urban systems and service innovation 20100420 - … systems and service innovation: cities and...
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© 2010 IBM CorporationIBM UP (University Programs)1
Urban Systems and Service Innovation: Cities and Universities Partnering to Enhance Sustainability
Dr. James (“Jim”) C. Spohrer
Director, IBM University Programs (IBM UP)
[email protected] Almaden Research Center, San Jose, CA 95120 USA
For: Definitions Discussions
April 17, 2010
“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM
“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org“Cities learning from cities learning from cities.” – Fundacion Metropoli
“Think global, act local.” – Geddes
“The future is born in universities.” – Kurilov“The best way to predict the future is to build it.” – Kay
“The future is already here0 It is just not evenly distributed.” – Gibbons
“Real-world problems do not respect discipline boundaries.” – Popper
“Today’s problems come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells
© 2010 IBM CorporationIBM UP (University Programs)2
Outline
1. Quality of life: Everyday we depend on systems)
2. The world’s system of systems ($54 trillion value, $4 trillion waste)
3. Grand challenges: The race between education and catastrophe
4. A vital partnerships: Cities and universities (get these building blocks right)
5. IBM University Programs: Doing our part (2010 key directions, 5 R’s)
6. Trend: Growing importance of service systems (IT-enabled division-of-labor)
7. Future skill needs: T-shaped (deep & broad) service system experts
8. Smarter = Sustainable innovation (reduce waste, expand capabilities)
© 2010 IBM CorporationIBM University Programs (IBM UP)3
Quality of life: Everyday we depend on systems)
A. Systems that focus on flow of things that humans need (~15%)1. Transportation & supply chain
2. Water & waste recycling/Climate & green tech
3. Food & products manufacturing
4. Energy & electricity grid
5. Information and Communication Technologies (ICT access)
B. Systems that focus on human activity and development (~70%)6. Buildings & construction (smart spaces) (5%)
7. Retail & hospitality/Media & entertainment (tourism) (23%)
8. Banking & finance/Business & consulting (wealthy) (21%)
9. Healthcare & family life (healthy) (10%)
10. Education & work life/Professional jobs & entrepreneurship (wise) (9%)
C. Systems that focus on human governance - security and opportunity (~15%)11. Cities & security for families and professionals (property tax)
12. States/regions & development opportunities/investments (sales tax)
13. Nations/NGOs & rights/rules/incentives/policies/laws (income tax)
(Quality of Service & Jobs) + Returns + Security + SustainabilityMeasure -> Quality, Productivity, Compliance, “Smarter”
“Smarter” = Sustainable Innovation (continuously reduce waste, expand capabilities)
© 2010 IBM CorporationIBM University Programs (IBM UP)4
Communication$ 3.96 Tn
Transportation$ 6.95 Tn
Leisure / Recreation / Clothing
$ 7.80 Tn
Healthcare$ 4.27 Tn
Food$ 4.89 Tn
Infrastructure$ 12.54 Tn
Govt. & Safety$ 5.21 Tn
Finance$ 4.58 Tn
Electricity$ 2.94 Tn
Education$ 1.36 Tn
Water$ 0.13 Tn
Global system-of-systems$54 Trillion
(100% of WW 2008 GDP)
Same IndustryBusiness SupportIT SystemsEnergy ResourcesMachineryMaterials Trade
Legend for system inputs
Note:
1. Size of bubbles represents systems’ economic values
2. Arrows represent the strength of systems’ interaction
Source: IBV analysis based on OECD
Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis)
This chart shows ‘systems‘ (not ‘industries‘)
� Our planet is a complex system-of-systems
1 Tn
© 2010 IBM CorporationIBM University Programs (IBM UP)5
Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated
Global economic value of
System-of-systems
$54 Trillion100% of WW 2008 GDP
Inefficiencies$15 Trillion28% of WW 2008 GDP
Improvement potential
$4 Trillion7% of WW 2008 GDP
How to read the chart:
For example, the Healthcare system‘s value is $4,270B. It carries an estimated inefficiency of 42%. From that level of 42% inefficiency, economists estimate that ~34% can be eliminated (= 34% x 42%).
� We now have the capabilities to manage a system-of-systems planet
Source: IBM economists survey 2009; n= 480
System inefficiency as % of total economic value
Impro
vem
ent
pote
ntial as
% o
f sys
tem
in
eff
icie
ncy
Education1,360
Building & Transport Infrastructure
12,540
Healthcare4,270
Government & Safety5,210
Electricity2,940
Financial4,580
Food & Water4,890
Transportation (Goods & Passenger)
6,950
Leisure / Recreation / Clothing
7,800
Communication3,960
Analysis of inefficiencies in the planet‘s system-of-systems
Note: Size of the bubble indicate absolute value of the system in USD Billions
42%
34%
This chart shows ‘systems‘ (not ‘industries‘)
15%
20%
25%
30%
35%
40%
15% 20% 25% 30% 35% 40% 45%
© 2010 IBM CorporationIBM University Programs (IBM UP)6
How do we involve universities?How do weave a “total solution” that includes universities?
© 2010 IBM CorporationIBM University Programs (IBM UP)7
IBM’s Smarter Planet Grand Challenge: Smarter Systems
A. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
Traffic, Rail
2. Water & Waste/Climate & Green tech
Water
3. Food & Products
Food, Products
4. Energy & Electricity
Energy, Oil
5. Information & Communication Technology
Intelligence, Telecom, Cloud Computing
B. Systems that focus on human activity & development
6. Buildings & Construction (smart spaces)
Buildings, Infrastructure
7. Retail & Hospitality/Media & Entertainment (tourism)
Retail
8. Banking & Finance/Business & Consulting
Banking, Stimulus
9. Healthcare & Family Life
Healthcare
10. Education & Work Life/Jobs & Entrepreneurship
Education, Work
C. Systems that focus on human governance
11. City & Security
Cites, Public Safety, Infrastructure
12. State/Region & Development
13. Nation & Rights
Government, Stimulus
© 2010 IBM CorporationIBM University Programs (IBM UP)8
NAE’s Engineering Grand Challenges: Smarter SystemsA. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
Restore and enhance urban infrastructure
2. Water & Waste/Climate & Green tech
Provide access to clear water
3. Food & Products
Manager nitrogen cycle
4. Energy & Electricity
Make solar energy economical
Provide energy from fusion
Develop carbon sequestration methods
5. Information & Communication Technology
Enhance virtual reality
Secure cyberspace
Reverse engineer the brain
B. Systems that focus on human activity & development
6. Buildings & Construction (smart spaces)
Restore and enhance urban infrastructure
7. Retail & Hospitality/Media & Entertainment (tourism)
Enhance virtual reality
8. Banking & Finance/Business & Consulting
9. Healthcare & Family Life
Advance health informatics
Engineer better medicines
Reverse engineer the brain
10. Education & Work Life/Jobs & Entrepreneurship
Advance personalized learning
Engineer the tools of scientific discovery
C. Systems that focus on human governance
11. City & Security
Restore and improve urban infrastructure
Secure cyberspace
Prevent nuclear terror
12. State/Region & Development
13. Nation & Rights
© 2010 IBM CorporationIBM University Programs (IBM UP)9
Nations’ Grand Challenge: Quality of Life (how to define?)Smarter Systems = (Quality of Service & Jobs) + Returns + Security + Sustainability
A. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
2. Water & Waste/Climate & Green tech
Climate and geography
3. Food & Products
4. Energy & Electricity
5. Information & Communication Technology
Material well being
B. Systems that focus on human activity & development
6. Buildings & Construction (smart spaces)
Material well-being
7. Retail & Hospitality/Media & Entertainment (tourism)
Material well-being
8. Banking & Finance/Business & Consulting
Material well-being
9. Healthcare & Family Life
Health & Family Life
10. Education & Work Life/Jobs & Entrepreneurship
Job security
Gender equality
C. Systems that focus on human governance
11. City & Security
Community Life
Political stability and security
12. State/Region & Development
Climate and geography
13. Nation & Rights
Political freedom
Gender equality
Political stability and security
© 2010 IBM CorporationIBM University Programs (IBM UP)10
A. Flow of things1. Transportation: Traffic congestion; accidents and injury
2. Water: Access to clean water; waste disposal costs
3. Food: Safety of food supply; toxins in toys, products, etc.
4. Energy: Energy shortage, pollution
5. Information: Equitable access to info and comm resources
B. Human activity & development6. Buildings: Inefficient buildings, environmental stress (noise, etc.)
7. Retail: Access to recreational resources
8. Banking: Boom and bust business cycles, investment bubbles
9. Healthcare: Pandemic threats; cost of healthcare
10. Education: High school drop out rate; cost of education
C. Governing11. Cities: Security and tax burden
12. States: Infrastructure maintenance and tax burden
13. Nations: Justice system overburdened and tax burden
Cities: System of Systems (Mini-Nations)
© 2010 IBM CorporationIBM UP (University Programs)11
Universities: System of Systems (Mini-Cities)
A. Flow of things1. Transportation: Traffic congestion; parking shortages.
2. Water: Access costs; reduce waste
3. Food: Safety; reduce waste.
4. Energy: Access costs; reduce waste
5. Information: Cost of keeping up best practices.
B. Human activity & development6. Buildings: Housing shortages; Inefficient buildings
7. Retail: Access and boundaries. Marketing.
8. Banking: Endowment growth; Cost controls
9. Healthcare: Pandemic threat. Operations.
10. Education: Cost of keeping up best practices..
C. Governing11. Cities: Town & gown relationship.
12. States: Development partnerships..
13. Nations: Compliance and alignment.
© 2010 IBM CorporationIBM UP (University Programs)12
A Vital Partnership: Cities and universities
Citizens are demanding more urban servicesLarson & Odonoi (MIT) Urban Operations Research.
Citizens are demanding more urban services, by type, quantity, and quality. Yet the ability of most cities in the United States and elsewhere to pay for additional services has been severely strained0 For our purposes, a decision is an irrevocable allocation of resources. Thus, this book will deal with the allocation or deployment of the resources of urban service systems, including personnel, equipment, and various service-improving technologies. From this viewpoint, urban operations research can be thought of as a decision-aiding technology, one to assist urban managers in improving the deployment of their resources. Most deployments occur spatially throughout the city, so much of our work will have a strong spatial component.
Higher education can respondUrban Serving University Coalition (USU) A Vital Partnership: Great Cities, Great Universities
Higher education can respond to the challenges facing our cities and metropolitan regions, becoming the R&D partners of cities that evaluate and deploy potential innovations. Never before has this agenda had greater urgency for our nation. For example, demographic changes within the United States have been dramatic, with nearly eight in ten Americans now living in cities. According to the Brookings Institution, while the top 100 metropolitan areas make up only 12% of the land mass, they produce fully 75% of the gross domestic product, generate 78% of competitive patents, and account for 68% of the nation’s jobs. Increasingly, the prosperity of our cities and metro areas is inextricably linked to our national prosperity.
Demographic projection: By 2050 over 70% of the world’s population will live in cities
13
Universities Evolving Urban Innovation Centers
University sub-systemsDisciplines in Schools (circles)
Innovation Centers (squares)E.g., CMU Website (2009)
“Research Centers:where it all happens –to solve real-world problems”
Disciplines in SchoolsAward degreesSingle-discipline focusResearch discipline problems
Innovation Centers (ICs)Industry/government sponsorsMulti-disciplinary teamsResearch real-world systems
D
D
D
D
D
D
Engin
eerin
g
Schoo
l
Socia
l Sci
ence
s,
Hum
aniti
esBusinessSchool
Sciences & Math
water & waste transportation
healthenergy/grid
e-government
I-Sch
ool
Desig
n
Pro
fessio
nal
Stu
die
s
food & supply chain
14
“Act Local”: Connect to Home City
UNIVERSITIES:THE INNOVATION CENTERS OF GREAT CITIES
CITIES:THE LIVING LABS FOR UNIVERSITIES
IBM UPConnect
UniversitiesTo Their
Cities
let’s work towards smarter citieslet’s start with smarter education
15
“Think Global”: Connect to Sister Cities
World as System of SystemsWorld (light blue - largest)
Nations (green - large)
Regions (dark blue - medium)
Cities (yellow - small)
Universities (red - smallest)
Cities as System of Systems-Transportation & Supply Chain-Water & Waste Recycling-Food & Products ((Nano)-Energy & Electricity-Information/ICT & Cloud (Info)-Buildings & Construction-Retail & Hospitality/Media & Entertainment-Banking & Finance-Healthcare & Family (Bio)-Education & Professions (Cogno)-Government (City, State, Nation)
Nations: Innovation Opportunities- GDP/Capita (level and growth rate)- Energy/Capita (fossil and renewable)
Developed MarketNations
(> $20K GDP/Capita)
Emerging MarketNations
(< $20K GDP/Capita)
IBM UP: Tandem Awards: Increasing university linkages (knowledge exchange interactions)
© 2010 IBM CorporationIBM University Programs (IBM UP)16
IBM University Programs (IBM UP): 2010 Focus “30 cities”
© 2010 IBM CorporationIBM University Programs (IBM UP)17
IBM University Programs (IBM UP): 2010 Focus “5 R’s”
1. ResearchAwards that connect university and IBM researchers/professionals to work on grand challenges
https://www.ibm.com/developerworks/university/research/index.html
2. ReadinessAccess to IBM tools, methods, and course materials to develop skills
https://www.ibm.com/developerworks/university/academicinitiative/
3. RecruitingJobs on global teams working to build a smarter planet - nation by nation, system by system
http://www.ibm.com/jobs
4. RevenuePublic-private partnerships that build great universities, great cities, and improve quality of life
http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html
5. ResponsibilityIBM employees share their expertise, time, and resources with universities in community service
http://www.ibm.com/ibm/ibmgives/
© 2010 IBM CorporationIBM University Programs (IBM UP)18
IBM University Programs (IBM UP): 2010 Focus “6 Priorities”
1. Smarter Cities (A Vital Partnership: Great Cities & Great Universities)A. Holistic Modeling & Analytics, B. STEM Education Pipeline, C. Jobs & Entrepreneurship
Establish Urban Sustainability and Innovation Centers (start with http://cityforward.org)
2. Cloud ComputingIBM Cloud Academy, IBM Academic Cloud, Massive Analytics
3. Ecosystem AlignmentInternal and external coordination and collaborations (win-win relationships)
4. IBM on CampusIBM Centers for Advanced Study, IBM Innovation Centers, IBM Research Collaboratories
5. Growth MarketsEnablement, Twin Cities, Sister Cities
6. Awards ProgramsShared University Research, Open Collaborative Research, Faculty Awards, PhD Fellowships
© 2010 IBM CorporationIBM University Programs (IBM UP)19
Priority 1: Urban Sustainability & Innovation Centers at Universities
A. Holistic Modeling & Analytics (Urban Service Systems)Modeling and simulating cities will push state-of-the-art capabilities for planning
interventions in complex system of systems
Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system
Real-world data and advanced analytic tools are increasingly available
B. STEM Education Pipeline (Science Tech Engineering Math)City simulation and intervention planning tools can engage high school students and
build STEM skills
Role-playing games can prepare students for real-world projects
C. Entrepreneurship & Job CreationCity modeling and intervention planning tools can engage university students and
build entrepreneurial skills
Grand challenge competitions can lead to new enterprises
Note: Universities are mini-cities within cities (building blocks to get right).
© 2010 IBM CorporationIBM UP (University Programs)20
A. Holistic Modeling & AnalyticsExample: FIU’s Terrafly
© 2010 IBM CorporationIBM UP (University Programs)21
B. K-12 STEM Education Pipeline
“Imagine a better system, and use STEM language to explain why it is better”STEM = Science, Technology, Engineering, and MathematicsSee NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635
See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning
� Challenge-based Project to Design Improved Systems
– K - Transportation & Supply Chain
– 1 - Water & Waste Recycling
– 2 - Food & Products (Nano)
– 3 - Energy & Electric Grid
– 4 – Information/ICT & Cloud (Info)
– 5 - Buildings & Construction
– 6 – Retail & Hospitality/Media & Entertainment (tourism)
– 7 – Banking & Finance/Business & Consulting
– 8 – Healthcare & Family Life (Bio)
– 9 - Education & Work Life/Jobs & Entrepreneurship (Cogno)
– 10 – City (Government)
– 11 – State/Region (Government)
– 12 – Nation (Government)
– Higher Ed – T-shaped teamwork, deep & broad education
– Professional Life – T-shaped teamwork, series of projects
Systemsthat focus onGoverning
Systemsthat focus on
Human Activities andDevelopment
Systemsthat focus onFlow of things
© 2010 IBM CorporationIBM University Programs (IBM UP)22
C. Entrepreneurship & Job Creation
1. Model Systems
2. Connect/capture Data
3. Analyze, Improve
4. Optimize, Automate
5. Discipline Specialists
•Transportation
•Water and waste
•Energy and electricity
•Buildings
•Healthcare/Education
•Cities/Government
General
Methods
& Techniques
Specific
Technologies
Run Transform Innovate
Specific
Systems
1. Synapsense, SensorTronics
2. Infosphere Streams, ILOG, COGNOS, SPSS
3. WS, Tivoli, Rational, DB2, etc.
4. BAO, Green Sigma
Cross Industry
Competencies
Industry Specific
Competencies
Jobs
Systems Engineering/Analytics/BAO/SSME
Research
to improve systems
fuels
Specialists
Consultant
Project Manager
Sales Architect
Operations
© 2010 IBM CorporationIBM University Programs (IBM UP)23
IBM Jobs: Project teams focus on customer needs
1. Consultant(trusted advisor to customer)
- a value proposition to addressproblems or opportunities and
enhance value co-creationrelationships
2. Sales- a signed contract that
defines work, outcomes, solution,rewards and risks
for all parties
4. Project Manager(often with co-PM from customer side)
a detailed project plan thatbalances time, costs, skills availability,
and other resources, as well asadaptive realization of plan
3. Architect(systems engineer, IT & enterprise architect)
-An elegant solution design that satisfiesfunctional and non-functional
constraints across thesystem life-cycle
5. Specialists(systems engineer, Research, engineer,
Industry specialist, application, technician, data, analyst, professional, agent)
-a compelling working system(leading-edge prototype systems
from Research)
~10%
~10% ~5%
~5%
~45%
6. Enterprise OperationsAdministrative Services, Other, Marketing & Communications
Finance, Supply Chain, Manufacturing, Human Resources, Legal,
General Executive Management
~25%
IBM Employees1. ~10% Consultant2. ~10% Sales3. ~5% Architect4. ~5% Project Manager5. ~45% Specialists6. ~25% Enterprise Operations
Project Work:90% B2B – Business to Business10% B2G – Business to Government(i.e., “Smarter Planet” projects)
© 2009 IBM CorporationGlobal University Programs24
The Big Trend: “The future is service1”
-1000K -10K -100 -1 +100
HunterGatherer(physical)
Agriculture(physical)
Manufacturing(physical)
Service(social)
Human Labor
100%
Time (years)
Physical: mostly interact
with things
Social: mostly interact with others
Service2 growth asIT-enableddivision of labor
Service1 growth asintangible outputs
© 2009 IBM CorporationGlobal University Programs25
The Big Trend: “The future is service2”
� More population (people & organizations) creates opportunity for specialization – Specialization (division of labor – Adam Smith) can improve productive capacity
� More specialization (outsourcing) creates need for coordination mechanisms– Local interactions become distributed across space, time, and scale (transaction costs – Coase)
– Local optimization may not lead to global performance improvements
� More coordination (IT can lower costs) creates service growth (value-cocreation)– IT integrates across space, time, and scale improving global and local performance
– Increase the ratio of productive interactions to unproductive interactions with others
Service Growth (Value-Cocreation)increase mutually beneficial interactionsdecrease unproductive interactionsT-shaped people to lower coordination costs
Population (People & Organizations)entities interacting
Specialization (Outsourcing)space, time, scale distribution
Coordination (Information Technology)space, time, scale integration
Service2 growth asIT-enableddivision of labor
© 2010 IBM CorporationIBM University Programs (IBM UP)26
T-Shaped Professionals: Ready for T-eamwork!
Many disciplines(understanding & communications)
Many systems(understanding & communications)
Deep in
one d
iscip
line
(ana
lytic th
inkin
g &
pro
ble
m so
lving)
Deep in
one s
yste
m(a
na
lytic th
inkin
g &
pro
ble
m so
lving)
Many team-oriented service projects completed(resume: outcomes, accomplishments & awards)
SSMED = Service Science, Management, Engineering & Design
© 2010 IBM CorporationIBM University Programs (IBM UP)27
Service Science: Transdisciplinary System-of-Systems FrameworkSystems that focus on flows of things Systems that governSystems that support people’s activities
transportation & supply chain water &
waste
food &products
energy & electricity
building & construction
healthcare& family
retail &hospitality banking
& finance
ICT &cloud
education &work
citysecure
statescale
nationlaws
social sciences
behavioral sciences
management sciences
political sciences
learning sciences
cognitive sciences
system sciences
information sciences
organization sciences
decision sciences
run professions
transform professions
innovate professions
e.g., econ & law
e.g., marketing
e.g., operations
e.g., public policy
e.g., game theoryand strategy
e.g., psychology
e.g., industrial eng.
e.g., computer sci
e.g., knowledge mgmt
e.g., statistics
e.g., knowledge worker
e.g., consultant
e.g., entrepreneur
sta
kehold
ers
Customer
Provider
Authority
Competitors
resourc
es
People
Technology
Information
Organizations
change
History(Data Analytics)
Future(Roadmap)
valu
e
Run
Transform(Copy)
Innovate(Invent)
Stakeholders (As Is)
Resources (As Is)
Change (Has Been & Might Become)
Value (To Be – Investment Opportunities)
© 2010 IBM CorporationIBM UP (University Programs)28
Smarter = Sustainable Innovation (reduce waste, expand capabilities)
Computational System
Building Smarter Technologies
Requires investment roadmap
Service Systems: Stakeholders & Resources
1. People
2. Technology
3. Shared Information
4. Organizations
connected by win-win value propositions
Building Smarter Universities & Cities
Requires investment roadmap
© 2010 IBM CorporationIBM University Programs (IBM UP)29
Thank-you! And)
let’s focus smarter education on0 0sustainable innovations for smarter cities
8helping to build a smarter planet
instrumented+interconnected+intelligent(http://www.ibm.com/think)
“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM
“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org“Cities learning from cities learning from cities.” – Fundacion Metropoli
“Think global, act local.” – Geddes
“The future is born in universities.” – Kurilov“The best way to predict the future is to build it.” – Kay
“The future is already here. It is just not evenly distributed.” – Gibbons
“Real-world problems do not respect discipline boundaries.” – Popper
“Today’s problems come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells
30
http://www.ibm.com/think
Dr. James (“Jim”) C. SpohrerDirector of IBM University Programs (IBM UP) since 2009, Jim founded IBM's first Service Research group in 2003 at the Almaden Research Center with a focus on STEM (Science Technology Engineering and Math) for Service Sector innovations. He led this group to attain ten times return on investment with four IBM outstanding and eleven accomplishment awards over seven years. Working with service research pioneers from many academic disciplines, Jim advocates for Service Science, Management, Engineering, and Design (SSMED) as an integrative extended-STEM framework for global competency development, economic growth, and advancement of science. In 2000, Jim became the founding CTO of IBM’s first Venture Capital Relations group in Silicon Valley. In the mid 1990’s, he lead Apple Computer’s Learning Technologies group, where he was awarded DEST (Distinguished Engineer Scientist and Technologist) Jim received a Ph.D. in Computer Science/Artificial Intelligence from Yale University and a B.S. in Physics from MIT.
IBM University Programs (IBM)Gibbons said “The future is already here. It's just not very evenly distributed.". What if walking onto a university campus was like walking into the future. In a way it is, because the students at universities will someday fill roles in business and society – they are the future doers in all systems. Also, some of the important ideas from university research centers will someday become commonplace. More and more universities, especially urban serving research universities, are like living labs for the cities that host them. Universities are in fact small cities within larger cities. Many universities today have more students than the populations of some cities in past centuries, and the students have much better technologies for sharing and building knowledge.
There is more and more demand for Science Technology Engineering and Math (STEM) driven service innovations that can continuously improve the reliability of complex systems that serve customers in modern societies (UK Royal Society "Hidden Wealth: Science in Service Innovations" report, July 2009). Service innovations that improve reliability should also improve (a) the quality of service as judged by customers, (b) the productivity of provisioning service as judged by providers, and (c) the compliance as judged by regulatory or governing authorities as well as society as a whole. Furthermore, service innovations are what keep business systems competitive in a dynamic world characterized by globalization, driven in part by business model and technological change. Therefore, service innovations need to be sustainable innovations, both from an environmental perspective as well as an investment roadmap perspective that leads to continuous opportunities for individuals, businesses, and institutions.
Service science is a global initiative to improve service system innovation tools and methods. Service science may someday lead to a Moore’s Law for service system improvement. This will require a Computer-Aided Design (CAD) tool that can be used by T-shaped professionals to plan and implement more service innovation projects. Improved service systems that continuously improve locally and globally can help achieve the vision of a Smarter Planet.
© 2010 IBM CorporationIBM University Programs (IBM UP)31
Evolving Service2: Specializations, Technologies, and Rules
Show Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html
32
Most Wanted: A CAD for service systems(CAD = Computer Aided Design Tool)
CBM: Component Business Model
WBM and RUP: Work Practices & Processes
SOA: Technical Service-Oriented Architecture
Key Performance Indicators (KPIs)IBM IBV: Component Business ModelsIEEE Computer, Jan 2007
33
How many entities to study?~10B service systems - modular value creation systems
• Nations (~100)– Regions (~1000)
• Cities (~10,000)– Educational Institutions
(~100,000)– Healthcare Institutions
(~100,000)– Other Enterprises
(~10,000,000)» Largest 2000» >50% GDP WW
– Families (~1B)– Persons (~10B)
• Balance/Improve– Quality of Life
• GDP/Capita– Quality of Service
» Customer Experience
– Quality of Jobs
– Sustainability• GDP/Energy-Unit
– % Fossil– % Renewable
Nation
Region(e.g., State)
City
EducationalInstitution
HealthcareInstitution
OtherEnterprises(job roles)
Family(customers)
Person(providers)
34
How entities (service systems) learn and change over timeHistory and future of Run-Transform-Innovate investment choices
• Diverse Types– Persons (Individuals)
• Families
– Regional Entities• Universities• Hospitals• Cities• States/Provinces• Nations
– Other Enterprises• Businesses• Non-profits
• Learning & Change– Run = use existing
knowledge or standard practices (use)
– Transform = adopt a new best practice (copy)
– Innovate = create a new best practice (invent)
Transform
Innovate
Invest in each Invest in each
type of changetype of changeR
un
March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.
exp
loit
exp
lore
35
How entities (service systems) interactIncentives & Rules
Ecology(Populations & Diversity)
Entities(Service Systems)
Interactions(Service Networks)
Outcomes(Value Changes)
Value PropositionBased Interactions (Incentives)
Governance MechanismBased Interactions (Rules)
Access Rights
(Relationships)Measures
(Rankings of Entities)
Resources
(Roles in Processes)Stakeholders
(Perspectives)
win-win
lose-lose win-lose
lose-win
Identity(Aspirations/Lifecycle)
Reputation(Opportunities/Variety)
Resources: People, Technology, Information, OrganizationsStakeholders: Customers, Providers, Authorities, CompetitorsMeasures: Quality, Productivity, Compliance, Sustainable InnovationAccess Rights: Own, Lease, Shared, Privileged
© 2010 IBM CorporationIBM University Programs (IBM UP)36
Reports: 3 Nations
� UK Royal Society� Germany MARS� US ASU CSL
37
• Fitzsimmons & Fitzsimmons– Graduate Students– Schools of Engineering
• Teboul– Undergraduates– Schools of Business– Busy execs (4 hour read)
• Ricketts– Practitioners– Manufacturers In Transition
• And 200 other books0– Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs,
Aquilano; Davis, Heineke; Heskett, Sasser, Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter; Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels, Warf; Checkland, Holwell; Cooper,Edgett; Hopp, Spearman; Womack, Jones; Johnston; Heizer, Render; Milgrom, Roberts; Norman; Pine, Gilmore; Sterman; Weinberg; Woods, Degramo; Wooldridge; Wright; etc.
�Reaching the Goal: How Managers Improve
a Services Business Using Goldratt’s
Theory of Constraints�By John Ricketts, IBM
�Service Management:Operations, Strategy,
and Information Technology
�By Fitzsimmons and
Fitzsimmons, UTexas
�Service Is Front Stage:Positioning services for
value advantage�By James Teboul, INSEAD
Teaching0
For details: http://www.cob.sjsu.edu/ssme/refmenu.asp
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Teaching: IBM SSME Website: Creating T-shaped people
http://www.ibm.com/developerworks/spaces/ssme
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Changing Nature of Jobs: Deep & Broad
-10
-5
0
5
10
15
1969 1974 1979 1984 1989 1994 1999
Levy, F, & Murnane, R. J. (2004). The New Division of Labor:How Computers Are Creating the Next Job Market. Princeton University Press.
Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT)
Expert Thinking(deep)
Complex Communication(broad)
Routine Manual
Non-routine Manual
Routine Cognitive
Increasing usage of job descriptive terms
40
A Service System Innovation Framework
“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.
Innovate (inside and outside) systems that create value
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Many definitions of service• Economics
– Service1 = economic activities that are not agriculture or manufacturing– Service3 = a transformation that one economic entity performs with the permission of a second entity, that
transforms the second entity or a possession of the second entity– Service4 = an exchange between economic entities that does not transfer ownership of a physical thing.
• Service Science– Service2 = value-cocreation phenomena, specifically a mutually beneficial outcome proposed,
agreed to, and realized by two or more service system entities interacting. Service system entities can be people, businesses, nations, and any other economic entities with legal rights, such as the ability to own property, enter into binding contracts, etc. Quantifiable measures associated with service system entity interactions over the life-time of the entity, include quality, productivity, compliance, and sustainable innovation measures. Service system entities configure four types of resources, accessible by four types of access rights, and reason about four types of stakeholders when designing value-cocreation interactions, and evaluating them via their processes of valuing.
• Operations– Service5 = a production process that requires inputs from a customer entity
• Computer Science– Service6 = a modular capability that can be computationally accessed and composed with others
• Systems Engineering– Service7 = a system (with inputs, outputs, and capacity limits) which is interconnected with other systems
that may seek to access its capabilities to create benefits, and in which local optimization of the system interactions may not lead to global performance improvements
• Design and Psychology– Service8 = an experience of a customer entity that results from that entity interacting with a provider entities
offering
• Marketing– Service9 = the application of competence for the benefit of another entity– Service10 = a customer-provider interaction that creates mutual benefits