ijcss taiwan 20110526 v3
DESCRIPTION
service science, IJCSS, TaiwanTRANSCRIPT
© 2011 IBM Corporation
IBM University Programs World Wide (IBM UP)
Service Science: Progress & Directions
Dr. James (“Jim”) C. [email protected] Champion and Director, IBM University Programs WWIJCSSTaipei, Taiwan, May 26th, 2011
Working Together to Build a Smarter Planet
2 © 2011 IBM CorporationIBM UP (University Programs) WW
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
3 © 2011 IBM CorporationIBM UP (University Programs) WW
Outline Progress: What we know about service systems
– Stimulus: Service Growth & Product-Service Systems • The World & IBM
– Response: Service Science & Innovation Priorities• Cambridge University Report, UK Royal Society Report, Arizona State
University Report, Handbook of Service Science, Open Service Innovation, etc.
– Better Premises: Service systems premises (distill what we know)
Directions: Regional Innovation Ecosystems (Smarter Planet)
– Stimulus: In general, local optimization does not equal global optimizations
– Response: Holistic Service Systems & Entity Architecture (SOA)• Quality of Life: Our growing dependence on
networks of interconnected product-service systems– Local optimization does not equal global optimization– Local problems can cascade into global significance– Global competition for talent (“people vote with feet”)
– Better Tools: CAD Tool+ for Regional Innovation Ecosystems • How to visualize Service Science? Systems & Discipline Knowledge• What kind of tool(s)? Global, Real-time, CAD• Where is the “Real Science”? Evolution of hierarchical complexity
4 © 2011 IBM CorporationIBM UP (University Programs) WW
42%6433 3 1.4Germany
37%261163 2.1Bangladesh
19%201070 1.6Nigeria
45%6728 5 2.2Japan
64%692110 2.4Russia
61%661420 3.0Brazil
34%391645 3.5Indonesia
23%7623 1 5.1U.S.
35%23176014.4India
142%29224925.7China
40yr ServiceGrowth
S%
G%
A %
Labor% WW
Nation
World’s Large Labor ForcesA = Agriculture, G = Goods, S = Service
20102010
CIA Handbook, International Labor OrganizationNote: 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 systemsthat create benefits for customers
and sustainably improve quality of life.
Service Growth: The World
5 © 2011 IBM CorporationIBM UP (University Programs) WW
Rethinking “Product-Service Systems”F
B
ServiceSystem 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
ServiceBusiness
ProductBusiness
Front-Stage Marketing/Customer Focus
Back-Stage Operations/Provider Focus
Ba
sed
on
Le
vitt
, T
(1
97
2)
Pro
du
ctio
n-li
ne
ap
pro
ach
to
se
rvic
e.
HB
R.
e.g., IBM
e.g., Citibank
“Eve
ryb
od
y is
in s
erv
ice
...
So
me
thin
g is
wro
ng
…
Th
e in
du
stria
l wo
rld h
as
cha
ng
ed
fa
ste
r th
an
ou
r ta
xon
om
ies.
”.
6 © 2011 IBM CorporationIBM UP (University Programs) WW
High Tech Car Factory as a Product-Service Systemhttp://www.youtube.com/watch?v=nd5WGLWNllA
7 © 2011 IBM CorporationIBM UP (University Programs) WW
0
20
40
60
80
100
Year
Reven
ue (
$B
)
Services
Software
Systems
Financing
Service Growth: IBM
B2B Service Projects: IT (data center, call centers) & business process outsourcing/reengineering, systems integration, organizational change, etc.
What do IBM Service Professionals Do? Run things on behalf of customers,help Transform customers to adopt best practices, and Innovate with customers.
Revenue Growth by Segment
Also, see Chesbrough’s “Real Men Have Fabs” article – service strategy for manufacturers
© 2011 IBM Corporation
IBM University Programs World Wide (IBM UP)
StakeholderPriorities
Education
Research
Business
Government
StakeholderPriorities
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 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 existingdisciplines
Progress in academic studies and practical tools
Gaps in knowledge and skills
Service Science
To discover the underlying principles of complex service systems
Systematically create, scale and improve systems
Foundations laid by existingdisciplines
Progress in academic studies and practical tools
Gaps in knowledge and skills
Develop programmes & qualifications
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
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
Skills& Mindset
Knowledge& Tools
Knowledge& Tools
Employment& Collaboration
Employment& Collaboration
Policies & Investment
Policies & Investment
Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015
Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015
Encourage an interdisciplinary approach
Encourage an interdisciplinary approach
The white paper offers a starting point to -
The white paper offers a starting point to -
Priorities: Succeeding through Service Innovation - 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
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UK Royal Society Report (2009)http://royalsociety.org/Hidden-wealth-The-contribution-of-science-to-service-sector-innovation/
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Priorities: Research Priorities: Research Framework Framework
for the Science of Service for the Science of Service (2010)(2010)Pervasive Force: Leveraging Technology to Advance Service
Strategy Priorities
Execution Priorities
Fostering ServiceInfusion 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 andOptimizing the Value of
Service
Development Priorities
Source: Global Survey of Service Research Leaders (Ostrom et al 2010)
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Service Dominant Logic (SDL): Beneficial Worldview
Service is the application of competences for the benefit of another entity
Service is exchanged for service
Value is always co-created
Goods are one appliance for delivery of outcomes
All economies are service economies
All businesses are service businesses
Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68, 1 – 17.
Resource Integrator/Beneficiary
(“Firm”)
Resource Integrator/Beneficiary
(“Customer”)
Value
Co-
crea
tion
Value Configuration
Den
sity
“People do not really want a ¾” drill, they really want a ¾” hole.” - Leavitt
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Conceptual Framework
Resources: People, Technology, Information, Organizations Stakeholders: Customers, Providers, Authorities, Competitors Measures: Quality, Productivity, Compliance, Sustainable Innovation Access Rights: Own, Lease, Shared, Privileged
Ecology(Populations & Diversity)
Entities(Service Systems)
Interactions(Service Networks)
Outcomes(Value Changes)
Value Proposition (Offers/Reconfig/Incentives/Risks)
Governance Mechanism (Rules/Constraints/Penalties/Risks)
Access Rights(Relationships)
Measures(Rankings of Entities)
Resources(Roles in Processes, Specialization)
Stakeholders(Valuation Perspectives)
win-win
lose-lose win-lose
lose-win
Identity(Aspirations/Lifecycle/Risks)
Reputation(Opportunities/Variety/Risks)
prefer sustainable non-zero-sum
outcomes
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Service system entities configure four types of resources
First foundational premise of service science:
– Service system entities dynamically configurefour types of resources
– Resources are the building blocks of entity architectures
Named resources are:– Physical or – Not-Physical– Physicist resolve disputes
Named resources have:– Rights or– No Rights– Judges resolve disputes
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
Physical
Not-Physical
Rights No-Rights
2. Technology/Environment
4.. SharedInformation
1. People
3. Organizations
Formal service systems can contractInformal service systems can promise/commit
Trends & Countertrends (Evolve and Balance):Informal <> FormalSocial <> Economic
Political <> LegalRoutine Cognitive Labor <> Information TechnologyRoutine Physical Labor <> Mechanical TechnologyTransportation (Atoms) <> Communication (Bits)
Qualitative (Tacit) <> Quantitative (Explicit)
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Service system entities calculate value from multiple stakeholder perspectives
Second foundational premise of service science
– Service system entities calculate value from multiple stakeholder perspectives
– Value propositions are the building blocks of service networks
A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives of multiple stakeholders according to culturally determined value principles.
The four primary stakeholder perspectives are: customer, provider, authority, and competitor
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. .
Model of competitor: Does it put us ahead? Can we stay ahead? Does it differentiate us from the competition?
Will we?(invest tomake it so)
StrategicSustainable Innovation(Marketshare)
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 anddeliver it)
RegulatedCompliance(Taxes andFines)
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)
CostPlus
Productivity(Profit)
2.Provider
Model of customer: Do customers want it? Is there a market? How large? Growth rate?
Should we?(offer it)
ValueBased
Quality(Revenue)
1.Customer
ValuePropositionReasoning
BasicQuestions
PricingDecision
MeasureImpacted
StakeholderPerspective(the players)
Value propositions coordinate & motivate resource access
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Service system entities reconfigure access rights to resources by mutually agreed to value propositions
Third foundational premise of service science
– Service system entities reconfigure access rights to resources by mutually agreed to value propositions
– Access rights are the building blocks of the service ecology (culture and information)
Access rights– Access to resources that are
owned outright (i.e., property)– Access to resource that are
leased/contracted for (i.e., rental car, home ownership via mortgage, insurance policies, etc.)
– Shared access (i.e., roads, web information, air, etc.)
– Privileged access (i.e., personal thoughts, inalienable kinship relationships, etc.)
service = value-cocreationB2BB2CB2GG2CG2BG2GC2CC2BC2G***
provider resourcesOwned OutrightLeased/ContractShared Access
Privileged Access
customer resourcesOwned OutrightLeased/ContractShared Access
Privileged Access
OO
SA
PA
LC
OO
LC
SA
PA
S AP C
Competitor Provider Customer Authority
value-proposition change-experience dynamic-configurations
(substitute)
time
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Service system entities interact to create ten types of outcomes
Four possible outcomes from a two player game
ISPAR generalizes to ten possible outcomes
– win-win: 1,2,3– lose-lose: 5,6, 7, maybe 4,8,10– lose-win: 9, maybe 8, 10– win-lose: maybe 4
lose-win(coercion)
win-win(value-cocreation)
lose-lose(co-destruction)
win-lose(loss-lead)
Win
L
ose
Pro
vide
r
Lose WinCustomer
ISPAR descriptive model
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Service system entities learn to systematically exploit info & tech
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 bethe best,
learn fromthe rest”
“Doublemonetize,
internal winand ‘sell’ to
external”
“Try tooperateinside
thecomfortzone”
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.
18 © 2011 IBM CorporationIBM UP (University Programs) WW
Routine Manual and Routine Cognitive Jobs Go Away..
-10
-5
0
5
10
15
1969 1974 1979 1984 1989 1994 1999
Levy, F, & Murnane, R. J. (2004). The New Division of Labor:How Computers Are Creating the Next Job Market. Princeton University Press.
Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT)
Expert Thinking(deep)
Complex Communication(broad)
Routine Manual
Non-routine Manual
Routine Cognitive
Increasing usage of job descriptive terms
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Service system entities are physical-symbol systems
Service is value cocreation.
Service system entities reason about value.
Value cocreation is a kind of joint activity.
Joint activity depends on communication and grounding.
Reasoning about value and communication are (often) effective symbolic processes.
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Summary
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. .
Physical
Not-Physical
Rights No-Rights
2. Technology
4.. SharedInformation
1. People
3. Organizations
1. Dynamically configure resources
Model of competitor: Does it put us ahead?
Will we?StrategicSustainable Innovation
4.Competitor
Model of authority: Is it legal?
May we?RegulatedCompliance3.Authority
Model of self: Does it play to our strengths?
Can we?CostPlus
Productivity2.Provider
Model of customer: Do customers want it?
Should we?Value Based
Quality1.Customer
ReasoningQuestionsPricingMeasureImpacted
StakeholderPerspective
2. Value from stakeholder perspectives
S AP C
3. Reconfigure access rights
4. Ten types of outcomes (ISPAR)
5. Exploit information & technology
6. Physical-Symbol Systems
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Future Directions: Two big challenges
1. In general, OL ≠ OG
– In general, Local Optimization does not equal Global Optimization
– In nested, networked, complex human systems, careless local optimizations can degrade overall performance. However, perhaps for some entity architectures and rules the odds of global optimization from appropriate local optimizations can be increased. In this respect, are some entity architectures (ЄN) better than others?
2. In general, PRW ≠ PSD or PSS or PSC
– In general, A Real-World Problem does not equal a Single Discipline, System, or Culture Problem
– In nested, networked, complex human systems, solving a real-world problem only rarely equates to solving a single-discipline, single-system, or a single-culture problem. However, perhaps for an important set of real-world problems, some frameworks are better integrated across disciplines, systems, and cultures, and so do a better job generating valid, actionable recommendations for stakeholders. In this respect, are some frameworks (FN) better than others?
Spohrer, J, P Pichiocchi, C Bassano (2011) Three frameworks for service research: exploring multilevel governance in nested, networked systems. Naples Service Forum, Capri, Italy.
A B
Cupper(x) = 1
Clower(y) = y
x = % drivers on upper roady = % drivers on lower road
where x + y = 1Expected commute time = x*CU(x) + y*CL(y)
E(y) = (1-y)*1+y*yE(Selfish, y=1) = 0*1+1*1 = 1.0 hour
E(Random, y=0.5) =0.5*1+0.5*0.5 = 0.75 hoursSource: Roughgarden, 2005.
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Approach to second challenge: T-shaped people & SSME+D
Many disciplines(understanding & communications)
Many systems(understanding & communications)
Deep in one discipline
(an
alytic th
inkin
g &
pro
ble
m so
lving
)
Deep in one system
(an
alytic th
inkin
g &
pro
ble
m so
lving
)
Many team-oriented service projects completed(resume: outcomes, accomplishments & awards)
SSME+D = Service Science, Management, Engineering + Design
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What is a Service System? What is Service Science? …customers just name <your favorite provider> …researchers just name <your favorite discipline>
Economics & Law
Design/ Cognitive Science Systems
Engineering
OperationsComputer Science/
Artificial Intelligence
Marketing
“a service system is a human-made systemto improve customer-provider interactions,
or value-cocreation”
“service science isthe interdisciplinary study of
service systems &value-cocreation”
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How to visualize service science? The Systems-Disciplines MatrixSystems that focus on flows of things Systems that governSystems 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
citysecure
statescale
nationlaws
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
stake
holders Customer
Provider
Authority
Competitors
resources
People
Technology
Information
Organizations
change History
(Data Analytics)
Future(Roadmap)
value
Run
Transform(Copy)
Innovate(Invent)
Starting Point 1: The Stakeholders (As-Is)
Starting Point 2: Their Resources (As-Is)
Change Potential: Thinking (Has-Been & Might-Become)
Value Realization: Doing (To-Be)
disciplines
systems
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Job Roles: IBM Building Smarter Enterprises & A Smarter Planethttps://jobs3.netmedia1.com/cp/find.ibm.jobs/location/
1. Consultant(trusted advisor to customer)
- a value proposition to addressproblems or opportunities and
enhance value co-creationrelationships
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 thatbalances time, costs, skills availability,
and other resources, as well asadaptive realization of plan
3. Architect(systems engineer, IT & enterprise architect)
-An elegant solution design that satisfiesfunctional and non-functional
constraints across thesystem 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 OperationsAdministrative Services, Other, Marketing & Communications
Finance, Supply Chain, Manufacturing, Human Resources, Legal,
General Executive Management
~25%
IBM Employees1. ~10% Consultant2. ~10% Sales3. ~5% Architect4. ~5% Project Manager5. ~45% Specialists6. ~25% Enterprise Operations
Project Mix From 90-10 to 80-20:B2B – Business to BusinessB2G – Business to Government
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Approach to first challenge: Smarter Planet & SSME+D
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
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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 IndustryBusiness SupportIT SystemsEnergy ResourcesMachineryMaterials Trade
Legend for system inputsNote:1. Size of bubbles represents
systems’ economic values2. Arrows represent the strength of
systems’ interaction
Source: IBV analysis based on OECD
Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis)
This chart shows ‘systems‘ (not ‘industries‘)
Our planet is a complex system-of-systems
1 Tn
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Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated
Global economic value of
System-of-systems
$54 Trillion100% of WW 2008 GDP
Inefficiencies$15 Trillion28% of WW 2008 GDP
Improvement potential
$4 Trillion7% of WW 2008 GDP
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
System inefficiency as % of total economic value
Impr
ovem
ent
pote
ntia
l as
% o
f sy
stem
inef
ficie
ncy
Education1,360
Building & Transport Infrastructure
12,540
Healthcare4,270
Government & Safety5,210
Electricity2,940
Financial4,580
Food & Water4,890
Transportation (Goods & Passenger)
6,950
Leisure / Recreation /
Clothing7,800
Communication3,960
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‘)
15%
20%
25%
30%
35%
40%
15% 20% 25% 30% 35% 40% 45%
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What improves Quality-of-Life? Product-Service System Innovations
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
2/7/42/1/1
7/6/11/1/0
5/17/27
1/0/2
24/24/1
2/20/247/10/3
5/2/2
3/3/10/0/0
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)”
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Regional Innovation Ecosystems& Holistic Service Systems http://www.service-science.info/archives/1056
Examples: Nations, States, Cities, Universities, Luxury Hotels, Cruise Ships, Households
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
Nation
State/Province
City/Region
HospitalMedicalResearch
UniversityCollegesK-12
LuxuryResortHotels
Family(household)
Person(professional)
For-profits
Non-profits
Start-Ups
~25-50% of start-ups are newIT-enabled service offerings
SaaSPaaSIaaS
http://www.thesrii.org
Largest?Smallest?
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Corning: A Day Made of Glasshttp://www.youtube.com/watch?v=6Cf7IL_eZ38
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Luxury Hotels as Holistic Service Systems: All the systemshttp://www.youtube.com/watch?v=Hm7MeZlS5fo
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A. Flow of things1. 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 resourcesB. 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 educationC. 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
Example: Songdo
(~$35B/~8yrs)
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Universities as Holistic Service Systems: All the systems
A. Flow of things1. 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.
35 © 2011 IBM CorporationIBM UP (University Programs) WW
Universities & Regional Innovation Ecosystems (Data)% GDP and % Top-500-Universities
Japan
ChinaGermany
France
United KingdomItaly
Russia SpainBrazilCanada
IndiaMexico AustraliaSouth Korea
NetherlandsTurkey
Sweden
y = 0,7489x + 0,3534R² = 0,719
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6 7 8 9
% g
loba
l G
DP
% top 500 universities
Strong Correlation (2009 Data): National GDP and University Rankingshttp://www.upload-it.fr/files/1513639149/graph.html
36
University Trend: More Locally Connected Research Centers
University sub-systemsDisciplines in Schools (circles)Innovation Centers (squares)
E.g., CMU Website (2009)“Research Centers:where it all happens – to solve real-world problems”
Disciplines in SchoolsAward degreesSingle-discipline focusResearch discipline problems
Innovation Centers (ICs)Industry/government sponsorsMulti-disciplinary teamsResearch real-world systems
D
D
D
D
D
D
Engine
ering
Schoo
l
Social
Scie
nces
,
Human
ities
Professional
Studies
Business School
water & waste transportation
health energy/grid
e-government
Science &
Mathem
atics
I-School
Design
food & supply chain
37 © 2011 IBM CorporationIBM UP (University Programs) WW
University & Regional Innovation Ecosystems (Why?)
$
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
School ofPublic Policy
School ofEngineering
School ofBusinessMngmnt
School ofMedicine
School ofEducation
School ofArchitecture
School ofUrban
Planning
School ofHospitality
School ofInformation
School ofScience &
Arts
University:The Heart of
Regional InnovationEcosystems
Incubator& Start-Ups
38 © 2011 IBM CorporationIBM UP (University Programs) WW
UNIVERSITIES:Research Centers & Real-World Systems
CITIES/METRO REGIONS:Universities Key to Long-Term Economic Development
Accelerating Regional Innovation: Universities as “Living Labs” for Host Cities
39
Universities connect information flows between other HSS, cities, states, nations
World as System of SystemsWorld (light blue - largest)Nations (green - large)Regions (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)
Developed MarketNations
(> $20K GDP/Capita)
Emerging MarketNations
(< $20K GDP/Capita)
IBM UP WW: Tandem Awards: Increasing university linkages (knowledge exchange interactions)
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Need tool: Global Service Ecology Simulator, Dashboard, CAD Tool
2000 2010 2020 2030
Log Entities
6
9
12
15
Projected Simulation Capability
Earth Simulator
Universe Simulation Brain Simulation
Heart Simulation
Global Service Ecology Simulation – 2016?
Every decade both HPC and PC platforms increase complex simulation capabilities by 1000x.- HPC: (2000 106), (2010 109), (2020 1012), (2030 1015) …- PC: (2000 103), (2010 106), (2020 109), (2030 1012) …
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Growing Importance of HPC to Universities
HPC = High Performance Computing (2006 NSF Data)
$0
$20
$40
$60
$80
$100
$120
Fund
ing
in M
illio
ns o
f Dol
lars
$0
$20
$40
$60
$80
$100
$120
Fund
ing
in M
illio
ns o
f Dol
lars
Average NSF funding: $30,354,000
Average NSF funding: $7,781,000
95 of Top NSF-funded Universities with HPC 98 of Top NSF-funded Universities w/out HPC
With HPC Without HPC
Journal of Information Technology, Volume 10, Issue 2 (accepted) www.jiti.net
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Smarter = Sustainable Innovation (reduce waste, expand capabilities)
Computational System
Building Smarter TechnologiesRequires investment roadmap
Service Systems: Stakeholders & Resources
1. People 2. Technology3. Shared Information4. Organizations
connected by win-win value propositions
Building Smarter Universities & CitiesRequires investment roadmap
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The Future of the University
Problems– Input: Student quality
– Process: Faculty motivation
– Output: Industry fit
Augmentations– A: -20% eLearning certification
– B. +10% Faculty interest tuning
– C. +10% On-the-job skills tuning
Year 1: 20%
Year 2: 20%
Year 3: 20%
Year N: 20%
. . . . . . . .
After a decade the course may look quite differentService systems are learning systems: productivity, quality, etc.
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.
44
Time
ECOLOGY
14BBig Bang
(NaturalWorld)
10KCities
(Human-MadeWorld)
Sun
writing(symbols and scribes)
Earth
written laws
bacteria(uni-cell life)
sponges(multi-cell life)
money(coins)
universities
clams (neurons)trilobites (brains)
printing press (books)steam engine200M
bees (socialdivision-of-labor)
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transistor
Where is the “Real Science”?In the interdisciplinary sciences that study the natural and human-made worlds… Unraveling the mystery of evolving hierarchical-complexity in new populations…To discover the world’s structures and mechanisms for computing non-zero-sum
Value-CoCreation (VCC) Architectures & Holistic Service Systems (HSS)
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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
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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.”
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World Population & Product-Service System Scaling
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Thank-You! Questions?
Dr. James (“Jim”) C. SpohrerDirector, IBM University Programs (IBM UP) [email protected]
“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
49 © 2011 IBM CorporationIBM UP (University Programs) WW
Priority 1: Urban Sustainability & Service Innovation Centers
A. Research: Holistic Modeling & Analytics of Service SystemsModeling 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 & LLLCity 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 CreationCity modeling and intervention planning tools can engage university
students and build entrepreneurial skills
Grand challenge competitions can lead to new enterprises
50 © 2011 IBM CorporationIBM UP (University Programs) WW
PetCities = Petri-Dish Cities
waterfood
energycommunications
buildingsretail
financehealth
educationfamily
governance
sports
transportationopen space
Citizen Population: 10 billion people in totalHierarchical Scales: 10 continents with 10 nations with 10 states with 10 cities eachPetCities: Each city has 8 apartment buildings (orange) with 125 floorsApartments: Each floor has 1000 citizens, grouped into four 250-citizen neighborhoods
In-UseOccupied
De-constructionRe-construction
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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
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Population growth per hour in major cities
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Example: San Jose, California (USA)
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Regional Innovation Ecosystems: NY StateTop Employers (Healthy, Frugal, Wealthy, Innovative, Wealthy, Wise…)
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Understanding the Human-Made World
See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html
Also see: Symbolic Species, DeaconCompany of Strangers, SeabrightSciences of the Artificial, Simon
56 © 2011 IBM CorporationIBM UP (University Programs) WW
Well Being Index January 10, 2011
By Mark Whitehouse at [email protected]
One approach is to enhance GDP with other objective factors such as inequality, leisure and life expectancy. In a paper presented Saturday at the American Economic Association meeting, Stanford economists Peter Klenow and Charles Jones found that doing so can make a big difference.
Making everybody work 120 hours a week could radically boost a country's GDP per capita, but it wouldn't make people happier. Removing pollution limits could boost GDP per hour worked, but wouldn't necessarily lead to a world we'd want to live in.
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Why 13 types of service systems? K-12 STEM and the human-made world
“Imagine a better service system, and use STEM language to explain why it is better”STEM = Science, Technology, Engineering, and MathematicsSee 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 (Bio)
– 9 - Education & Work Life/Jobs & Entrepreneurship (Cogno)
– 10 – City (Government)
– 11 – State/Region (Government)
– 12 – Nation (Government)
– Higher Ed – T-shaped teamwork, deep & broad education
– Professional Life – T-shaped teamwork, series of projects
Systemsthat focus onGoverning
Systemsthat focus on
Human Activities andDevelopment
Systemsthat focus onFlow of things
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NAE’s Engineering Grand ChallengesA. 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 & development6. 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 governance11. City & Security
Restore and improve urban infrastructure
Secure cyberspace
Prevent nuclear terror
12. State/Region & Development
13. Nation & Rights
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Where are the opportunities? Everywhere!
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Vision for the Educational Continuum: Individuals & Institutions Learning
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
ContinuingEducation
HigherEducation
SecondarySchool
PrimarySchool
WorkforceSkills
Individuals Learning Continuum TheEducationalContinuum
Institutio
ns Learn
ing Contin
uum
EconomicSustainability
http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html
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People
“All the information workers observed experienced a high level of fragmentation in the execution of their activities. People averaged about three minutes on a task and about two minutes on any electronic device or paper document before switching tasks.”
– Gloria Mark and Victor M. Gonzalez, authors of “Research on Multi-tasking in the Workplace”
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Families
"The family is the natural and fundamental group unit of society and is entitled to protection by society and the State".
– Article 16(3) of the Universal Declaration of Human Rights
“Developing a Family Mission Statement”
– Stephen R. Covey, author of The 7 Habits of Highly Effective Families
“In the agricultural age, work-life-and-family blended seamlessly.”
– IBM GIO 1.0
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Hospitals
“Modern medicine is one of those incredible works of reason: an elaborate system of specialized knowledge, technical procedures, and rules of behavior.”
– Paul Starr, author of The Social Transformation of American Medicine
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Universities
“The contemporary American university is in fact a knowledge conglomerate in its extensive activities, and this role is costly to sustain.”
– Roger L. Geiger, author of Knowledge and Money: Research Universities and the Paradox of the Marketplace
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Cities
“Cities are the defining artifacts of civilisation. All the achievements and failings of humanity are here… We shape the city, and then it shapes us. Today, almost half the global population lives in cities.”
– John Reader, author of Cities
IBM Releases ``IBM and the Future of our Cities'' Podcast
– IBM Press Release 2005
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Businesses
“…of the 100 entities with the largest Gross National Product (GNP), about half were multi-national corporations (MNCs)… The MNCs do not exist on traditional maps.”
– Alfred Chandler and Bruce Mazlish, authors of Leviathans
“The corporation has evolved constantly during its long history. The MNC of the late twentieth century … were very different from the great trading enterprises of the 1700s. The type of business organization that is now emerging -- the globally integrated enterprise -- marks just as big a leap. “
– Sam Palmisano, CEO IBM in Foreign Affairs
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Call Centers
“Call Centers For Dummies helps put a value on customer relations efforts undertaken in call centers and helps managers implement new strategies for continual improvement of customer service.”
– Réal Bergevin, author of Call Centers For Dummies
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Data Centers
“All data centers are unique, but they all share the same mission: to protect your company’s valuable information.”
– Douglas Alger, author of Build the Best Data Center Facility for Your Business
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Nations
“Understanding economic change including everything from the rise of the Western world to the demise of the Soviet Union requires that we cast a net much broader than purely economic change because it is a result of changes in (1) the quantity and quality of human beings; (2) in the stock of human knowledge particularly as applied to human command over nature; and (3) the institutional framework that defines the deliberate incentive structure of a society.”
– Douglass C. North, author of Understanding the Process of Economic Change
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What happens when you take some of the nicotine out of cigarettes?
71
How do you create more lasting solutions?
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Pigou’s Example
The Lessons We Learn– Local Optimization
does not equalGlobal Optimization
– Selfish behavior need not produce a socially optimal outcome
“Selfish Entities”– all choose lower road, so travel
time is 1 hour for them all…– Entities all reason that if even
one other entity takes the upper road, it will be faster to take lower road
“Random Entities”– ½ choose upper and ½ choose
lower, so half of travel times are 1 hour, and the other half are just 0.5 hours on the less congested lower road…
– Rules (laws, incentives, etc.) can produce similar results byinfluencing reasoned behavior
A B
Cupper(x) = 1
Clower(y) = y
x = % drivers on upper roady = % drivers on lower road
x + y = 1Expected commute time =
x*1 + y*y
E(Selfish) = 1.0 hoursE(Random) = 0.75 hours
From: Roughgarden, T (2005) Selfish Routing and the Price of Anarchy. MIT Press. Cambridge, MA(commuters traveling from suburb (A) to city (B) can choose “the winding upper road which take an hour”
or they can choose “the highway lower road which takes time proportional to number of commuters”).
73 © 2011 IBM CorporationIBM UP (University Programs) WW
What would service scientists actually do?
Service scientist own the body of knowledge around service system problem solving
Service scientists identify a service system that needs improvement
Service scientists identify the stakeholders their concerns and perceived opportunities
Service scientists envision augmentations (additional new service systems) or reconfigurations (of old service systems components) that best address all problems and opportunities
– Identify year-over-year improvement trajectories
– Identify incentives to change (ROI, leadership, laws)
74
SSME: Service Science, Management, and Engineering
IBM Research © 2006 IBM Corporation
Under what conditions do value propositions exist between service systems to justify service for service exchanges?
Case 1 – complementary superior performance
Costs
A = 1 4, B = 3 2
Self Service
A: 10 + 40 = 50
B: 30 + 20 = 50
Over produce best by one and exchange
A: 11 + 36 = 47
B: 27 + 22 = 49
Case 2 – one with strictly superior performance, namely A
Costs
A = 1 2, B = 4 3
Self Service
A: 10 + 20 = 30
B: 40 + 30 = 70
Over produce best by one and exchange
A: 11 + 18 = 29
B: 36 + 33 = 69
Assume service system A and B (imagine two people, family-clans, cities, nations, or businesses) each produce two same kinds of service, each have demand for ten performances of the services each day, and each have different costs of producing the services for self-service consumption
Surprisingly, in Case 2, it still makes sense to exchange service for service as well! Of course, this ignores transaction costs associated with the exchange… What happens when the cost decreases with experience/learning/innovations? What about trading the skill to perform a service, rather than simply performances?
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SSME: Service Science, Management, and Engineering
IBM Research © 2006 IBM Corporation
Under what conditions are compliance laws innovative in a service system of selfish optimizers?
Pigou’s ExampleA population of commuters must drive from point A to point B. There are two roads. The first road always takes one hour. The second road takes time proportional to the amount of traffic (all = 1). If everyone takes the second road, the time is one hour. All drivers take the second road, it is never worse than one hour, and maybe better.
Braess’s ParadoxTwo roads with composed of two parts. First road has constant one hour plus one hour max if congested. Second road has one hour max if congested plus one hour. Traffic splits so everyone gets from point A to point B in 90 minutes. However, by adding a zero cost interchange connecting the two midpoints, now everyone takes the two connected congested routes, and now every takes 120 minutes!
A B
C(x) = 1
C(x) = x
A law that mandates odd and even license plates take different routeson different days, if backed up with sampling and tickets/fines, could yield better results.
76
How entities (service systems) learn and change over timeHistory and future of Run-Transform-Innovate investment choices
• Diverse Types– Persons (Individuals)
• Families– Regional Entities
• Universities• Hospitals• Cities• States/Provinces• Nations
– Other Enterprises• Businesses• Non-profits
• Learning & Change– Run = use existing
knowledge or standard practices (use)
– Transform = adopt a new best practice (copy)
– Innovate = create a new best practice (invent)
Transform
Innovate
Invest in each Invest in each type of changetype of change
Run
March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.
exploitexplore
77 © 2011 IBM CorporationIBM UP (University Programs) WW
Teaching SSME+D
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 ConstraintsBy John Ricketts, IBM
Service Management:Operations, Strategy,
and Information Technology
By Fitzsimmons and Fitzsimmons, UTexas
Service Is Front Stage:Positioning services for
value advantageBy James Teboul, INSEAD