value propositions), and measures (KPIs) Calculating ROI and Success Rate for an industrial service research group 4 outstanding at $100M each and 11 accomplishments at $10M each = $510M business impact result in 7 years 2 outstanding at $100M each and 9 accomplishments at $10M each = $290M business impact result in 6 years 290M/8x ROI = 36M of base funding for 210 Person-years (36M/210 = $172K/person base funding level) 210 person years over six years = 10,20,40,50,50,40 (in year one there were 10 people, in year two 20 people, in year 3 40 people, etc.) Accomplishments (12 PY, 3-5 person, 2-4 years) = expected 12 PY (4 x 3) Outstanding (24 PY additional, 6-10 persons, 2-4 years) = additional 24 PY (8 x 3) = +24 is 12+24 = 36 So 2 outstandings take 36 (36 PY) and 9 accomplishments 12 (12 PY) = 2 * 36 + 9 x 12 = 72 + 108 = 180 (one could ask if this double counts on outstandings, since it pre-supposes and earlier accomplishment – in fact most accomplishments have more than $100M impact, so this is OK). 180/210 = 0.86 = 86% success rate (a big debate in research organizations is what should the success rate be – 100% success rate probably implies you are not taking enough risk, so learning/returns will not be maximized long-term) (put another way – solving really, really hard problems is not 100% guaranteed, but if they are solved they can pay enormous dividends; sometimes more so than simpler problems to solve) CBM = Component Business Model (Models of over 70 industries, decomposed into 100-200 business components/service systems, with associated KPIs) IDG = Intelligent Document Gateway (Process improvement workbench - process automation, business rules engines, authoring capability, document scan capability, etc.) SDM = Solution Design Manager (complex service offerings delivered globally are hard to describe, cost, price, and allow teams to collaboratively develop and iterate) BIW = Business Insight Workbench (unstructured text analytics, data mining, structured analytics, automatic taxonomy, trend analysis, co-occurrence statistics, etc.) COBRA = Corporate Brand Reputation Analysis (data mine blogs and customer service data, etc. for insights) SIMPLE = Patent Analytics (data mine patents and technical publications, etc. for insights) IoFT = Impact of Future Technologies (future studies method to identify signposts, and data mine for trends, etc.)

Service science t shaped for smarter planet 20110727 v1 Service science t shaped for smarter planet 20110727 v1 Presentation Transcript

  • Service Science: T-Shaped Professionals to Help Build a Smarter Planet Dr. James (“Jim”) C. Spohrer [email_address] Innovation Champion and Director, IBM University Programs Worldwide IRSSM-2 at Yogyakarta, Indonesia July 27, 2011 500+ service science related courses and degree programs worldwide BREADTH DEPTH
  • Republic of Indonesia (indexmundi.com estimates)
    • Labor Force:116.5M
    • Labor Force by Sector: 48.9% service, 38.3% agriculture, 12.8% industry
    • GDP by Sector: 37.1% service, 16.5% agriculture, 46.4% industry
    • GDP: $1.03T (PPP), $706.7B (OER); GDP Growth Rate: 6.1%
    © worldatlas.com
  • Questions leaders of every region (nation, state, city) ask
    • How to create more and better jobs for their citizens?
      • higher skill
      • higher pay
    • How to shift more work activities from routine physical, mental, interactional activities to higher-skill, higher-value activities?
      • innovation (inventing best-practices, often from new ventures)
      • transformation (implementing best-practices)
    • How to invest in progress?
      • continuously improve infrastructure
      • continuously improve talent
    • 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
  • What are the benefits of more education? Of higher skills? … But it can be costly, American student loan debt is over $900M
  • What are the benefits of top-ranked universities? % WW GDP and % WW Top-500-Universities Strong Correlation (2009 Data): National GDP and University Rankings http://www.upload-it.fr/files/1513639149/graph.html
  • How are advanced technologies changing the mix of jobs? 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
  • What are T-shaped professionals? Ready for Life-Long-Learning Ready for T-eamwork Ready 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 (analytic thinking & problem solving) Deep in one system (analytic thinking & problem solving) Many multi-cultural-team service projects completed (resume: outcomes, accomplishments & awards) BREADTH DEPTH
  • What is a Smarter Planet? 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
  • Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis) 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 Industry Business Support IT Systems Energy Resources Machinery Materials Trade Legend for system inputs Note: 1. Size of bubbles represents systems’ economic values 2. Arrows represent the strength of systems’ interaction Source: IBV analysis based on OECD This chart shows ‘systems‘ (not ‘industries‘)  Our planet is a complex system-of-systems 1 Tn
  • Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated 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 Global economic value of $4 Trillion 7% of WW 2008 GDP Improvement potential $15 Trillion 28% of WW 2008 GDP Inefficiencies $54 Trillion 100% of WW 2008 GDP System-of-systems System inefficiency as % of total economic value Improvement potential as % of system inefficiency Education 1,360 Building & Transport Infrastructure 12,540 Healthcare 4,270 Government & Safety 5,210 Electricity 2,940 Financial 4,580 Food & Water 4,890 Transportation (Goods & Passenger) 6,950 Leisure / Recreation / Clothing 7,800 Communication 3,960 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‘)
  • Quality-of-Life measures improve Education system transfers and expands body-of-knowledge
    • 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 2/7/4 2/1/1 7/6/1 1/1/0 5/17/27 1/0/2 24/24/1 2/20/24 7/10/3 5/2/2 3/3/1 0/0/0 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)”
  • What is service science? A service system? The ABC’s? Economics & Law Design/ Cognitive Science Systems Engineering Operations Computer Science/ Artificial Intelligence Marketing “ a service system is a human-made system to improve provider-customer interactions and value-cocreation outcomes, studied by many disciplines, one piece at a time.” “ service science is the transdisciplinary study of service systems & value-cocreation” The ABC’s: The provider (A) and a customer (B) transform a target (C)
  • Systems-Disciplines Matrix: Schematic Overview
    • Systems
      • Flows
        • E.g., Transportation
      • Human Development
        • E.g., Health
      • Governance
        • E.g., National-level
    • Disciplines
      • Stakeholder-focus
        • E.g., Customer = marketing
      • Resource-focus
        • E.g., Technology = engineering
      • Change-focus
        • E.g., History = economics
      • Value-focus
        • E.g., Innovation = entrepreneurship
    Stakeholders Resources Change Value Flows Human Development Governance Governance
  • Systems-Discipline Matrix: More Detail disciplines systems Systems that focus on flows of things Systems that govern Systems 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 city secure state scale nation laws 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 stakeholders Customer Provider Authority Competitors resources People Technology Information Organizations change History (Data Analytics) Future (Roadmap) value Run Transform (Copy) Innovate (Invent) Starting Point 1: Observing the Stakeholders (As-Is) Starting Point 2: Observing their Resources & Access (As-Is) Change Potential: Thinking (Has-Been & Might-Become) Value Realization: Doing (To-Be)
  • Proposed Guidelines
    • Please send feedback to Wendy Murphy
      • [email_address]
    • Help us devise better ways to visualize scope of service science
    • For use with:
      • Students
      • Faculty
      • Practitioners
      • Policy-makers
      • Scientists & Engineers
      • Government officials
  • 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
  • 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 Mathematics See 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
    Systems that focus on Governing Systems that focus on Human Activities and Development Systems that focus on Flow of things
  • The New Normal: Smarter Systems Computational System Building Smarter Technologies Requires investment roadmap Service Systems: Stakeholders & Resources 1. People 2. Technology 3. Shared Information 4. Organizations connected by win-win value propositions Building Smarter Universities & Cities Requires investment roadmap
  • IBM operates in 170 countries around the globe IBM has 425,000 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
  • IBM Centennial: Icon of Progress
  • Revisiting the questions leaders ask…
    • How to create more and better jobs for their citizens?
      • higher skill
      • higher pay
    • How to shift more work activities from routine physical, mental, interactional activities to higher-skill, higher-value activities?
      • innovation (inventing best-practices, often from new ventures)
      • transformation (implementing best-practices)
    • How to invest in progress?
      • continuously improve infrastructure
      • continuously improve talent
    • 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
  • Overview: Elements of Interest Policies & Investments Run-Transform-Innovate Governance Frameworks Theories Models Sept 27 th Workshop at IBM Almaden Infrastructure & Environment (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) Infrastructure (Technologies Deployed) Individuals & Certified Competences (Skills) Institutions & Roles (Jobs) Information, Quality-of-Life Demographics (Careers) Region 1 Region 2 Future Present History Policies & Investments Run-Transform-Innovate Governance Policies & Investments Run-Transform-Innovate Governance Policies & Investments Run-Transform-Innovate Governance Policies & Investments Run-Transform-Innovate Governance
  • Understanding Service Science
    • Stimulus: Service Growth
      • The World
      • IBM
    • Response: Service Science
      • Cambridge University Report
      • Arizona State University Report
    • Focus: Understand Service Systems
      • Service systems thinking: The ABC’s
      • Service systems dynamics: Four drivers of change
      • Service systems re-design: Example
      • Future: Holistic Product-Service Systems
        • Agriculture as local manufacturing (robotic factories)
        • Manufacturing as a local recycling service
        • An ecology of nested, networked holistic product-service systems
  • Growth of Service in National Economies Daryl Pereira/Sunnyvale/IBM@IBMUS, Parallels the growth of cities and the digital knowledge economy High Talent Individuals High Tech Infrastructure 42% 64 33 3 1.4 Germany 37% 26 11 63 2.1 Bangladesh 19% 20 10 70 1.6 Nigeria 45% 67 28 5 2.2 Japan 64% 69 21 10 2.4 Russia 61% 66 14 20 3.0 Brazil 34% 39 16 45 3.5 Indonesia 23% 76 23 1 5.1 U.S. 35% 23 17 60 14.4 India 142% 29 22 49 25.7 China 40yr Service Growth S % G % A % Labor % WW Nation World’s Large Labor Forces A = Agriculture, G = Goods, S = Service 2010 2010 NationMaster.com, International Labor Organization Note: 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 systems that create benefits for customers and sustainably improve quality of life.
  • 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
  • Stakeholder Priorities 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 Science To discover the underlying principles of complex service systems Systematically create, scale and improve systems Foundations laid by existing disciplines Progress in academic studies and practical tools Gaps in knowledge and skills 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 Skills & Mindset Knowledge & Tools Employment & Collaboration Policies & Investment Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015 Encourage an interdisciplinary approach The white paper offers a starting point to - The Birth of Service Science: 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
  • Priorities: Research Framework for the Science of Service (2010) Source: Global Survey of Service Research Leaders (Ostrom et al 2010) Pervasive Force: Leveraging Technology to Advance Service Strategy Priorities Execution Priorities Fostering Service Infusion 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 and Optimizing the Value of Service Development Priorities
  • Service Systems Thinking: ABC’s
    • 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
    • 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.”
  • 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.)
  • 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 different Service 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
  • Future: Holistic Product-Service Systems & Regional Innovation Ecosystems http://www.service-science.info/archives/1056
    • Examples: Nations, States, Cities, Universities, Luxury Hotels, Cruise Ships, Households
    • “ Whole Service” Subsystems: Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.
    • Definition: A service system that can support its primary populations, independent of all external service systems, for some period of time, longer than a month if necessary, and in some cases, indefinitely
    • Balance independence with interdependence, without becoming overly dependent (outsourcing limits, maximum re-cycling for sustainability)
    ~25-50% of start-ups are new IT-enabled service offerings SaaS PaaS IaaS http://www.thesrii.org Nation State/Province City/Region Hospital Medical Research University Colleges K-12 Luxury Resort Hotels Family (household ) Person (professional ) For-profits Non-profits Start-Ups New Ventures
  • 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
  • Universities connect innovation flows between Regions (“High Speed Bus”)
    • World as System of Systems
    • World (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)
    IBM UP WW: Tandem Awards: Increasing university linkages (knowledge exchange interactions) Developed Market Nations (> $20K GDP/Capita) Emerging Market Nations (< $20K GDP/Capita)
  • University Trend: Shift to e-Learning and IC U-BEEs
    • University sub-systems
    • Disciplines in Schools (circles)
    • Innovation Centers (squares)
      • E.g., CMU Website (2009)
        • “ Research Centers: where it all happens – to solve real-world problems”
    • Disciplines in Schools
      • Award degrees
      • Single-discipline focus
      • Research discipline problems
      • More e-Learning
    • Innovation Centers (ICs)
      • Industry/government sponsors
      • Multi-disciplinary teams
      • Research real-world systems
      • U-BEEs:
      • University-Based Entrepreneurial Ecosystems
    D D D D D D Engineering School Social Sciences, Humanities Professional Studies Business School water & waste transportation health energy/grid e-government Science & Mathematics I-School Design food & supply chain
  • U-BEEs: University-Based Entrepreneurial Ecosystems Universities as “Living Labs” for Host Cities UNIVERSITIES: Research Centers & Real-World Systems CITIES/METRO REGIONS: Universities Key to Long-Term Economic Development
  • Edu-Impact.Com: Growing Importance of Universities with Large, Growing Endowments “ 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.”
  • 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
    • World Population & Service System Scaling: Quality-of-Life Measures
  • The need for efficiency in buildings is clear 2 nd Real estate is the 2 nd largest expense on the income statement. 50% Up to 50% of energy and water in buildings are often wasted. 2025 By 2025, buildings will be the #1 consumer of energy. 2x Data center energy use doubling every 5 years .
  • The benefits from improving building efficiency are real 18% rise in productivity Employee productivity increased up to 18% on average. 91% occupancy Higher building usage and re- up rates in smarter buildings. 40% reduction Energy usage reduced by up to 40% and maintenance cost 10-30%. 65% of occupants Willing to help make their workplace more environmentally responsible.
  • How does a building operate today? Building Systems Building & Communications Services Facilities Management Processes Interaction with Externalities Portfolio Estates Mgmt Occupancy Space Mgmt Waste Mgmt Trash/Water/Recycle Compliance Environmental reports Tenant Services Help Desk Asset Mgmt Lifecycle Building Services Maintenance Industry Specific Hospital, hotel, etc. Energy Use Passive/Active Fire Functionality checks, Detector service Water Smart Meters, Use / Flow Sensing HVAC Fans, Variable Air Volume, Air Quality Elevators Maintenance, Performance Access/Security Badge in, Cameras, Integration Perimeter, Doors, Floors, Occupancy Lighting Occupancy Sensing 24/7 Monitoring Condition Monitoring, Parking Lot Utilization Energy Smart Meters, Demand response Community Services Transportation, Traffic, Events Utilities Demand Mgmt, Cost Control Weather Current Predictions Emergency Services Alerts, Actions Commercial Potential Advertisement
    • Thank-You! Questions?
    Dr. James (“Jim”) C. Spohrer Director, IBM University Programs (IBM UP) WW spohrer@us.ibm.com “ 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
  • Time ECOLOGY 14B Big Bang (Natural World) 10K Cities (Human-Made World) sun (energy) writing (symbols and scribes, stored memory and knowledge) earth (molecules & stored energy) written laws (governance and stored control) bacteria (single-cell life) sponges (multi-cell life) money (governed transportable value stored value, “ economic energy”) universities (knowledge workers) clams (neurons) trilobites (brains) printing press (books) steam engine (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 (Є N ) of nested, networked Holistic-Product-Service-Systems (HPSS) 200M bees (social division-of-labor) 60 transistor (routine cognitive work)
  • 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
    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. 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
  • 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. . 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) Physical Not-Physical Rights No-Rights 2. Technology/ Environment Infrastructure 4. Shared Information / Symbolic Knowledge
    • People/ Individuals
    3. Organizations/ Institutions
  • 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. . Value propositions coordinate & motivate resource access 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) Strategic Sustainable 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) Regulated Compliance (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)
  • 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.)
    Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. . 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 A P C Competitor Provider Customer Authority value-proposition change-experience dynamic-configurations (substitute) time
  • 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
    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) lose-win (coercion) win-win (value-cocreation) lose-lose (co-destruction) win-lose (loss-lead) Win Lose Provider Lose Win Customer ISPAR descriptive model
  • Service system entities learn to systematically exploit technology: Technology can perform routine manual, cognitive, transactional work 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. 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”
  • 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.
  • Summary Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. . 5. Exploit information & technology 6. Physical-Symbol Systems Physical Not-Physical Rights No-Rights 2. Technology/ Infrastructure 4.. Shared Information
    • People/ Individuals
    3. Organizations/ Institutions 1. Dynamically configure resources (4 I’s) Model of competitor: Does it put us ahead? Will we? Strategic Sustainable Innovation 4.Competitor/ Substitutes Model of authority: Is it legal? May we? Regulated Compliance 3.Authority Model of self: Does it play to our strengths? Can we? Cost Plus Productivity 2.Provider Model of customer: Do customers want it? Should we? Value Based Quality 1.Customer Reasoning Questions Pricing Measure Impacted Stakeholder Perspective 2. Value from stakeholder perspectives S A P C 3. Reconfigure access rights 4. Ten types of outcomes (ISPAR)
  • 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
    • 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
  • 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.
  • What about advanced manufacturing? http://www.youtube.com/watch?v=nd5WGLWNllA
  • Rethinking “Product-Service Systems” F B Service System 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 Service Business Product Business Front-Stage Marketing/Customer Focus Back-Stage Operations/Provider Focus Based on Levitt, T (1972) Production-line approach to service. HBR. e.g., IBM e.g., Citibank “ Everybody is in service... Something is wrong… The industrial world has changed faster than our taxonomies.”.
  • Example Service Systems Innovation Framework “ The Ten Types of Innovation” by Larry Keeley, Doblin Inc. Innovate (inside and outside) systems that create value
  • Most Wanted: A CAD for Service System Design CBM: Component Business Model WBM and RUP: Work Practices & Processes SOA: Technical Service-Oriented Architecture Key Performance Indicators (KPIs) IBM IBV: Component Business Models IEEE Computer, Jan 2007
  • 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 10 6 ), (2010 10 9 ), (2020 10 12 ), (2030 10 15 ) …
      • - PC: (2000 10 3 ), (2010 10 6 ), (2020 10 9 ), (2030 10 12 ) …
  • 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/ Environmental Infrastructure 4. Shared Information 1. People/ Individuals 3. Organizations/ Institutions 1. Dynamically configure resources (4 I’s)
  • Life = Multiple Generations of Entities (200 years = 10 generations x 20 years) Pedagogy: Ten Social-Technological-Economic-Environmental-Political (STEEP) Stages Thought Experiment: Binary-Board-Space (Rule: Toggles Each Generation)
    • Hunter-Gatherer Knowledge-Value Economy 1
      • - 2K population (20 people/sq mile * 100 sq miles)
    • Transition Hunter-Gatherer Knowledge-Value Economy 2
      • - 4K population (40 people/sq mile * 100 sq miles)
    • Agricultural Knowledge-Value Economy 1
      • - 8K population (80 people/sq mile * 100 sq miles)
    • Transition Agricultural Knowledge-Value Economy 2
      • - 16K population (160 people/sq mile * 100 sq miles)
    • Manufacturing Knowledge-Value Economy 1
      • - 32K population (320 people/sq mile * 100 sq miles)
    • Transition Manufacturing Knowledge-Value Economy 2
      • - 64K population (640 people/sq mile * 100 sq miles)
    • Service-Information Knowledge-Value Economy 1
      • - 128K population (1,280 people/sq mile * 100 sq miles)
    • Transition Service-Information Knowledge-Value Economy 2
      • - 256K population (2,560 people/sq mile * 100 sq miles)
    • Sustainable-Innovation Knowledge-Value Economy 1
      • - 512K population (5,120 people/sq mile * 100 sq miles)
    • Transition Sustainable-Innovation Knowledge-Value Economy 2
      • - 1024K population (10,240 people/sq mile * 100 sq miles)
    • And beyond!
    10 miles In Use Recycle Rule: Toggles Each Generation
  • 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) water food/products energy ICT R&H/M&E/C&S finance health education governance transportation buildings/family Sector 1 city interconnect 11 Systems Sector 2 state interconnect Sector 3 nation interconnect Sector 4 continent interconnect High Talent Individuals High Tech Infrastructure Toggle each generation – 20 year cycle
  • 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
  • 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
  • Understanding the Human-Made World See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html Also see: Symbolic Species, Deacon Company of Strangers, Seabright Sciences of the Artificial, Simon
  • 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
  • Where are the opportunities? Everywhere!
  • 2011 Priorities Regions Readiness Recruiting Revenue Research 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
    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.)
    • 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)
    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) 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) Responsibility PRIORITY AREA
  • What We Do: The “6 R’s” (not to be confused with 3 R’s)
    • 1. Research
      • Awards focus on grand challenge problems and big bets
      • https://www.ibm.com/developerworks/university/research
    • 2. Readiness
      • Access to IBM tools, methods, and course materials to develop skills
      • https://www.ibm.com/developerworks/university/academicinitiative
    • 3. Recruiting
      • Internships and full-time positions working to build a smarter planet
      • http://www.ibm.com/jobs
    • 4. Revenue
      • Public-private partnerships build great universities and strengthen regions
      • http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html
    • 5. Regions
      • Regional innovation ecosystems – incubators, entrepreneurship, jobs
      • http://www.ibm.com/ibm/governmentalprograms/innovissue.html
    • 6. Responsibility
      • Community service provides access to expertise/resources
      • http://www.ibm.com/ibm/ibmgives/
    • 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
  • Vision for the Educational Continuum: Individuals & Institutions Learning The Educational Continuum http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html 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
    Continuing Education Higher Education Secondary School Primary School Workforce Skills Individuals Learning Continuum Institutions Learning Continuum Economic Sustainability
  • Priority 1: Urban Sustainability & Service Innovation Centers
    • A. Research: Holistic Modeling & Analytics of Service Systems
      • Modeling 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 & LLL
      • City 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 Creation
      • City modeling and intervention planning tools can engage university
      • students and build entrepreneurial skills
      • Grand challenge competitions can lead to new enterprises
    • A. Flow of things
      • 1. 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 resources
    • B. 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 education
    • C. Governing
      • 11. Cities : Security and tax burden
      • 12. States : Infrastructure maintenance and tax burden
      • 13. Nations : Justice system overburdened and tax burden
    Cities as Holistic Service Systems: All the systems Example: Singapore Population Challenges Careers Opportunities
  • Universities as Holistic Service Systems: All the systems
    • A. Flow of things
      • 1. 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.
  • University: The Heart of Regional Innovation Ecosystems School of Public Policy School of Engineering School of Business Mngmnt School of Medicine School of Education School of Architecture School of Urban Planning School of Hospitality School of Information School of Science & Arts University: The Heart of Regional Innovation Ecosystems Incubator & Start-Ups $ 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
  • Job Roles: University Research and Education
    • Water Supply
    • Transportation
    • Energy, Electric Grid
    • Cities, Buildings
    • Healthcare
    • Education/Government
    General Methods & Techniques Specific Technology SP Service Systems Cross Industry Skills Industry Specific Skills Job Roles Systems Engineering/ Analytics/BAO/SSME University Research fuels
    • Model Systems
    • Connect/capture Data
    • Integrate, Analyze
    • Improve, Automate
    • Optimize, Evolve
    Run Transform Innovate
    • Synapsense, SensorTronics
    • Infosphere Streams, ILOG, COGNOS
    • WS, Tivoli, Rational, DB2, etc.
    • BAO, Green Sigma
    Specialists Consultant Project Manager Sales Architect
  • Job Roles: IBM Building Smarter Enterprises & A Smarter Planet https://jobs3.netmedia1.com/cp/find.ibm.jobs/location/
    • 1. Consultant
    • (trusted advisor to customer)
    • a value proposition to address problems or opportunities and enhance value co-creation relationships
    • 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 that balances time, costs, skills availability, and other resources, as well as adaptive realization of plan
    • 3. Architect
    • (systems engineer, IT & enterprise architect)
    • An elegant solution design that satisfies functional and non-functional constraints across the system 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 Operations Administrative Services, Other, Marketing & Communications Finance, Supply Chain, Manufacturing, Human Resources, Legal, General Executive Management ~25%
    • IBM Employees
      • ~10% Consultant
      • ~10% Sales
      • ~5% Architect
      • ~5% Project Manager
      • ~45% Specialists
      • ~25% Enterprise Operations
    Project Mix From 90-10 to 80-20: B2B – Business to Business B2G – Business to Government
  • US National Academy of Engineering Grand Challenges
    • A. 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 & development
      • 6. 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 governance
      • 11. City & Security
      • Restore and improve urban infrastructure
      • Secure cyberspace
      • Prevent nuclear terror
      • 12. State /Region & Development
      • 13. Nation & Rights
  • 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)
      • 2. Create new offerings
      • 3. Improve insourcing, outsourcing, acquisitions, divestitures results
      • 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
      • 6. For all five of the above, increase publications and service system body-of-knowledge
  • 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)
  • Come visit IBM Almaden Research Center, San Jose, CA
    • July 2012
      • ISSS San Jose
      • HSSE San Francisco
      • SRII San Jose
    • More Information
      • Service-Science.info
      • Slideshare.net/spohrer
      • @JimSpohrer
      • [email_address]