2012 towards smarter services
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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
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Why have Services become Predominant?
Smarter Services
Need for tradein services
Productivity
Specialization
Complexity
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Economy has reached a New Era
Smarter Services
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
+ +
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The Nature of Innovation is Changing
Science
&
Technology
Business Models &
Processes
Smarter Services
People
&Culture
The marketplace requires innovation that combinespeople, technology and business value
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commoditization pressures
new/increased competition
global market opportunities
CEOs: Extent of fundamental
change needed over next two years
Moderate
Smarter Services
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
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smart objects
the connectedness of everything
supercomputing for everyone
Smarter Services
It’s time to take advantage of…
supercomputing for everyone
information put to work
collaboration & co-creation
the marketplace for expertise
the virtual corporation
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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
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- 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
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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
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Goods Vs Services Innovation
Smarter Services
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Service Marketing
Smarter Services
Courtesy: Fujitsu
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INTERFACEINTERFACE
T-shaped Adaptive Innovator
Smarter Services
Breadth
Social Science (People)
Management (Business)
Engineering (Technology)
Depth
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- Conversation Starter
1. 4Is
2. D4D – Design for Delight
3. I2I
Agenda - 2
Smarter Services
3. I2I
4. R=G; n=1
- TMTCu Ver.2
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Service User Experience Design – Honeycomb Model
Smarter Services
Courtesy: Semantic Studios
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Services Blueprint
Smarter Services
Courtesy: Spire
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Democratization of Design
Smarter Services
� 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
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- Conversation Starter
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
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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?
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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)
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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
sta
cle
s t
o I
mp
rov
ing
Cu
sto
me
r E
xp
eri
en
ce
Smarter Services
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
sta
cle
s t
o I
mp
rov
ing
Cu
sto
me
r E
xp
eri
en
ce
% of RespondentsSource: Forrester Research
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Services Innovation Framework
Smarter Services
“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.
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“Outside In” - Most Successful Areas for Services Innovation
Smarter Services
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Approach to Services Innovation
Smarter Services
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
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- Conversation Starter
1. 4Is
2. D4D
3. I2I
Agenda - 4
Smarter Services
3. I2I
4. R=G; n=1 – Business Model Innovation
- TMTCu Ver.2
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Smarter Services
Business Model Innovation
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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?
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DriveDrive excellence through Lean business processesexcellence through Lean business processes
Well established Social VisionWell established Social Vision
n=1; R=G
Smarter Services
Re
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= G
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Co
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tom
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ScalabilityScalability
Technology ArchitectureTechnology Architecture
OpenOpen doors in to doors in to Large OpportunitiesLarge Opportunities
NicheNiche
En
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En
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Ex
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Ex
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teg
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Inte
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Courtesy: CK Prahlad
Re
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= G
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to
co
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28 IIM-Udaipur 2012 Towards Smarter Services3 March 2012
- Conversation Starter
1. 4Is
2. D4D
3. I2I
Agenda
Smarter Services
3. I2I
4. R=G; n=1
- TMTCu Ver.2 – Too Much To Confuse You!!
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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
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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
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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
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Thank you!
Smarter Services
Zaheer N Travadi
IBM India General BusinessManager - Geo Expansion
Phone: 91-97404-00211
E-mail: zaheer.travadi@in.ibm.com
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