Relooking at services
science and services
innovation
Georgiana Loredana IONITA
- SEM 2012 -
Content
1.
2.
Introduction
Service and the three-layer services science framework
2.1 Service needs
2.2 Service competencies
O
O
Structured view of service competencies
Engineering view of service competencies
2.3 Service resources
3.
The Amazon case study
4.
Conclusions
2
1. Introduction
In lots of countries, service economy has become the dominant
economy. Modern services industries require talents skillful at
multidiscipline subjects including IT services, business models,
management skills, psychology, etc.
There is the rise of services science, service-oriented computing,
and services computing. The multidiscipline features bring new
challenges for services science.
In this presentation, we go beyond the traditional view of services
and propose a three-layer framework for services science and
services innovation.
The framework covers service needs, service competencies, and
service resources.
3
2. Service and the three-layer services science
framework (1)
Every service has its own lifecycle which covers service requirements from
service consumers, capabilities of service providers, interactions among the
service roles in a service project, service delivery process, and service operation.
This business driven view could facilitate the system thinking of modern services
industries. The framework below is based on experiences and studies of modern
services industry over the past 10 years.
4
2. Service and the three-layer services science
framework (2)
The three layers from top to bottom are service needs layer, service competencies
layer, and service resources layer. Besides the key factors in each layer, there are
directed causal links pointing from service resource to service competency layer
and from service competency layer to service needs layer. We call this map service
map to emphasize that it is a map representing concerns in the service field, and it
shows the relationship among different types of service concerns.
5
2. Service and the three-layer services science
framework (3)
In our service map, service competencies in the middle usually make up the
bottleneck. It is because services requirement can be very rich and the demands are
always growing.
Each unique service competency requires special knowledge and service delivery
platform. It is impossible for a single service enterprise to own all the service
competencies because holding each service competency requires certain cost. This
is the reason service providers often seek collaborations to win a market.
The coverage of service resources is very wide. It
providers’ competencies to leverage those service
service capabilities to acquire, serve, and retain
bottleneck is usually in the middle where it is also
innovation.
is all depending on services
resources and develop their
the service consumers. The
often the source for services
6
2. Service and the three-layer services
science framework (4)
To be successful in the market, every service enterprise has to think of efficient
and unique ways to attract service customers, e.g., through unique service
marketing, delivering, and operation capabilities.
The benefit of using service map as a way to depict service needs, service
competencies, and service resources for a service provider is that it could give a
clear picture for all internal stakeholders how indices in each layer are related
and support by other indices. It makes service indices measurable and such
giving an opportunity to improve the overall quality of the service and identifying
new service resources to be used to offer innovative services to service
customers.
2.1 Service needs (1)
Abraham Maslow developed the theory now known as Maslow’s hierarchy of
needs. He divided those needs into five layers, from most urgent and basic
(bottom layer) to most advanced (top layer). They are physiological need,
safety need, belonging/love need, esteem need, and self actualization need
respectively.
Service technologies innovations have great opportunities in the space of
satisfying different layers of needs.
Maslow’s Hierarchy of needs represents people’s needs in the society. In the
field of services, there are also different levels of needs from different
customers. It is already a common sense to understand needs of customers
in different segmentations and then provide them with different portfolio of
service products. Maslow’s model represents the needs of one person, while
in modern services industries service needs may originate from a community
of service customers.
8
2.1 Service needs (2)
Comparing with traditional needs in Maslow’s hierarchy, in the service fields, the
service needs may include basic needs that currently have been considered such as
availability of service system, service delivery and billing, and service customization.
There are also service needs only possible with Web technologies such as digitized
service encounter, e.g., using ATM machines to replace service staffs as bank tellers
in the case of simple banking transactions.
9
2.2 Service competencies
Service competencies are capabilities of a service provider to provide high
quality services to its service consumers. Here, we will analyze the service
competencies from different angles including cybernetic, system engineering,
and service componentization.
2.2.1 Structured view of service competencies (1)
One view of a service system is based on cybernetic and system engineering as
shown bellow :
10
2.2.1 Structured view of service competencies (2)
A service system has its building blocks but should serve as a complete system to
the outside world. A service system should be measurable. In the real cases, a
successful service company like Amazon should always define a set of
measurable business KPIs (key performance indicators). One of the critical KPIs
is customer satisfaction index.
11
2.2.1 Structured view of service competencies (3)
The building blocks of a service system include service processes, service staffs, service
partners, etc. In the center, there is the service information hub. The overall objective of a
service system is to achieve predefined service level agreement with acceptable cost and
maximized revenue.
Besides that, the service system should has its loop of feedback so that it could monitor the
service performance and make adjustments accordingly during execution in respond to the
change of service environment and let service customers aware of the improved service
quality. Both a service and a service system have their lifecycles.
12
2.2.2 Engineering view of service competencies (1)
Another view of a service system is componentization-based engineering
view. Since most service systems are complex systems while cognition and
capability of people are always limited, there must be a way of decomposing
the system into controllable pieces, so that within a service organization
different roles have clear view of their working scope and they could
collaborate efficiently as one body. A typical componentized view within a
service organization is eTOM (enhanced telecommunication operation map)
framework from the telecommunication forum.
Telecommunication industry is an open industry that leverage a lot of IT
services innovations. The realm of telecommunication industry includes
three parts namely enterprise management which is not unique, strategy,
infrastructure and product which is unique in service product management,
and service operation which is quite unique all across the whole service
lifecycle.
13
2.2.2 Engineering view of service competencies (2)
The eTOM view looks at services in an enterprise from two dimensions as shown bellow :
One dimension is from
service customer point
of view such as operation
support and readiness,
service fulfillment,
service assurance,
and service billing.
The other dimension is
from management point
of view such as customer
relationship management,
service management and
operation, resource
management and operation, and supplier/partner relationship management.
14
2.3 Service resources
Service resources cover whatever items service providers use during service
processes. Service resources include information resources, people resources,
process resources, and physical resource, etc. From a service provider point of
view, service resources could be categorized into internal resources and external
resources that correspond to different policies for resource management.
Internal resources
Example: a service-oriented pub-sub system could integrate customer information
with shipment information and provide instant messaging services to the
customer notifying them of the change of shipment status. It could greatly
improve the customers’ satisfaction and increase the possibility of more business
opportunities with the customer.
External resources
An example of good external resources enabled by IT innovation could be
integrated cross region supply chains covering multiple sub-service providers so
that the main service providers could always choose the best sub-service provider
with lowest cost.
15
3. The Amazon case study (1)
Amazon.com, previously a recognized online book seller, has evolved its business
model from an online retailer to a online service provider for the retail industry—
enabled by SOA and Web services technologies. Its marketplace partner model is
highly successful, with tens of thousands of subscribers to its Web servicesenabled back-end interfaces.
Now Amazon.com is providing end-to-end services to other retailers, running their
entire online operations (including Web sites, orders, and fulfillments).
1.
The needs for online business that influence Amazon
When customers come to Web, they are certain seeking more options and more
convenient ways of purchasing more goods, in an approach that is more cheap
than buying in stores. Amazon is good at understanding customers’ needs and
offer the services in efficient approach. The needs almost cover all aspect of
service needs.
For availability of service system and service delivery and billing, after Amazon
realized that depending on third party fulfillment vendors cannot guarantee high
quality and on time book delivery, they established they own fulfillment center.
16
3. The Amazon case study (2)
For service customization, users that have registered on Amazon Web site could
enjoy customized Web pages showing their interested good and providing
recommendations for them, using the famous collaborative filtering
recommendation system like “Users buy product X also buy product Y ”. The
“review” feature on Amazon’s Web site provides end user contribution for ranking
the popular books and other goods.
2. Core competencies of Amazon influence the success of new service business
models
Because Amazon’s service system has both broad customer set and very
efficient and scalable service platform, it can serve the needs of different types
of customers.
3. Amazon’s service resources form the foundation of Amazon competencies
If we look into more detail of Amazon’s core competencies, we would find that
most of them are related to Amazon’s unique service resources, including
platform resources, operation resources, standard interface resources, etc.
17
3. The Amazon case study (4)
4.
The Amazon service ecosystem
With core and unique service competencies, Amazon not only satisfies customers’
needs but also accumulated valuable service resources. Amazon’s core platform is built
for adapting to changes based on its business models. There are three major
partnership business models: associate partner, marketplace partner, and Web Service
(platform) partner.
Amazon’s ecosystem includes these Amazon Partners (APs) supported by the Amazon
platform. The following four types of role players are the active users of Amazon’s
platform:
Buyers. There are over 39 million active customer accounts, this is Amazon’s base for
partnership;
Sellers. They are merchants who sell on the Amazon’s platform. There are over
600,000 active seller accounts, the number of buyers and sellers constitutes positive
feedback;
Associates (Web Site owners). They are people who own their Web sites and link to
Amazon with referral fees. There are hundreds of thousands of associates;
Developers. They are people who use Amazon Web Services (AWS) to create
applications and tools. There are over 100,000 registered developers.
18
3. The Amazon case study (5)
The implication of Amazon’s success is that to be a industry lead, you have to grasp
unique and core competencies that not only satisfies customer’s current needs but also
can influence customers’ usage and purchasing behavior. On the other hand, core
competencies highly depend on IT services innovations and available service resources.
Good content resources may attract more customers, good people and process
resources may improve service operation, and good channel resources with customers
and partners and greatly broaden your service ecosystem to generate more
transactions.
A good service system like Amazon not only covers the whole service lifecycle but also
highly improves the experience of front stage and back stage of a service operation
system.
This flexible enablement platform for introducing new business models has
demonstrated the value of SOA and Web services technology in building an adaptive
service ecosystem for Amazon.com. It is a typical embodiment of the three-layer service
model to realize service needs for different service consumers and partners.
19
4. Conclusions
The proposed three-layer service map not only covers service needs and
service competencies but also covers service resources.
The service needs layer extends Maslow’s Hierarchy of needs to the field
of services.
The service competencies layer leverages the concept of cybernetic and
system thinking to study a service system.
The service resources layer leverages the observations from service
economy and service management; they have opportunities for using
more modern service resources triggered by technology innovations.
The Amazon case is an example to see how the three-layer service map
may well illustrate the modern service enterprises
20
Thank you!
21