Almaden Services Research
Services Sciences, Management, and Engineering (SSME)
Jakita N. Owensby
Paul P. Maglio
Jim Spohrer
Wendy Murphy
owensby@us.ibm.com
pmaglio@almaden.ibm.com
spohrer@almaden.ibm.com
wendym@us.ibm.com
Frontiers of Knowledge in Science and Technology for Africa
University Leader’s Forum
November 20, 2006
© 2006 IBM Corporation
Almaden Services Research
Overview
 Motivations for Services Sciences, Management and Engineering
(SSME)
 What is meant by Services?
 Academic Initiative
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
What is motivating the creation and development of Services
Sciences, Management and Engineering (SSME)?
 Economic growth depends on innovation – nationally and in the enterprise
 US labor and GDP more than 75% services (major industrialized nations are the
same, developing nations are close behind)
– US Bureau of Labor Statistics predicts 20% increase in services jobs by 2014
– Fastest growth in business and professional services, information services
 Services innovation is not well understood
– More than technology innovation, services innovation is interdisciplinary
(business, organizational and technology innovation)
 SSME: urgent call to action to become more systematic about service innovation
– A new academic discipline and research area aimed at studying,
improving and teaching service innovation
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
The Rise of the Service Economy
100%
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90%
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United States
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0%
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20%
Germany
1820
1840
10%
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1980
2000
90%
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0%
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1885
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2010
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China
1835
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90%
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1835
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Japan
20%
India
1820
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Russia
10%
1860
SSME
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0%
1810
1835
November 19, 2006
1985
2010
© 2006 IBM Corporation
Almaden Services Research
The World is Becoming One Big Service System
Top Ten Nations by Labor Force Size
(about 50% of world labor in just 10 nations)
A = Agriculture, G = Goods, S = Services
Nation
% WW %
%
%
25 yr %
100%
Labor
A
G
S
delta S
China
21.0
50 15
35
191
India
17.0
60 17
23
28
90%
80%
70%
60%
50%
40%
30%
U.S.
4.8
3 27
70
21
20%
10%
Indonesia
3.9
45 16
39
35
Brazil
3.0
23 24
53
20
0%
1810
China
1835
1860
1885
1910
1935
1960
1985
2010
100%
Russia
2.5
12 23
65
38
Japan
2.4
5 25
70
40
90%
80%
70%
60%
50%
Nigeria
2.2
70 10
20
30
Banglad.
2.2
63 11
26
30
40%
30%
20%
Germany
1.4
3 33
64
44
10%
0%
1800
United States
1820
1840
1860
1880
1900
1920
1940
1960
1980
2000
>50% (S) services, >33% (S) services
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Information Services are big and getting bigger
US Gross National Product
Products
Material
Information
Services
11%
30%
9%
50%
- from Uday Karmarkar, UCLA
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
What we see…
 Services depend critically on people, technology, and co-production of value
 People work together and with technology to provide value for clients
 So a service system is a complex socio-techno-economic system
 Growth requires innovation that combines people, technology, value, clients
Science &
Engineering
Social & Cognitive
Sciences
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SSME
Technology
Innovation
Social
Innovation
Business
Innovation
Demand
Innovation
Business &
Management
Economics
& Markets
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
The global economy is at a tipping point
 Technological advances
– Network ubiquity
– New sense of openness (from open access to information to open source)
 Horizontally-integrated business operations
– Dynamic transformation with limited disruption to the organization
– Revenue expansion and customer equity are key business metrics
 Shift in skill-level of workers
– Continued need for domain experts
– New need for people with focused knowledge in 1 or 2 domains and spectral
knowledge about related domains
– Fusing of technical competency, industry-specific knowledge, organizational and
business-process expertise
 A restructuring of the economic landscape through the creation and
propagation of entrepreneurial capitalism
– Effects:
• Struggles in corporate restructuring
• New institutional forms developed such as venture capitalism, foundations and research
institutions
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
The 21st century demands uniquely-skilled people
 Cross-disciplinary programs and degrees (SSME)
 Fusing technical competency with industry specific knowledge
and organizational and business-process expertise (depth and
breadth)
 Success requires open collaboration among academia,
government and industry to transform how the pipeline of future
skills is built
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
What is meant by Services?
In economics and marketing, a service is the non-material equivalent of a
good. It is claimed to be a process that creates benefits by facilitating either
a change in customers, a change in their physical possessions, or a change
in their intangible assets. (Wikipedia, 2006)
A service is a provider to client interaction that creates and captures value while
sharing the risks of the interactions.
Services are the application of specialized competences (skills and knowledge)
through deeds, processes, and performances for the benefit of another entity
or the entity itself (Vargo & Lusch, 2004a)
Services are value that can be rented (in the broad sense) by the application of
some process that the renter (client) participates in. This is a contrast with
goods, whose value (once purchased) is owned by the customer (Lovelock &
Gummesson, 2004)
The jury is still out on an agreed upon definition of services
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
What distinguishes a service from a good?
 Services have characteristics that distinguish them from goods
– the customer of a service is typically a participant in the service process. The
customer co-produces the value (or benefit) along with the service provider via
ongoing interactions.
– the extent of the co-production varies from indicating preferences, e.g., styling
preferences at a barbershop service, to being an active pseudo temporary
“employee” of the service process, e.g., collecting your order at a fast-food
restaurant, or scanning your items, bagging, and paying using a supermarket
self-checkout service system.
 The customer as co-producer has interesting consequences
– the quality of service (QoS) is typically tied to a customer’s (or set of
customers’) perspectives and experiences.
• That is partly why, trust and reputation are very important aspects of any service
business, e.g., the reputation system of eBay’s sellers and buyers.
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Traditional vs. Electronic Services
Tien, RPI
SERVICE ENTERPRISES
ISSUE
12
TRADITIONAL
ELECTRONIC
Co-Production Medium
Physical
Electronic
Labor Requirement
High
Low
Wage Level
Low
High
Self-Service Requirement
Low
High
Transaction Speed Requirement
Low
High
Computation Requirement
Medium
High
Data Sources
Multiple Homogeneous
Multiple Non-Homogeneous
Driver
Data-Driven
Information-Driven
Data Availability/Accuracy
Poor
Rich
Information Availability/Accuracy
Poor
Poor
Size
Economies of Scale
Economies of Expertise
Service Flexibility
Standard
Adaptive
Focus
Mass Production
Mass Customization
Decision Time Frame
Predetermined
Real-Time
SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
SSME – Definitions and Motivations
 The application of scientific, management, and engineering
disciplines to tasks that one organization beneficially performs for
and with another (“services”).
– Make productivity, quality, compliance, sustainability, learning rates, and
innovation rates more predictable in the service sector, especially complex
organization to organization services – business to business, nation to nation,
organization to population.
– Services are value co-production performances and promises between clients and
providers, with alternative work sharing, risk sharing, information sharing, asset
sharing, and decision sharing arrangements and relationships.
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Visual representation of service system
Client owns some state or
possesses some form of a state
negotiate
client
provider
Head, empty refrigerator,
process
Client and provider negotiate
the terms of the service
owns
transforms
state
Style, prices for
food,method of payment,
terms for outsourcing
Client’s state is transformed by
the provider
Fresh cut, groceries, less
overhead, more efficient
processes
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
SSME is really three things…
 An urgent “call to action”
– To become more systematic about innovation in services
– Complements product and process innovation methods
– To develop “a science of services”
 A proposed academic multi-discipline
– Draws on many existing disciplines
• Science – A way to create knowledge
• Engineering – A way to apply knowledge and create value
• Business Model – A way to apply knowledge and capture value
• Management – Improves the processes of creating and capturing value
– Aims to integrate them into a new specialty
 A proposed research area
– Service systems are designed (computer systems)
– Service systems evolve (linguistic and social systems)
– Service systems have scale-emergent properties (economic systems)
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
From Computer Science to Service Science…
Now IBM is working to
Establish Service Science
Physicists
Electrical Engineers
Computer
Science
Mathematicians
Need to hire Service Scientists
Philosophers
(Boolean Logic)
Need to hire Computer Scientists
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
The state of services curricula and research
 Surge of programs at the master’s level
– Easier to adopt new programs
– Focus on depth rather than breadth
 There is a need for an integrated research program
 Connected to that is a need to generate a more coherent and standard
definition and language around services (theoretical framework)
 Need for trained and hirable people
• Urgent need for undergraduate and graduate education in service.
 Service has not been viewed as a business function but instead
as a personal matter or skill.
 Service has not been documented, so innovation is difficult.
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Moving toward a science of Services (SSME)
 5 frameworks:
– A language that creates a unified way of talking about services that may be
useful in creating knowledge about services and in unifying a community
around services (theoretical framework)
• Productivity, client, providers, service systems, etc.
– A way to understand the phenomena of services by measuring them and
conducting “experiments” for services (empirical framework)
• Simulation techniques are one obvious approach to modeling services
– A way for the community to identify and understand the relationships between
variables (analytic framework)
• Difficulty: The analysis of services involves variables that are intangible and difficult
to directly quantify (trust, loyalty)
– A way to inform the aesthetics of services (design framework)
• How do people like to look at or interface with services?
– A way to inform the process of building and combining components to create
services (engineering framework)
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Academic Initiative:
Some University Courses and Curricula
 NSCU
– Services Masters’ Program
 UC Berkeley
– Institute for Services Science (major offered Spring 2006)
 Tsinghua University and Beijing University
– Service Science courses offered Spring 2006
 UC Merced
– Service Science course and Service Science Minor to be offered in Fall 2006.
 UC Santa Cruz
– Technology and Innovation Management program started Fall 2005
 Centre de Recherche et d'Appui pour la Formation et ses Technologies
– Computer Science Master’s for SSME in 2006
 Carnegie Mellon University
– Master’s course “Managing Service Organizations”, eSourcing
 Northwestern
– Institute on complex systems
 Florida A&M
– Development of Services Track
 Texas A&M
– Development of Services Track
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
CITRIS – University of California, Berkeley
 Center for research (discipline) and development of curriculum
around services
– University “owns” the center
– Professors from Engineering, Computer Science, Economics,
Business, Operations Research, Social Sciences, etc. affiliate with the
center
• Research integration
• Course development and teaching
– Administrative component responsible for spreading the word,
securing grants, finding and capitalizing on collaborative opportunities
with industry and government, coordinating efforts between
departments, etc.
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Michigan Technical University (MTU)
 Services Systems Engineering (SSE)
– Full-blown undergraduate degree based out of the School of Engineering
– Development of degree program through National Science Foundation
grant ($500k)
– Core engineering, business, and social science courses combined with
new service systems engineering specific courses (8)
– Faculty from engineering, business, and social sciences will be teaching
courses
• Two faculty devoted to SSE hired over the next 6 months-year
– To be offered Spring semester 2007/ Fall semester 2007
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Florida Agricultural and Mechanical University (FAMU)
 Historically Black College and University (HBCU)
 Developing services certificate or track with potential to expand to full
blown undergraduate and graduate degrees
 Early stages of services curriculum development
– Focus on niche of services – IT Services
• Capitalizes on current strengths, expertise within participating departments
– Finding champions within Computer Science, Business, and/or Social Sciences
to drive the effort
– Engaging administration to assist in coordinating of efforts across departments
– Grappling with who “owns” the initiative
• House in one department and cross-listed in others
• Create an informal synergy between departments
• Create a Center for Services through the university
– Developing IT services-focused course materials
 Pilot of program Fall semester 2007
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Some lessons learned (so far)
 There is a difference between designing a discipline and designing a
curriculum
• Design of a discipline is the creation of a principled model of a coherent body of
research and practice.
• Design of a curriculum is the creation of a program of study leading to a degree or
certificate.
• Identify the key issues (for a discipline) and key topics (for a curriculum) that need
to be addressed and start from there.
• Determine the goal and then determine what needs to be included to support the
program.
 It cannot be taken for granted that you can start with what you already
have.
– Focus on being right to market, not necessarily first to market.
– Employ a back-to-the-basics research paradigm to create simple useful
models of the complex realities of service.
• Note that the creation of simple will probably require deep analysis to yield
scientifically-based principles.
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Some lessons learned (so far)
 Finding a champion to head the effort and getting buy-in within a university
may be difficult
– Tenure processes (focusing energy toward a new area can be dangerous for junior
faculty; joint appointments can be dangerous)
– Participation across discipline
– Administrative issues (who gets “credit”)
 Finding and focusing on a niche of services seems most effective for smaller
colleges and universities
 Focus on creating competency models is crucial
– Focus on cross-industry for a foundation in domains such as business processes,
information engineering, information architecture and technologies.
– Focus on industry-specific for a foundation in project work, case study, and
knowledge of industry-specific models.
– Development of new kinds of interact ional expertise that combines science,
engineering, social science, management and ethics towards evolution and
agreement on a language that reflect core concepts.
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
IBM’s SSME Course – Website is Here!
http://www.almaden.ibm.com/asr/SSME/coursematerials/
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Interested in getting involved?
 Teaching courses that include or could include complex business to
business service case studies
 Including SSME modules as courses or parts of courses
 Performing research that could be published in the Journal of Service
Research or other relevant journals or conferences
 Encouraging students to intern with business service or service research
organizations and/or Compete for PhD fellowships in services
 Participating in industry-academic rotations
 Developing tools that could enable SSME through current research
 Creating business proposals or grant proposals related to SSME and
service innovation and/or Competing for university research awards
 Participating/speaking at in SSME events and/or Hosting one at your
university
 Creating/developing services related courses, degrees, centers, or
institutes
owensby@us.ibm.com
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SSME
November 19, 2006
© 2006 IBM Corporation
Almaden Services Research
Thank you for your attention!
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SSME
November 19, 2006
© 2006 IBM Corporation