2012 towards smarter services

2012 Towards Smater Services

Zaheer Travadi - IBM General Business Geo Expansion

Mar 03, 2012

IIM -UDAIPUR 2012

Views presented here are individual and may not be endorsed by IBM

Agenda

1. Conversation Starter

2. 4Is

3. D4D

Smarter Services

3. D4D

4. I2I

5. R=G; n=1

6. TMTCu Ver.2

2 IIM-Udaipur 2012 Towards Smarter Services3 March 2012

Why have Services become Predominant?

Smarter Services

Need for tradein services

Productivity

Specialization

Complexity


Economy has reached a New Era

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A SMARTER PLANETINSTRUMENTED

INTERCONNECTED

INTELLIGENT

PEOPLE

COMPANIES, INSTITUTIONS, INDUSTRIES

MAN-MADE SYSTEMS

NATURE’S SYSTEMSNATURE’S SYSTEMS

Network Ubiquity

More than a billion Internet users today

Open Standards

Widely-adopted technical and transaction specifications

New Business Designs

Horizontally-integrated operations

+ +


The Nature of Innovation is Changing

Science

&

Technology

Business Models &

Processes

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People

&Culture

The marketplace requires innovation that combinespeople, technology and business value


commoditization pressures

new/increased competition

global market opportunities

CEOs: Extent of fundamental

change needed over next two years

Moderate

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Enterprise Pressures & Opportunities

global market opportunities

adjacent market opportunities

global volatility & disruption

competing business models

65%13%

22%

A lot

Moderate

Little or no

IBM Global CEO Study 2006


smart objects

the connectedness of everything

supercomputing for everyone

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It’s time to take advantage of…

supercomputing for everyone

information put to work

collaboration & co-creation

the marketplace for expertise

the virtual corporation


products

services

business processes 35%

27%No Owner

CEOs’ View:Primary Responsibility for

Innovation Leadership

It’s time to innovate

Smarter Services

business processes

business models

management and culture

policy and society

35%CEOs/Leaders

24%Functional

Mgrs

14%Division

Mgrs

No Owner

IBM Global CEO Study 2006


- Conversation Starter

1. 4Is – The 4 Is of Services

2. D4D

3. I2I

Agenda - 1

Smarter Services

3. I2I

4. R=G; n=1

- TMTCu Ver.2


Goods Vs Services Innovation

� All the smart people in our field, work

for us

� To profit from R&D we must discover,

develop & distribute

� We have get to market first to win if

� We must collaborate with smart

people outside & inside

� We need not originate research to

benefit

� Building better business model more

Smarter Services

� We have get to market first to win if

we innovate

� We must control our IP and clearly

define our Firm’s boundaries

� Learn by “using” & “doing”

� Building better business model more

important than first to market

� We can profit from others’ use of our

IP and benefit from theirs

� Learn continuously through

Feedback loops and client linkages

Consumer Insight Consumer Experience


Goods Vs Services Innovation

Smarter Services


Service Marketing

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Courtesy: Fujitsu


INTERFACEINTERFACE

T-shaped Adaptive Innovator

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Breadth

Social Science (People)

Management (Business)

Engineering (Technology)

Depth



1. 4Is

2. D4D – Design for Delight

3. I2I

Agenda - 2

Smarter Services

3. I2I

4. R=G; n=1

- TMTCu Ver.2


Service User Experience Design – Honeycomb Model

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Courtesy: Semantic Studios


Services Blueprint

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Courtesy: Spire


Democratization of Design

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� Increasingly capable & cheaper tools that require less skill and training to use

� Make it easier for user-innovators to gain access to rich libraries of modifiable

components that have been placed in the public domain

– Today users design sophisticated new products, services, music and art

– Open source software movement

– Web 2.0 explicitly recognizes users add value



1. 4Is

2. D4D

3. I2I – Idea to Implementation

Agenda - 3

Smarter Services

3. I2I – Idea to Implementation

4. R=G; n=1

- TMTCu Ver.2


Deciding on your Services Innovation

1. Check for Heuristic Affect – Has the team fallen in love with its proposal?

2. Check for Groupthink – How were the dissenting opinions in the team handled?

3. Check for Saliency Bias – could the diagnosis be overly influenced by an analogy?

Smarter Services

4. Check for Confirmation Bias – Are credible alternatives proposed?

5. Check for Availability Bias – What if you had to make this decision later in time?

6. Check for Anchoring Bias – Do you know where the numbers came from?

7. Check for Halo Effect – Would a best practice replication be as successful?

8. Check for Sunk Cost Fallacy - Is the proposal based on a history of past decisions?


Typology of Services Innovation

Smarter Services

Business model

innovation:

Substantial

organizational

changes in how

Process/system

innovation:

Changes in how

information

exchanged between

Asset

innovation:

Introduction of

entirely new

services as an Asset

In reality all 3 are interrelated as an iterative process

changes in how

revenues and profits

are earned

exchanged between

customer and

service provider

services as an Asset

(service product)


Many efforts to transform services have often been hampered

Service Innovation Barriers

49%

49%

57%

60%

73%

Measuring customer experience

Defining our customer experience strategy

Trying to change employee behavior

Implementing technology

Getting alignment across organizations

Ob

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4%

16%

23%

27%

35%

38%

49%

0% 10% 20% 30% 40% 50% 60% 70% 80%

None of the above

Identifying our target customers

Trying to change customer behavior

Gaining executive commitment

Designing usable interfaces for customers

Understanding the needs of our customers

Measuring customer experience

Ob

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% of RespondentsSource: Forrester Research


Services Innovation Framework

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“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.


“Outside In” - Most Successful Areas for Services Innovation

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Approach to Services Innovation

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VentureCapitalists

ISVs BusinessPartners

University &

Academia

Thought Leaders

CommunityRelationships

Legal

Media

IT Analysts

Alumni

KeystoneClients

Organization

Relationships

CountryGeneralManagers

Investors

StandardsBodies

Gov’tPrograms

Multi-disciplinary

Globally Collaborative Open



1. 4Is

2. D4D

3. I2I

Agenda - 4

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3. I2I

4. R=G; n=1 – Business Model Innovation

- TMTCu Ver.2


Smarter Services

Business Model Innovation


Assessing current and desired positions to create path

High

Revenue Model

Moving from current to target position• Are there ways to reconfigure / re-

allocated sources of revenue in your

business?

• How can you sell elements of your

services / offerings differently?

• How can you reconfigure value

elements in your business?

• How can you leverage new /

emerging business models in your

industries? From other industries?

• How does new/emerging technology

change the parameters?

Smarter Services

Low

Industry Model Enterprise Model

• How can you select and leverage

unique assets & capabilities in your

business that provide competitive

differentiation?

• What should you do vs where should

you partner for optimal value?

change the parameters?

• Are you a leader of follower when it

comes to industry change?

Current Position

Target Position

Degree of Innovation

• How does the degree of innovation relate

to your industry? How will it change in the

future?

• Do you have the right balance?

Timing of Innovation

• Do you drive change in the industry, or is

it imposed on you? Lead vs follow?

• What are the disruptive technologies or

models emerging today?

BMI Path

• Which business model innovation paths

are we / should you explore?

• Which ones are most aligned with our

industry, capabilities, vision?


DriveDrive excellence through Lean business processesexcellence through Lean business processes

Well established Social VisionWell established Social Vision

n=1; R=G

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ScalabilityScalability

Technology ArchitectureTechnology Architecture

OpenOpen doors in to doors in to Large OpportunitiesLarge Opportunities

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Courtesy: CK Prahlad

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1. 4Is

2. D4D

3. I2I

Agenda

Smarter Services

3. I2I

4. R=G; n=1

- TMTCu Ver.2 – Too Much To Confuse You!!


Where does Six Sigma fall short in Services Innovation

Smarter Services

Six Sigma Thinking

1. Eliminate variability (reductive)

2. Eliminate waste

3. Minimize cost

Customer-Experience Led Innovation

1. Introduce variability when it creates

preference

2. Allow the customer to judge what is waste

3. Tolerate additional cost as when it creates a 3. Minimize cost

4. Map processes

5. Test hypotheses

6. Rely on large numbers to create certainty

7. Use process capability as final arbiter for

decision making

3. Tolerate additional cost as when it creates a

preference

4. Map customer journeys

5. Explore important questions to create new

hypotheses

6. Rely on numbers to uncover new possibilities

7. Use demonstrated customer behavior as the

final arbiter


Are there “scale laws” of service innovation?

� Moore’s Law underlies much of the information technology and business capability growth over the last half century.

Are there analogous “predictable capability doubling laws” that apply in the realm of services?

� It seems three improvement or learning curve laws that might be applicable in services:

1. The more an activity is performed (time period doubling, demand doubling) the more opportunities there are to

improve the process

2. The better an activity can be measured (sensor deployment doubling, sensor precision doubling, relevant

measurement variables doubling) and modeled the more opportunities there are to improve the process

3. The more activities that depend on a common process (doubling potential demand points), the more likely

investment can be raised to improve the process

Smarter Services

Example: Amazon’s Book Buying Recommendation Service Quality–The quality of the recommendations depends on accurate statistics – the more purchases made, the better the statistical estimates for recommendations

Example: Call Centers Query-Response Productivity and Quality–The speed and quality of call center responses can be improved significantly given accurate statistics about the kinds and number of queries that are likely to be received.

Example: New Service Offerings–The viability of new service offerings often depends on the scale (amount of demand) in adjacent market segments where service satisfaction is low enough to result in sufficient critical mass of defections to bootstrap the new offering.

Example: Predictable Education Gains (Student Knowledge, Teacher Satisfaction)–If eLearning can be used to shift 20% of routine teacher activities into automation that can be covered in half the normal time,freeing up 10% of teacher time each year to innovate and add new content or exploratory activities to the curriculum, then each year students will be learning more and teachers will have time to try new things


Andragogy from IBM

� IBM Institute for Business Value

– http://www.ibm.com/iibv

� IBM University

– http://www.ibm.com/university

� IBM Services Science Management & Engineering

– http://www.ibm.com/university/ssme

� IBM INNOV8 Game– http://www-01.ibm.com/software/solutions/soa/innov8/full.html

� IBM CityOne Game*– http://www.ibm.com/software/solutions/soa/innov8/cityone/index.jsp


Thank you!

Smarter Services

Zaheer N Travadi

IBM India General BusinessManager - Geo Expansion

Phone: 91-97404-00211

E-mail: [email protected]
