SSMED Emerging
Service Science,
Management,
Engineering, and
Design Emerging
Service Science and the Future Wealth of Nations
Jim Spohrer, Director, Service Research, IBM Almaden Research Center
November 7th, 2008
22nd Service Conference and Workshop, University of Westminister, UK
Acknowledgement: Thanks to IBM and NSF grant IIS-0527770 for support.
1
Service Research and Innovation | Almaden Research Center
© 2007 IBM Corporation
Outline
 National Wealth

Knowledge

Specialists

Industries
 Towards a Science of
Service Systems
2

Improve them

Create them

A Moore’s Law?
Service Research and Innovation | Service Science Management Engineering and Design
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Wealth of Nations
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Service Research and Innovation | Service Science Management Engineering and Design
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The Wealth of Nations: Some Examples
4
1800-
England
Capability Innovation: Steam Power
1850-
Germany
Capability Innovation: Chemistry
1900-
USA
Capability Innovation: Electrical & Information
1950-
Japan
Quality Innovation: Automobiles & Electronics
1990-
Finland
Capability Innovation: Mobile Communication
2000-
India
Cost Innovation: Service Centers
2000-
China
Cost Innovation: Factories
?
Future Innovations, include Compliance Innov.
Service Research and Innovation | Service Science Management Engineering and Design
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New Specialists and New Industries
 “We are continually
creating a new and
novel world.”
- Douglass C. North
 “Innovative activity is
fundamentally a service
activity.”
- William J. Baumol
 “…in consequence of
the division of labour,
the same number of
people are capable of
performing [more]…”
- Adam Smith
5
Service
New Industries
…
…
New Specialists
Knowledge Workers
Service Research and Innovation | Service Science Management Engineering and Design
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Science, management, engineering, and design
specialists coevolve within and around industries
6
Year
Engineering Discipline
Association
Artifacts & Industries - Sciences
Antiquity
Military
DoD
Cannons, tactics, supply chain - all
1852
Civil
ASCE
Roads, bridges, buildings - physics
1880
Mechanical
ASME
Steam engines, machinery - physics
1884
Electrical
AIEE/IEEE
Generators, grid, appliances - physics
1907
Agricultural & Bio
ASAE/ASABE
Crops, orchards - biology
1908
Chemical
AICE
Fertilizers, fuels, compounds - chemistry
1948
Industrial & Systems
ASIE/IIE
Factories, conveyors – systems, physics, economics
1948
Computing Machinery
ACM
Computers, Info Tech (IT) – logic and psychology
1954
Nuclear
ANS
Reactors - physics
1955
Environmental
AAEE
Sustainable construction - all
1963
Aerospace
AIAA
Jets, rockets - physics
1968
Biomedical
BMES
Medical instruments – biology, chemistry, physics
1985
Genetic Technology
AGT
Bacteria, plants, animals – biology, chemistry
1992
Financial
IAFE
Derivatives, options – economics and logic
1993
Software
JCESEP
Applications, web sites – logic and economics
2007
Service Systems
SRII/SSMED
Healthcare, government, business, etc. – all
Service Research and Innovation | Service Science Management Engineering and Design
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A model of nations evolving and changing
knowledge-intensive service activities (KISA)
Population by
Knowledge/Activity
Specialization
No t e m plo ye d (c h ildr e n ,
e lde r ly, c h alle n ge d, e t c . )
Agr ic u lt u r e , Ext r ac t ive ,
M an u fac t u r in g, C o n st r u c t io n
Go ve r n m e n t , He alt h c ar e ,
Edu c at io n , Pu blic Se r vic e s
Bu sin e ss an d Pr o fe ssio n al
Se r vic e s
Re t ail, Ho spit alit y, Le isu r e
Se r vic e s
In fr ast r u c t u r e Se r vic e s
(Ut ilit ie s, T r an spo r t at io n ,
C o m m u n ic at io n , e t c . )
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KISA 1: US 1800
Agriculture and family services
Local service knowledge
Independent generalists
30% measured in economic service
KISA 2: US 1940
Employment and community services
National service knowledge
Mixture generalist-specialists
40% measured in economic service
KISA 3: US 2010
Information and business services
Global service knowledge
Interdependent specialists
50% measured in economic service
Service Research and Innovation | Service Science Management Engineering and Design
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The activities of the populations of all nations are evolving
Ten Nations
US Employment History & Trends
Total 50% of World Wide Labor
A = Agriculture, G = Goods, S = Services
Nation
Labor
%
A
%
G
%
S
%
Service
Growth
China
21.0
50
15
35
191%
India
17.0
60
17
23
28%
U.S.
4.8
3
27
70
21%
Indonesia
3.9
45
16
39
35%
Brazil
3.0
23
24
53
20%
Russia
2.5
12
23
65
38%
Japan
2.4
5
25
70
40%
Nigeria
2.2
70
10
20
30%
Bangladesh
2.2
63
11
26
30%
Germany
1.4
3
33
64
44%
International Labor Organization
8
1980-2005
PC Age
2005
United States
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Services:
Value from enhancing the
capabilities of things (customizing,
distributing, etc.) and interactions between things
The largest labor force migration in human
history is underway, driven by global
communications, business and technology
growth, urbanization and low cost labor
Service Research and Innovation | Service Science Management Engineering and Design
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Where the growth is…
US Gross Domestic Product
Products
Services
Material
11%
30%
Information
& Organization
9%
50%
-Based on Uday Karmarkar, UCLA
(Apte & Karmarkar, 2006)
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Service Research and Innovation | Service Science Management Engineering and Design
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From Information Analytics to Business Insight:
BIW COBRA (Corporate Brand); SIMPLE (Intellectual Property)
Better use of information, better decisions, continuous CBM KPI improvements
Courtesy of
Jean Paul Jacob, IBM
Valium
(Trade Name)
Diazepam
(Generic Name)
CAS # 439-14-5
(Chemical ID #)
Valium>149 “names”
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Book: Mining the Talk, Spangler & Kreulen
Service Research and Innovation | Service Science Management Engineering and Design
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Knowledge-Intensive Service Activities (KISA)
 More jobs require expert
thinking and complex
communication skills
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Expert Thinking
 Specialization and
integration are both
important!
10
Complex
Communication
Routine Manual
5
0
 Fission and fusion
Routine Cognitive
-5
Non-routine
Manual
-10
1969 1974 1979 1984 1989 1994 1999
Percentile change in skill descriptions 1969-1999
Based on U.S. Department of Labor’s
Dictionary of Occupational Titles (DOT)
From Levy and Marnane (2004),
Autor, Levy Marnane (2003)
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Service Research and Innovation | Service Science Management Engineering and Design
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What should a service scientist know?
T-shaped professionals:
- expert thinking
(depth in one or more areas)
- complex communications
(breadth across many areas)
- s-schools (social science)
- e-schools (engineering)
- i-schools (information)
- b-schools (business)
complex communication
expert thinking
Courtesy of Jean Paul Jacob
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 I. Theoretical & Practical Foundations
1.
Concepts & Questions
2.
Tools & Methods
 II. Disciplines
3.
History & Evolution: Economics & Law
4.
Customer: Quality Measure & Marketing
5.
Provider: Productivity Measure & Operations
6. Authority:
Compliance Measure & Governance
7.
Competitor: Sustainable Innovation Measure & Strategy
8.
Privileged Access: People Resources & S Schools
9.
Owned Outright: Tech Resources & E Schools
10.
Shared Access: Information Resources & I Schools
11.
Leased/Contract: Organization Resources & B Schools
12.
Future & Investment: Project & Innovation Management
 III. Professions
13.
Scientists, Entrepreneurs, and Designers
14.
Engineers, Managers, Consultants, Practitioners
For a service science outline and 200+ annotated references, refer to:
http://www.cob.sjsu.edu/ssme/refmenu.asp
Service Research and Innovation | Service Science Management Engineering and Design
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IBM has begun to systematically classify diverse service systems
industry by industry, component by component, measure by measure…
CBM: Component Business Model
WBM and RUP: Work Practices & Processes
SOA: Technical Service-Oriented Architecture
IEEE Computer, Jan 2007
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Key Performance Indicators (KPIs)
IBM IBV: Component Business Models
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Businesses as service system entities
“…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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Data Centers as service system entities
“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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Call Centers as service system entities
“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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Service Research and Innovation | Service Science Management Engineering and Design
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Hospitals as service system entities
“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 as service system entities
“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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Nations as service system entities
“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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Cities as service system entities
“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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Families as service system entities
"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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People as service system entities
“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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Service Research and Innovation | Service Science Management Engineering and Design
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Designing New Service Systems
 Real World

Sensor augments

Semantic augments
“We expect a production increase of 5–10 percent
with Intelligent Oilfield," Jonathan Krome, IBM.
 Virtual World

Design servicescape

Rehearsals
 Simulated World
23

Design exploration

CAD Tool
Jacob Hall
Courtesy of
Jean Paul Jacob, IBM
“IBM's Traffic Prediction Tool predicted traffic flows …
…results were well above the target accuracy
of 85 percent,” Teresa Lim IBM
Service Research and Innovation | Service Science Management Engineering and Design
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Improving Existing Service Systems
Examples:
IBM contracts to
improve oil field
productivity; or
traffic flows, etc.
Systematically
exploring the
space of all
service systems:
nation by nation
industry by industry
component by component
measure by measure
Quality
Productivity
Regulatory
Compliance
Courtesy of
Steve Kwan, SJSU
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Sustainable
Innovation
Government, Healthcare, Education
Retail, Utility, Travel, Financial, Professional
Entertainment, Transportation, Communication
Service Research and Innovation | Service Science Management Engineering and Design
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What would a service systems breakthrough look like?
How about a CAD tool for service system/network design?
And a new Moore’s Law for service system improvement?
Service System/Network
Computational System
More transistors, more powerful
Requires investment roadmap
25
1. People
2. Technology
3. Shared Information
4. Organizations
connected by value propositions
More win-win interactions, more value
Requires investment roadmap
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More of the value from new knowledge is unlocked
by service systems/networks, as they scale
 Demand:
Customer
adoption rate
26
How
to
invest?
Electricity
Telephone
Radio
Automobile
VCR
50
 Service
system/
network
growth

Television
100
% Adoption
 Supply:
Knowledge
creation rate
PC
Cellular
0
25
50
75
Years
100
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125
150
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“Succeeding through Service Innovation” Whitepaper: A Framework for Progress
(http://www.ifm.eng.cam.ac.uk/ssme/)
1. Emerging demand
2. Define the domain
3. Vision and gaps
4. Bridge the gaps
5. Call for actions
The white paper offers
a starting point to -
Service
Innovation
Service
Systems
Service
Science
Stakeholder
Priorities
Growth in service
GDP and jobs
Customer-provider
interactions that
enable value
cocreation
To discover the
underlying
principles of
complex service
systems
Education
Systematically
create, scale and
improve systems
Knowledge
& Tools
Service quality
& productivity
Environmental
friendly &
sustainable
Urbanisation &
aging population
Globalisation &
technology drivers
Opportunities for
businesses,
governments and
individuals
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
Foundations laid
by existing
disciplines
Progress in
academic studies
and practical tools
Skills
& Mindset
Develop programmes
& qualifications
Research
Encourage an
interdisciplinary
approach
Business
Employment
& Collaboration
Government
Policies
& Investment
Develop and improve
service innovation
roadmaps, leading to a
doubling of investment
in service education
and research by 2015
Gaps in knowledge
and skills
Glossary of definitions, history and outlook of service research, global trends, and ongoing debate
Call to Create National Service Innovation Roadmaps (SIR) Reports
27
Recap: The wealth of nations depends on evolving
innovative knowledge-intensive service activities
The Origin
of Wealth
by Eric D.
Beinhocker
Estimated world (pre-1800) and then
U.S. Labor Percentages by Activity
120
100
2M years as hunting clans/bands
10K years as farm families
200 years as factory workers
60 years (so far) as knowledge
workers in organizations
and now digital networks
Services (Info)
Services (Other)
Industry (Goods)
Agriculture
Hunter-Gatherer
80
60
40
20
The Pursuit of
Organizational
Intelligence,
By James G.
March
28
20
00
00
0
YA
20
00
0
YA
10
00
0
YA
20
00
YA
18
00
18
50
19
00
19
50
20
00
20
50
0
Estimations based on Porat, M. (1977) Info
Economy: Definitions and Measurement
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Questions?
Visit us in
San Jose, CA USA
IBM Almaden
Research Center
One of eight main
IBM Research labs
worldwide
Email: spohrer@us.ibm.com
Blog: http://forums.thesrii.org/blog?blog.id=main_blog
Service Research: http://www.almaden.ibm.com/asr/
Service Innovation: http://www.ifm.eng.cam.ac.uk/ssme/
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Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
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Thanks to Global IBM SSMED Team
Research
Vivian Ding (CRL)
Kazuyoshi Hidaka (TRL)
Paul Maglio (ARC)
Doug Riecken (WRC)
Liba Svobodova (ZRL)
Segev Wasserkrug (HRL) and many others…

University Relations
Dianne Fodell
Wendy Murphy
Kevin Wright and many, many others…

Cross IBM
Paul Kontogiorgis (SWG)
Steve Street (GTS)
Moises Cases(Systems)
Yuriko Sawatani (TRL)
Jakita Thomas (ARC)
Gerhard Satzger (Germany)
Claudio Pinhanez (Brazil) and many others…

Executive Support
Nicholas Donofrio
Ginni Rometty
John Kelly III
Jai Menon
Robert Morris
Thomas Li
Guru Banavar
Jim Spohrer
David Cohn
Mahmoud Nagyshineh
Greg Golden
Jon Iwata and others…
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Hundreds of others worldwide… thanks to all!

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A Practical Place to Get Started…
“Theory of Constraints (TOC) gets its name
from the fact that all enterprises are
constrained by something. If they weren’t
they could grow as large and as fast as
they wanted… So the first step in applying
TOC is to figure out precisely where the
 John Arthur Ricketts, IBM constraints are… The second step in apply
TOC is to utilize the constraint to its fullest
extent… The third step in applying TOC is
to make sure that non-constraints keep the
constraint busy – but otherwise stay out of
its way… The fourth step in applying TOC
is to improve the productivity of the
constraint… The final step in applying TOC
is to repeat the previous steps.”
 Reaching the Goal: How 
Managers Improve a
Services Business Using
Goldratt’s Theory of
Constraints
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Service Research and Innovation | Service Science Management Engineering and Design
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Four Targets of KISA




People
Organizations
Technologies
Information
Physical
Not Physical
Has
Rights
People
Organizations
No
Rights
Technologies Information
(businesses, nations,
etc.)
(product artifacts
and environment)
32
Service Research and Innovation | Service Science Management Engineering and Design
(capital, reputation,
process, laws, science)
© 2008 IBM Corporation
© 2005 IBM Corporation
Resources are the building blocks of
service systems entities
First foundational premise
of service science:
Physical
Rights
No-Rights
1. People
2. Technology
3. Organizations
4.. Shared
Information
operant
operand
Service system entities
dynamically configure
four types of resources
Not-Physical
The named resource is
Physical
or
Not-Physical
(physicists resolve disputes)
The named resource has
Rights
or
No-Rights
(judges resolve disputes
within their jurisdictions)
33
Formal service systems can contract
Informal service systems can promise/commit
Trends & Countertrends (Evolve and Balance):
Informal <> Formal
Social <> Economic
Political <> Legal
Routine Cognitive Labor <> Computation
Routine Physical Labor <> Technology
Transportation (Atoms) <> Communication (Bits)
Qualitative (Tacit) <> Quantitative (Explicit)
Service Research and Innovation | Service Science Management Engineering and Design
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Value propositions are the building blocks of
service system networks
Second foundational premise
of service science:
Service system entities
calculate value from multiple
stakeholder perspectives
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
34
Value propositions coordinate & motivate resource access
Stakeholder
Perspective
(the players)
Measure
Impacted
Pricing
Decision
Basic
Questions
Value
Proposition
Reasoning
1.Customer
Quality
(Revenue)
Value
Based
Should we?
(offer it)
Model of customer: Do
customers want it? Is
there a market? How
large? Growth rate?
2.Provider
Productivity
(Profit)
Cost
Plus
Can we?
(deliver it)
Model of self: Does it play
to our strengths? Can we
deliver it profitably to
customers? Can we
continue to improve?
3.Authority
Compliance
(Taxes and
Fines)
Regulated
May we?
(offer and
deliver it)
Model of authority: Is it
legal? Does it compromise
our integrity in any way?
Does it create a moral
hazard?
4.Competitor
(Substitute)
Sustainable
Innovation
(Market
share)
Strategic
Will we?
(invest to
make it so)
Model of competitor: Does
it put us ahead? Can we
stay ahead? Does it
differentiate us from the
competition?
Service Research and Innovation | Service Science Management Engineering and Design
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Access rights are the building blocks of
service system ecology
Third foundational premise Competitor
of service science:
S
The access rights associated with
customer and provider resources
are reconfigured by mutually
agreed to value propositions
relationships
(substitute)
Provider
Customer
Authority
P
C
A
OO
LC
OO
LC
SA
PA
SA
PA
value-proposition
change-experience
dynamic-configurations
35

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.)
time
 Access rights
service = value-cocreation
provider resources
Owned Outright
Leased/Contract
Shared Access
Privileged Access
B2B
B2C
B2G
G2C
G2B
G2G
C2C
C2B
C2G
***
customer resources
Service Research and Innovation | Service Science Management Engineering and Design
Owned Outright
Leased/Contract
Shared Access
Privileged Access
© 2008 IBM Corporation
© 2005 IBM Corporation
Service and non-service interactions (ISPAR)
 Four possible outcomes
from a two player game
ISPAR descriptive model
1
5
Win
Lose
Provider
lose-win
win-win
(coercion)
(value-cocreation)
2
6
3
7
4
lose-lose win-lose
(co-destruction)
(loss-lead)
9
10
Lose
Win
Customer
 ISPAR generalizes to ten
possible outcomes




36
win-win: 1,2,3
lose-lose: 5,6, 7, maybe 4,8,10
lose-win: 9, maybe 8, 10
win-lose: maybe 4
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8
Service system entities are diverse and complex
“The goal of science is to make the wonderful and complex understandable and
simple – but not less wonderful.” – Herb Simon, The Sciences of the Artificial


A. Informal Service Systems
B. Formal Service Systems

1. Social Systems



2. Political Systems



Governed Systems
Value Systems



4. Legal Systems

5. Organizational Systems






3.
4.
6.
5.
Technological Systems
Designed Systems
8. Ecological Systems


37
Linguistic Systems
Mathematical Systems
Physical Symbol Systems
2.
B.
7.
Managed Systems
Open Source Communities
7. Engineered Systems


Legislative, Judicial, Executive Separation
6. Information Systems

8.
Markets and Organizations
Firms or Hierarchies
Economic Institutions
Gray Markets


1.
3. Economics Systems


A.
Human Systems/Sociotechnical Systems
Human Cultures
Evolved Systems
Nature’s Services
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Service scientists understand service systems/networks/ecology
(to discover and to innovate = create + scale + improve + …)
Service Scientists
 Service Systems Worldview

Population Entities:
Service Systems
–
–
–
–

People
Organizations
Open Source Communities
…
Outcomes:
Value-Cocreation
or
Disputes
– Markets & Competition
– Governance Mechanisms
– …
38
Manager/Leader+
Consultant+
Practitioner
Interactions:
Value Propositions
– Promise
– Contract
– …

Entrepreneur+
Designer/Architect+
Engineer
CREATE
IMPROVE
SCALE
MERGE, DIVEST,
OUT/IN-SOURCE
TRANSFORM,ETC.
SERVICE SYSTEM ENTITIES
SERVICE SYSTEM NETWORKS
SERVICE SYSTEM ECOLOGY
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Service science is different, because it integrates…
Many say that “service science is just ___<see list of disciplines below>____”
Most like general systems theory (abstract) and systems engineering (applied)
Most disciplines specialize…
Service science integrates
A Service
System is
Complex
Service system entities
are dynamic configurations of
resources…
people, technology, organizations,
shared information (e.g., language,
laws, measures, models, processes,
policies, relationships, rights, etc.)
Operations Research …
Industrial Engineering
Multi-agent Systems
Game Theory
Information Management
Organization Theory
Service Research and Innovation | Service Science Management Engineering and Design
Economics & Law
Management Science
Mngmnt of Info Sys (MIS)
General Systems Theory
Systems Engineering
Queuing Theory
Anthropology
CS/Artificial Intelligences
Information Science
Social Science/ Poli-Sci
Cognitive Science/Psych
39
Marketing
Operations Mngmnt …
connected to other service system
entities by value propositions for
the purpose of value-cocreation
relationships, with governance
mechanisms for dispute resolution.
© 2008 IBM Corporation
© 2005 IBM Corporation
Global service system ecology simulator: By 2013?
Fundamental to CAD tool development
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) …
CBM-based Industry Simulations - 2013?
15
12
Heart Simulation
Log
9
Entities
Universe Simulation
6
Brain Simulation
existing projects
Earth Simulator
and projection
2000
40
2010
Service Research and Innovation | Service Science Management Engineering and Design
2020
2030
© 2008 IBM Corporation
© 2005 IBM Corporation
A model of a business
• Traditional
Technology
Process
Supply chain
Traditional R&D
Product & Process
Production &
Suppliers
Marketing, Sales, Support, Sourcing
IT, HR, Strategy, Legal, Finance
Accounting, Comm., Distrib., etc.
Customer
–
–
–
• Today
–
41
Technology
Process
Supply chain
Offering innovation
Demand innovation
Business model
Social-organization
performance
Systems/networks
Traditional R&D
Product & Process
Production &
Suppliers
Offering
Service Research
Marketing, Sales, Support, Sourcing
HR, Strategy, Legal, Finance
Accounting, Comm., Delivery, etc.
Customer
–
–
–
–
–
–
–
© 2008 AFSMI , SSPA , TSPA
Evolution of trust
The Company of Strangers :
A Natural History of
Economic Life
by Paul Seabright
42
“Evolution of Trust: Human beings are the only
species in nature to have developed an elaborate
division of labor between strangers. Even something
as simple as buying a shirt depends on an
astonishing web of interaction and organization that
spans the world. But unlike that other uniquely
human attribute, language, our ability to cooperate
with strangers did not evolve gradually through our
prehistory. Only 10,000 years ago--a blink of an eye
in evolutionary time--humans hunted in bands, were
intensely suspicious of strangers, and fought those
whom they could not flee. Yet since the dawn of
agriculture we have refined the division of labor to
the point where, today, we live and work amid
strangers and depend upon millions more. Every
time we travel by rail or air we entrust our lives to
individuals we do not know. What institutions have
made this possible?”
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Evolution of business organizations
The Visible Hand: The
Managerial Revolution in
American Business
by Alfred Dupont Chandler
43
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Biological System Entities:
Also diverse and complex
“…from so simple a beginning endless forms most beautiful and most
wonderful have been, and are being, evolved.” – Charles Darwin
44
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Stages of scientific maturity
Early Stage:
Collect and
Classify
(Biology
Begins)
Carl Linnaeus,
the father of modern
taxonomy and ecology
a pioneer of the science
of biology
45
Mature Stage:
Unify and
Mathematize
(Physics Matures;
Electro-Magnetism)
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Towards a Moore’s Law
 Computational power doubles at a predictable rate.
 Are there analogous capability-doubling laws that apply in
services?
 Suppose that traces of human activity in particular service
systems double at some rate, and that these human activity
data lead to specific opportunities for improved or increased
service productivity or quality.
 Consider Amazon.com: The quality of recommendations
depends on accurate statistics – the more purchases made,
the better the statistics for recommendations.
 Three improvement “laws” that might be applicable in
services:
46

The more an activity is performed (time period doubling,
demand doubling), the more opportunities to improve.

The better an activity can be measured (sensor deployment
doubling, sensor precision doubling, relevant measurement
variables doubling) and modeled, the more opportunities to
improve.

The more activities that depend on a common sub-step or
process (doubling potential demand points), the more likely
investment can be raised to improve the sub-step.
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
IBM Institute for Business Value (IBV): How to invest
Component Business Model: Making specialization real
47
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Intelligent Document Gateway (IDG):
Service System Analysis
 Process
 Digitization
 Business Logic
48
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Call Centers as knowledge-intensive service systems
 Components
 Analytics
 Processes
 Performance
49
CACM July 2006
 Dashboard
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Fact: 2006 was first year that service jobs overtake
agriculture jobs world wide
 Correlates with growth of
More people, more large cities
 More technology, more global networks
 More organizations, more wealth
 More information, more knowledge

 Increase in connectedness
Billions of people
 Billions of devices (computers, phones,
TVs, security cameras, routers, etc.)
 Millions of organizations
 Quadrillions of symbol-concepts

In 2006 the service sector’s share of
global employment overtook agric. for
the first time in human history,
increasing from 39.5% to 40%.
agric.decreased from 39.7% to 38.7%.
The industry sector accounted for
21.3% of total employment.
 Increase in interactions
Productive (value +)
 Unproductive (value -)

- International Labour Organization
50
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
Global Change and SSMED
What is SSMED really?
- Focus on service innovation
- Proto-discipline & professions
- Research area
In 2006 the service sector’s share of
global employment overtook agric.
for the first time, increasing from
39.5% to 40%. Agric.decreased
from 39.7% to 38.7%. The industry
sector accounted for 21.3% of total
employment.
- International Labour Organization
51
Germany $87M
Innovation with
Services
EU $100M
NESSI pending
China 5 Yr Plan
Modern Services
Japan $30M
Service
Productivity
US $4M+
NSF SEE
HR 2272/1106
. . . And More!
Related activities to date
- ACM, IEEE, INFORMS, SRII SIGs
- 130 Programs, 44 Countries
- Over 100 conference and journal papers
- >100 Press, >10,000 Web site mentions
- IBM – 400 Service Researchers WW
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
US News – Smart Choices Graduate Engineering
 ENVIRONMENTAL ENGINEERING
It's a growing field, and engineers are
needed to clean up existing pollution
problems and prevent future ones.
 SERVICE SCIENCE, MANAGEMENT,
AND ENGINEERING (SSME)
This emerging discipline is getting a big
push from industry, including IBM and
Hewlett-Packard. SSME combines
engineering, computer science,
economics, and management to improve
the service sector.
http://www.usnews.com/usnews/edu/grad/articles/brief/gbeng_brief_2.php
http://www3.brookings.edu/metro/pubs/20070904_gleiecosystem.pdf
52
Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation
The U.S. National Innovation Investment Act
(America COMPETES)
 US House and Senate voted to approve on August 2 nd,, 2007; President has signed.

SEC. 1005. STUDY OF SERVICE SCIENCE.




(a) Sense of Congress- It is the sense of Congress that, in order to strengthen the
competitiveness of United States enterprises and institutions and to prepare the people of
the United States for high-wage, high-skill employment, the Federal Government should
better understand and respond strategically to the emerging management and learning
discipline known as service science.
(b) Study- Not later than 270 days after the date of enactment of this Act, the Director of the
Office of Science and Technology Policy, through the National Academy of Sciences, shall
conduct a study and report to Congress regarding how the Federal Government should
support, through research, education, and training, the emerging management and learning
discipline known as service science.
(c) Outside Resources- In conducting the study under subsection (b), the National Academy
of Sciences shall consult with leaders from 2- and 4-year institutions of higher education, as
defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)), leaders
from corporations, and other relevant parties.
(d) Service Science Defined- In this section, the term `service science' means curricula,
training, and research programs that are designed to teach individuals to apply scientific,
engineering, and management disciplines that integrate elements of computer science,
operations research, industrial engineering, business strategy, management sciences, and
social and legal sciences, in order to encourage innovation in how organizations create value
for customers and shareholders that could not be achieved through such disciplines working
in isolation.
http://thomas.loc.gov/cgi-bin/query/F?c110:5:./temp/~c110nPy6Rp:e19768:
53
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© 2008 IBM Corporation
© 2005 IBM Corporation
Test
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Service Research and Innovation | Service Science Management Engineering and Design
© 2008 IBM Corporation
© 2005 IBM Corporation