ponencia jorge sanz en iii foro ssme ( services science management engineering) en la uimp 2008
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© 2005 IBM Corporation1 © 2008 IBM Corporation
Algunas Experiencias y Observaciones
Jorge Sanz Almaden Service Research
Servicios, Ingenieria
y Globalizacion
© 2005 IBM Corporation2 © 2008 IBM Corporation
37%
23%
40%
SERVICES
SYSTEMSAND FINANCING
SOFTWARE0
20
40
60
80
100
1982 1988 1994 1998 2004 2006 2007
Year
Rev
enu
e ($
B) Services
Software
Systems
Financing
IBM’s business
2007 Pretax Income Mix Revenue Growth by Segment
© 2005 IBM Corporation3 © 2008 IBM Corporation
Service sector employment
In 2006 the service sector’s share of global employment overtook agriculture for the first time, increasing from 39.5% to 40%. Agriculture decreased from 39.7% to 38.7%. The industry sector accounted for 21.3% of total employment.
- International Labour Organization
http://www.ilo.org/public/english/region/asro/bangkok/public/releases/yr2007/pr07_02sa.htm
© 2005 IBM Corporation4 © 2008 IBM Corporation
Jobs and tasks are changing
-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
Complex Communication
Routine Manual
Non-routine Manual
Routine Cognitive
© 2005 IBM Corporation5 © 2008 IBM Corporation
Service Education, Research, and Innovation
Services account for more than 80 percent of the U.S. gross domestic product, employ a large and growing share of the science and engineering workforce, and are the primary users of information technology. … [The] academic research enterprise has not focused on or been organized to meet the needs of service businesses. Major challenges to services industries that could be taken up by universities include: (1) the adaptation and application of systems and industrial engineering concepts, methodologies, and quality-control processes to service functions and businesses; (2) the integration of technological research and social science, management, and policy research; and the (3) the education and training of engineering and science graduates prepared to deal with management, policy, and social issues.”
National Academy of Engineering (2003). "The Impact of Academic Research on Industrial Performance"
“Our economy is increasingly dependent on services, yet our innovation processes remain oriented to products.”
Stefan Thomke from Harvard Business Review, April 2003
“Services dominate economic activity in developed economies, and yet understanding of innovation in this sector remains very limited…… At this early stage, academic research about innovation in services is not well defined.”
Henry Chesbrough from Financial Times, October 2004
“Services is an understudied field” Matthew Realff, Director, NSF SSE Program
from NY Times article April 18, 2006Academia Dissects the Service Sector, but Is It a Science? - Steve Lohr
© 2005 IBM Corporation6 © 2008 IBM Corporation
Services are different, because they integrate…Many say that “service is just ___<see list of disciplines below>____”Most like general systems theory (abstract) and systems engineering (applied)
A ServiceSystem is Complex
Ope
rations Research
…Industrial E
ngineering
Sys
tems
En
gin
eering
Org
anization T
heoryE
conomics &
Law
Multi-agent
Syste
ms
Informa
tion
Managem
ent
Gam
e T
heory
Managem
ent S
cienceM
ngmnt of In
fo Sys
(MIS
)G
eneral S
ystems
Th
eory
Anthro
pologyC
S/A
rtificial IntelligencesInform
atio
n S
cienceS
ocial Scien
ce/ Poli-
Sci
Cognitive
Science/P
sychM
arketingO
perations M
ngmnt
…
Most disciplines specialize…Service science integrates
Service system entities are dynamic configurations of resources…people, technology, organizations, shared information (e.g., language, laws, measures, models, processes, policies, relationships, rights, etc.)connected to other service system entities by value propositions for the purpose of value-cocreation relationships, with governance mechanisms for dispute resolution.
Que
uing T
heory
© 2005 IBM Corporation7 © 2008 IBM Corporation
What should a service (engineer) know?
I. Theoretical & Practical Foundations1. Concepts & Questions2. Tools & Methods
II. Disciplines & Expert Thinking3. History & Evolution: Economics & Law4. Customer: Marketing & Quality Measure5. Provider: Operations & Productivity Measure6. Authority: Governance & Compliance Measure7. Competitor: Design & Sustainable Innovation Measure8. Privileged Access: Anthropology & People Resources9. Owned Outright: Engineering & Technology Resources10. Shared Access: Computing & Information Resources11. Leased/Contract: Sourcing & Organization Resources12. Future & Investment: Management & Strategy
III. Professions & Complex Communication13. Mindset & Entrepreneurship14. Science & LeadershipFor a service science outline and 200+ annotated references, refer to:http://www.cob.sjsu.edu/ssme/refmenu.asp
T-shaped professionals are inhigh demand because theyhave both depth and breadth
They combine expert thinking(depth in one or more areas)and complex communications(breadth across many areas)
complex communication
expert thinking
© 2005 IBM Corporation8 © 2008 IBM Corporation
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 -
“Succeeding through Service Innovation” Whitepaper: A Framework for Progress(http://www.ifm.eng.cam.ac.uk/ssme/)
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
Call to Create National Service Innovation Roadmaps (SIR) Reports
© 2005 IBM Corporation9 © 2008 IBM Corporation
Service is the application of competence for the benefit of another entity
Service involves at least two entities, one applying competence and another integrating the applied competences with other resources and determining benefit (value co-creation).
We call these interacting entities service systems.
A. Service Provider
• Individual• Organization• Public or Private
C. Service Target: The reality to be transformed or operated on by A, for the sake of B
• People, dimensions of• Business, dimensions of• Products, goods and material systems• Information, codified knowledge
B. Service Client
• Individual• Organization• Public or Private
Forms ofOwnership Relationship
(B on C)
Forms ofService Relationship(A & B co-create value)
Forms ofResponsibility Relationship
(A on C)
Forms ofService Interventions
(A on C, B on C)
Gadrey, J. (2002). The misuse of productivity concepts in services: Lessons from a comparison between France and the United States. In J. Gadrey & F. Gallouj (Eds). Productivity, Innovation, and Knowledge in Services: New Economic and Socio-economic Approaches. Cheltenham UK: Edward Elgar, pp. 26 – 53.
Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a science of service systems. Computer, 40, 71-77.
© 2005 IBM Corporation10 © 2008 IBM Corporation
On Value in Service Systems…
Value depends on the capabilities a system has to survive and accomplish other goals in its environment. Taking advantage of the service another system offers means incorporating improved capabilities. Value can be defined as system improvement in an environment
Experience and knowledge, and the experience and knowledge of others, provide hints as to what is reasonable to exchange for some new capability. But measuring exchange value this way – through human judgment and operationalized in the market – is not necessary for one system to provide value to another.
All ways that systems work together to improve or enhance one another’s capabilities can be seen as being value creating. Some organisms may have symbiotic relationships with others, completely dependent on one another for food, each dependent on capabilities the other provides. Neither may measure or judge explicitly what is exchanged, but each provides service for, and creates value with, the other nonetheless.
Vargo, S. L., Maglio, P. P., and Akaka, M. A. (2008). On value and value co-creation: A service systems and service logic perspective. European Management Journal, 26(3), 145-152.
© 2005 IBM Corporation11 © 2008 IBM Corporation
Interactions are key
Johnson, B., Manyika, J., & Yee, L. (2005). The next revolution in interactions. McKinsey Quarterly, 4, 20-33.
As more 21st century companies come to specialize in core activities and outsource the rest, they have greater need for workers who can interact with other companies, their customers, and their suppliers.
The traditional organization, where a few top managers coordinate the pyramid below them, is being upended.
Raising the productivity of employees whose jobs can’t be automated is the next great performance challenge – and the stakes are high.
Companies that get that right will build complex talent-based competitive advantages that competitors won’t be able to duplicate easily – if at all.
© 2005 IBM Corporation12 © 2008 IBM Corporation
Processes vs. Work practices
ENGAGE /DEAL
TRANSFORM & TRANSITION
DELIVER & OPERATE
MANAGE
PRE-SALESCONCEPT
Service Cycle
1 2 3 4 5 6
8
9
Client
7
© 2005 IBM Corporation13 © 2008 IBM Corporation
Work is investigative, collaborative, iterative, parallel, creative
Client Team
ClientOut-Sourcing
Consultant
CSE Lead TSM2nd CSE
2nd TSM
DEM
PM
TSA Team
C&NHR
DPEPE
Pricer
Support
Proposal
RFP
Ambiguities /Conflicts
Clarification
Update
Client C&N, Lead TSM, DPE
Assumptions
Input
Discover
CollaborativeReview
Submit
Update
RFPThe Client
ClientOut-Sourcing
Consultant
© 2005 IBM Corporation14 © 2008 IBM Corporation
Opportunity for improvement
Existing state Tools used for creating, tracking and
managing outsourcing deals are incompatible, slow and awkward
Critical business data is not collected, shared, standardized, or analyzed to provide business intelligence
Systemic approach to rethink and transform the business with improvements to Win more good deals: ensure that
proposals are deliverable and profitable
Reduce cost of engagement: work efficiency and effectiveness
Value proposition of systemic approach Improve win rate and reduce engagement
cost
Improve customer satisfaction
Improve solution design quality
Organizational Design
Work Practices
Technical Architecture
Transformation for integration, optimization, and sustainability
© 2005 IBM Corporation15 © 2008 IBM Corporation
“Succeeding through Service Innovation”
Service Science is emerging as a distinct field. Its vision is to discover the underlying logic of complex service systems and to establish a common language and shared frameworks for service innovation. To this end, an interdisciplinary approach should be adopted for research and education on service systems.
http://www.ifm.eng.cam.ac.uk/ssme/
For education: Enable graduates from various disciplines to become T-shaped professionals or adaptive innovators; promote SSME education programmes and qualifications; develop a modular template-based SSME curriculum in higher education and extend to other levels of education; explore new teaching methods for SSME education.
For research: Develop an interdisciplinary and intercultural approach to service research; build bridges between disciplines through grand research challenges; establish service system and value proposition as foundational concepts; work with practitioners to create data sets to understand the nature and behaviour of service systems create modelling and simulation tools for service systems.
For business: Establish employment policies and career paths for T-shaped professionals; review existing approaches to service innovation and provide grand challenges for service systems research; provide funding for service systems research; develop appropriate organisational arrangements to enhance industry-academic collaboration; work with stakeholders to include sustainability measures.
For government: Promote service innovation and provide funding for SSME education and research; demonstrate the value of Service Science to government agencies; develop relevant measurements and reliable data on knowledge- intensive service activities; make public service systems more comprehensive and citizen-responsive; encourage public hearings, workshops and briefings with other stakeholders to develop service innovation roadmaps.
Interlude 1
© 2005 IBM Corporation17 © 2008 IBM Corporation
Service Science, SSME – What are we talking about?
Service Science, Management, and Engineering (SSME) is a term introduced by IBM to describe Service Science, an interdisciplinary approach to the study, design, and implementation of services systems – complex systems in which specific arrangements of people and technologies take actions that provide value for others. More precisely, SSME has been defined as the application of science, management, and engineering disciplines to tasks that one organization beneficially performs for and with another.
© 2005 IBM Corporation18 © 2008 IBM Corporation
Service Science is about building common language
Definitions of 'service science' can be misleading. An analogy can be made with Computer Science. The success of CS is not in the definition of a basic science (as in physics or chemistry for example) but more in its ability to bring together diverse disciplines, such as mathematics, electronics and psychology to solve problems that require they all be there and talk a language that demonstrates common purpose.
Service Science may be the same thing - just bigger - as an interdisciplinary umbrella that enables economists, social scientists, mathematicians, computer scientists and legislators (to name a small subset of the necessary disciplines) to cooperate in order to achieve a larger goal - analysis, construction, management and evolution of the most complex systems we have ever attempted to construct.
© 2008 IBM Corporation19
IBM Almaden Research Center
Successful enterprises focus on selected areas of specialization
Enterprise Optimized
Process Optimized
Business Unit
Optimized
External Specialization
Internally Integrated Strategically Partnered Industry Networked
Inte
rnal
Sp
ecia
lizat
ion
Process Centers
Silo 1
Silo 2
Silo 3
Acc
ou
nta
bil
ity
Lev
el
Business Competency
Direct
Control
Execute
Business Components
Silo 1
ExternalPartner
ExternalPartner
Silo 2
Silo 3
Silo 1
Silo 2
Silo 3
Silo 1
Silo 2
Silo 3
Acc
ou
nta
bili
ty L
evel
Business Competency
Direct
Control
Execute
Business Components
“Specialized Enterprise”
© 2008 IBM Corporation20
IBM Almaden Research Center
A Business Component Map is a one-page, simplified view of an enterprise or industry
Control
Execute
Direct Strategic Planning
Analytics Recreational Facilities Oversight
Engineering Reporting
Performance Monitoring
Contracts
Regulatory Reporting
Disaster Management
Public Safety Reporting
Property & Land
Management
Housing Adminis-
tration
Sports Facilities &
Events
Prevention & Awareness
Emergency Response
Service Delivery
Legal
HRDocument Management
Libraries
Heritage Preservation
Development Control
City Planning Public SafetyTransportation
& Infrastructure
Recreation Services
Public Works Services
Municipal Management
Services
Preparedness Planning
Admin Planning
Infrastructure Strategy
Event Planning
Services Strategy
Program Management
Columns are Business Competencies, defined as large business areas with characteristic skills and capabilities, for example, product development or supply chain.
An Accountability Level characterizes the scope and intent of activity and decision-making. The three levels used in CBM are Directing, Controlling and Executing.
Directing is about strategy, overall direction and policy.
Controlling is about monitoring, managing exceptions and tactical decision making
Executing is about doing operational work
Business Components are the essential and unique/non-overlapping building blocks that make up the business/mission of an enterprise. They have the potential to operate independently, in the extreme as a separate unit, shared service, contractor managed or outsourced component. They contain Activities, Resources, Processes, Business Services, Key Performance Indicators
IT
IBM Almaden Research Center
IBM Confidential
Business Service Function
Business Service Function Operation Model Interaction Model
Application 1
CBM also models dependencies among components, thus forming an extended value-proposition ecosystem
© 2008 IBM Corporation22
IBM Almaden Research Center
A business process can be represented by reusing business services provided by business components
Component NameMarket Segment
Planning
DescriptionTo analyze segments
and derive targets
Component NameMarket Segment
Planning
DescriptionTo analyze segments
and derive targets
Component NameBusiness Strategy
DescriptionDefine business strategy
Component NameBusiness Strategy
DescriptionDefine business strategy
Component NameSegment Tracking
DescriptionTrack target segments
Component NameSegment Tracking
DescriptionTrack target segments
Business Plans
Tracking Models & Targets
Market Events
To “Product Management”
business component
Product Portfolio Updates
Product Portfolio Updates
23
Component Business Model to Help Decompose Your Business Experience and Know-how from Thousands of Client Engagements
70+ maps supporting 17 industries 23 enhanced with key performance
indicators (KPI) Over 2,000 trained CBM specialists
armed with the CBM tool 30 CBM patents filed CBM tool license available to clients
Component Business Modeling tool 2.0
Integrates with WebSphere Business Modeler
24
Integrating Component Business Models with Industry Process Models
+ =
IBM is bringing together its Business Process Management Center of Excellence (BPM CoE), IBM Research, and the Global Business Solution Center (GBSC) to map
Component Business Models (CBM) to Industry Process Models
Component Business Models (CBM) and Tool
Industry Process Models in WBM, built by BPM CoE,
leveraging APQC’s Process Classification Framework
Result: business transformation engagements delivered more quickly,
through more industry-specific insights and more powerful CBM Tool
© 2005 IBM Corporation25 © 2008 IBM Corporation
Understanding service systems
Service Science Service science is the systematic
study of service and service systems
SSME SSME is a discipline that brings
together scientific understanding, engineering principles, and management practices to design, create, and deliver service systems
Service Service is the application of
competences for the benefit of another entity
Service System Value co-creation configurations of
integrated resources: people, organizations, shared information and technology
Interlude 2
© 2005 IBM Corporation27 © 2008 IBM Corporation
Resources are the building blocks of service systems
Formal service systems can contractInformal service systems can promise/commit
Trends & Countertrends (Evolve and Balance):Informal <> FormalSocial <> Economic
Political <> LegalRoutine Cognitive Labor <> ComputationRoutine Physical Labor <> Technology
Transportation (Atoms) <> Communication (Bits)Qualitative (Tacit) <> Quantitative (Explicit)
First foundational premise of service science:
Service system entitiesdynamically configure
four types of resources
The named resource isPhysical
orNot-Physical
(physicists resolve disputes)
The named resource hasRights
orNo-Rights
(judges resolve disputeswithin their jurisdictions)
operant operand
Physical
Not-Physical
Rights No-Rights
2. Technology
4.. SharedInformation
1. People
3. Organizations
© 2005 IBM Corporation28 © 2008 IBM Corporation
Value propositions are the building blocks of service system networks
Second foundational premise of service science:
Service system entitiescalculate value from multiple
stakeholder perspectives
A value propositions canbe viewed as a request from
one service system to anotherto run an algorithm
(the value proposition)from the perspectives of
multiple stakeholders accordingto culturally determined
value principles.The four primary stakeholderperspectives are: customer,
provider, authority, and competitor
StakeholderPerspective(the players)
MeasureImpacted
PricingDecision
BasicQuestions
ValuePropositionReasoning
1.Customer Quality(Revenue)
ValueBased
Should we?(offer it)
Model of customer: Do customers want it? Is there a market? How large? Growth rate?
2.Provider Productivity(Profit)
CostPlus
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 andFines)
Regulated May we?(offer anddeliver 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(Marketshare)
Strategic Will we?(invest tomake it so)
Model of competitor: Does it put us ahead? Can we stay ahead? Does it differentiate us from the competition?
Value propositions coordinate & motivate resource access
© 2005 IBM Corporation29 © 2008 IBM Corporation
Special Issue on SSME
Toward a conceptual foundation for service science: Contributions from service-dominant logic R. F. Lusch, S. L. Vargo, and G. WesselsDesigning a discipline in service science R. J. GlushkoService science: Catalyst for change in business school curricula M. M. Davis and I. BerdrowService science: At the intersection of management, social, and engineering sciences R. C. LarsonComplexity of service value networks: Conceptualization and empirical investigation R. C. Basole and W. B. RouseService system fundamentals: Work system, value chain, and life cycle S. AlterEstimating value in service systems: A case study of a repair service system N. Caswell et al.BEAM: A framework for business ecosystem analysis and modeling C. H. Tian, B. K. Ray, J. Lee, R. Cao, and W. DingPatterns of innovation in service industries I. MilesBusiness services as communication patterns: A work practice approach for analyzing service encounters R. J. Clarke and A. G. NilssonLegal research topics in user-centric services O. Pitkänen et al.Managed service paradox N. Leon and A. C. DaviesImproving service delivery through integrated quality initiatives: A case study J. Hickey and J. SiegelPredicting customer choice in services using discrete choice analysis R. Verma et al.
© 2005 IBM Corporation30 © 2008 IBM Corporation
Progress Toward Service Science…
Education 198 courses, programs, or degrees
established in 42 countries 12 centers, seminars, or groups
established
Government 11+ programs for service research
and education in 11 countries $1B+ committed worldwide
Industry SRII established to promote service
research and innovation agenda, with $1M in funding from IBM, Oracle, Xerox, Microsoft and others
Associations AIS – Service Science SIG INFORMS – Service Science Section
© 2005 IBM Corporation31 © 2008 IBM Corporation
Access rights are the building blocks of service system ecology
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
Third foundational premise of service science:
The access rights associated with customer and provider resources
are reconfigured by mutually agreed to value propositions
relationships
© 2005 IBM Corporation32 © 2008 IBM Corporation
http://www.ibm.com/university/ssme
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