Description
Service Science, an emerging multidiscipline to accelerate the coevolution of business-technology-work innovations
Accelerating Change 2004
November 6, 2004 | Contact Jim Spohrer (spohrer@usibmcom!
"irector, Alma#en Services $esearch
%pen %&&ice 'our( )e# 4*+pm ,S-, 40.*/20*1/2.
http(22alma#enibmcom2coevolution
http(22333alma#enibmcom2asr
Service Science, an emerging multi#iscipline to
accelerate the coevolution o& business*technolog4*3or5
innovations
6n#ustr4*Aca#emic*
7overnment
Collaboration Nee#e#
2
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
-o#a4;s -al5
?
Part 1: Zooming in on accelerating change – what’s really changing?
12,000,000,000 4ear vie3 < emergence o& li&e an# human culture
12,000 4ear vie3 < rise in human population
200 4ear vie3 < rise o& the large managerial &irm, an# this thing calle# services <
3hat;s that all about=
?
Part 2: re services even the slightest bit interesting?
A#am Smith;s vie3 < services are parasites on the rest o& the econom4
Colin Clar5;s vie3 < Smith, :ar>, Stalin ma#e the error o& neglecting services
"ramatic gro3th o& service sector < the intangible econom4
?mergence o& Service Science #iscipline
?
Part !: "o what? #hat’s the big deal?
@rom loosel4 gui#e# to #esigne# evolution o& capabilitiesA (ma4be!
)or5*capabilit4 evolution (collaboration, augmentation, #elegation, automation!
B
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
,art 1( Cooming in on accelerating change
?
)hat;s reall4 changing=
?
12,000,000,000 4ear vie3 < emergence o& li&e an# human culture
?
12,000 4ear vie3 < rise in human population
?
200 4ear vie3 < rise o& the large managerial &irm, an# this thing
calle# services
< 3hat;s that all about=
4
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
129 4ears o& capabilit4 evolution D accelerating change
9illion Eears Ago Natural Capabilities
12 9ig 9ang (?:S-!
11+ :il54 )a4 (Atoms!
. Sun (?nerg4!
4+ ?arth
olecules!
B+ 9acteria (Cell!
2+ Sponge (9o#4!
00 Clams (Nerves!
0+ -rilobites (9rains!
02 9ees (S3arms!
006+ :ass ?>tinctions
0002 'umans
-ools D Clans
Co*evolution
7enerations Ago 'uman Capabilities
100,000 Speech
0+0 Agriculture
+00 )riting
400 Fibraries
40 Gniversities
24 ,rinting
16 Accurate Cloc5s
+ -elephone
4 $a#io
B -elevision
2 Computer
1 6nternet2e*:ail
0 7,S, "H", )":
$lobal %rain: &he 'volution o( )ass )ind (rom the %ig %ang to the 21st *entury
b4 'o3ar# 9loom
+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
12,000 4ears( 'uman population gro3th &rom +: to 69 people
200 4ears( $ise o& the mo#ern managerial &irm
?
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&he +isible ,and: &he )anagerial -evolution in merican %usiness
b4 Al&re# "upont Chan#ler
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Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
,art 2( Are services even slightl4 interesting=
?
A#am Smith;s vie3 < parasites on the rest o& the econom4
?
Colin Clar5;s vie3 < economic resi#ual (but gro3ing rapi#l4!
?
"ramatic gro3th o& service sector < the intangible econom4
?
?mergence o& Service Science #iscipline
0
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
200 4ear vie3( Services #ominate
.ation / ##
0abor
/
/
$
/
"
21 yr /
delta "
China 210 +0 1+ B+ 1/1
6n#ia 100 60 10 2B 2.
2.". 3.4 ! 25 56 21
6n#onesia B/ 4+ 16 B/ B+
%ra7il !.6 2! 23 1! 26
-ussia 2.1 12 2! 81 !4
9apan 2.3 1 21 56 36
Nigeria 22 00 10 20 B0
9angla# 22 6B 11 26 B0
$ermany 1.3 ! !! 83 33
Top Ten Nations by Labor Force Size
(about 50% of world labor in just 10 nations)
A = Agriculture, G = Goods, S = Services
50% (S) ser!ices" JBBK (S! services
#00$
#00$
%nited States
T&e lar'est labor force (i'ration
in &u(an &istory is underway"
dri!en by urbanization"
'lobal co((unications"
low cost labor" business 'rowt&
and tec&nolo'y inno!ation)
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Services:
Value from enhancing the
capabilities of things (customizing,
distributing, etc) and interactions bet!een things
.
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Services in an econom4 #rive up human capabilit4 gro3th
*usiness
Ser!ices
+ublic
,d(inistration
-.tracti!e
Sector
/anufacturin'
Sector
0nfrastructure
Ser!ices
Trade
Ser!ices
Social1personal
Ser!ices
2onsu(er
"eveloping nations that invest in government services, health and education
services, financial and business services, transportation services, utilit# services,
communication services, and !holesale and retail services (gro!th of their service
econom#) create large populations of service labor $ removing %un&freedoms,' doing
valuable !ork for others (see Amart#a Sen, "evelopment as (reedom)
(inancial ) information
*rofessional ) business
Government
+ducation ) healthcare
,eisure ) hospitalit#
-holesale ) retail .ransportation ) !arehousing
/tilities ) communication
+0ample: medical, legal,
and 1. !ork in 1ndia
Development as Freedom
by Amartya Sen
1//. Nobel ,riIe
)inner ?conomics
Source: "oroth# 1 2iddle (3456) Service&,ed Gro!th *raeger, 78
/
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
9usiness o& pro#uction (Solo3;s mo#el!
?
Production is measure o( results or :goals achieved;
,ro#uction per capita (E! as a &unction o& output per 3or5er (F! an# capital assets per 3or5er
(L! an# investment per 3or5er (6!
6nvestment #rives technolog4 progress an# improves the e&&icienc4 o& laborM accumulates
over time as capital assets
-o#a4( Si> billion people (F! 3ith the capital assets create# b4 one hun#re# billion people
throughout histor4 (L! an# innovation investments (6! to increase e&&icienc4 o& F, L, an# 6
?
position
b4 $obert : Solo3
10
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
6- investment #rives up service sector pro#uctivit4 gro3th
?
#orldwide cee#s suppl4
2 *reate demand/value innovation: 6nvent ne3 high pro#uctivit4 in#ustries2o&&erings2Sobs
B -epair supply: 6nvest to trans&orm lo3 pro#uctivit4 in#ustries2o&&erings2Sobs(s5ills!M inclu#ing leap*&rog pro#uctivit4 strateg4
4 Protect supply: 6nvest to protect lo3 pro#uctivit4 in#ustries2o&&erings2Sobs(s5ills! in an e&&ort to bu4 time, an# i& luc54 catch ne>t 3ave
?
&he study o( value innovation L labor productivity are important to service science
'istoricall4, 3hat has #etermine# the rise in #eman# &or particular t4pes o& services= )hat t4pes o& innovation have le# to a rise in the #eman# &or
particular t4pes o& services= )hat t4pes o& innovation have le# to a rise in labor pro#uctivit4 in particular in#ustries=
Alrea#4 empirical evi#ence in#icates that e&&ective 6-*enable# pro#uctivit4 gains reUuires aligning technolog4, business2value, an# organiIational
culture innovations ,eople can resist change or help accelerate change #epen#ing on the alignment o& all three &actors
As economic goals are achieve#, 3ealth increases, an# increasingl4 other goals ta5e priorit4, hence the value o& economic transactions 3ill not
simpl4 be measure# in &inancial terms, si#e*e&&ects matter ?conomic transactions 3ill nee# to ma>imiIe value a## be4on# &inancial metrics
2+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
A ,reliminar4 "e&inition o& Service Science
? "ervice "cience is the study o( business methods to create
and capture valueJ technology tools to reHengineer processesJ
and organi7ational culture practices to incent and align
peopleJ and their collective impact on e((ectiveness and
e((iciency in the per(ormance o( services worD.
$ecent stu#ies o& 6- ,ro#uctivit4 ,ara#o> in#icate that
technolog4 tools, business metho#s, an# organiIational
culture must align to achieve return on investment &or 6-
-he services in#ustr4 must be vie3e# as a collection o&
interacting s4stems, 3here the histor4 o& the s4stems
(legac4! matters as much as ne3 events in un#erstan#ing
3hat shoul#, can, ma4, an# 3ill happen ne>t
?&&ectiveness means 3or5ing on the right things that matter to
the business an# e&&icienc4 means #oing the 3or5 accor#ing
to best practices ,ro#uctivit4 #epen#s on both e&&ective an#
e&&icient per&ormance
Services are t4picall4 simultaneousl4 pro#uce# (b4 the provi#er!
an# consume# (b4 the client! -he provi#er an# the client
can each be in#ivi#uals, organiIations, or automate#
s4stems
+eople
Duman ) tiles < stain resistant
?
Computing technologies < roll*to*roll manu&acturing
?
Cars an# Hehicles
?
$oa#s
?
'ouses an# 9uil#ings
?
@urniture an# Appliances
?
@oo#s
)ealth4
B+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Access to in&ormation D better investment #ecisions
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)ise
Semantic )eb an# Natural Fanguage Capabilities
-rillions o& Calculations per Secon#
100,000
10,000
1,000
100
10
1
1//0 2000 200+ 2010 201+
A,,F6CA-6%NS
**********************
'uman Fi5e 9ehavior
O'AFP
,re#ictive
#eling
,rotein @ol#ing
Nuclear Simulation
Chess ,la4ing
,eter 9ernstein;s against the go#sA
B6
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
+0 Eears( 6n&ormation technolog4 connecting islan#s o&
in&ormation (create# b4 people! into larger net3or5s
*onverging &echnologies (or e#
:e#iators * -ools
?>ternal (outsi#e the bo#4M personal! :e#iators < )earables,bile -ools
6nternal (insi#e the bo#4M temporar4! 6ngestibles < :e#icines, @oo#s
6nternal (insi#e the bo#4M permanent! %rgans < 6mplants, Sensor D ?&&ectors
S5ills < Fearning, Ne3 Gses o& %l#
7enes < Ne3 Species, "evel ,rocess
%utsi#e*6nsi#e @rame3or5 can be use# to anal4Ie the past, an# speculate about &utures
B.
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
%utsi#e*6nsi#e @rame3or5 Applie#( ,ast D @uture
'o3 much have cognitive capabilities been increasing=
? H 166J666 $enerations: "peech
Ne3 Species (Lin# o& Agent!
Ne3 Gse o& %l# Sense (soun#s *J s4mbols( language!
? H 166 : #riting
Ne3 :e#iator( Store s4mbols &or later use (an# Ne3 S5ills X Scribes!
? H 366 : 0ibrariesJ 36 2niversitiesJ 23 Printing
Ne3 :e#iator, ,laces( Communicate2"istribute (an# Agents X %rganiIations!
? H 18 : ccurate *locDs (or .avigation L )ore
Ne3 :e#iator( :easure (an# Agents X %rganiIation!
? H 1 : &elephoneJ 3 H -adioJ ! H &+J 2 H *omputersJ 1 H plorationM services a#apt goo#s to #eman#
40
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
-he evolution o& business to3ar#s O%n "eman# e*9usinessP
-echnolog4 an# business innovations are coevolving
$api# business pro#uctivit4 improvements are #riven b4 technolog4 innovations
$api# technolog4 improvements are #riven b4 business investments
ore;s Ola3P is as much a la3 o& business investment as o& technological possibilities
(see http(22alma#enibmcom2coevolution! < t3o s4stems ratchet each other up
Characteristics o& an on*#eman# e*business
daptive 'nterprise: *reating and 0eading "enseHndH-espond Crgani7ations
b4 Stephan ' 'aec5el, A#rian J Sl43otI54
41
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
%n #eman# e*business is enable# b4 an on #eman# operating environment
-he on #eman# operating environment mirrors changing 3or5 practices
6ntegration
HirtualiIe#
%pen Stan#ar#s
Autonomic
42
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
"ocial
&echnology
$overnment
Gse&ul in&o
-ime
:a>
?nerg4
-ime
Y Z Y Z
Source( ,irolli (2002!
'umans as 6n&ormavoreiller, 1/.B!
44
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Cognitive -echnologies( )here is the 5no3le#ge=
?
FocaliIe# in a brain ** 4ours[
$emin#( Capture histor4 an# augment memor4
$eme#iate( ,ractice 3ith simulation games
?
FocaliIe# in a brain ** but someone else;s brain, soon to be 4ours too[
$eceive( -raining, &or use in 5no3n conte>t (e>ploitation!
$econstruct( ?#ucation, &or use in un5no3n conte>t (e>ploration!
?
6n no one;s brain (4et! ** but some#a4 localiIe# in 4our brain an#2or others
$esearch( Ans3er Uuestion the &irst time
$e&lect( As5 Uuestion the &irst time
?
"istribute# in the collective closure o& brains, bo#ies, an# technologies, Ono
one;s brainP
4+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Cognitive capabilities( 6n pursuit o& a metric
?
Lno3le#ge in our min#s is so&t capabilit4
?
Lno3le#ge in our genes, bo#4, brains is har# capabilit4
?
Lno3le#ge in our organiIations is relationship capabilit4
?
'o3ever, in human an# social s4stems attitu#es, incentives, an#
games are an element o& the cognitive capabilities o& the s4stem
?
7iven a goal( lan# an# sa&el4 return humans on :ars, one can
estimate ho3 man4 resources 3oul# be reUuire# to achieve this goal
given the cognitive capabilities o& the s4stem
?
'o3 #oes one compare the comple>it4 o& achieving #i&&erent goals=
?
'o3 #oes one compare sensing, communications, #ecision ma5ing,
an# e>ecution per&ormance=
.aturalH%orn *yborgs: )indsJ &echnologiesJ and the ?uture o( ,uman
ploit various species o& cognitive technolog4P (pg 0.!
46
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Meta Trends: Exponential Growth
?
)oorePs 0aw H )iniaturi7ation H *ontinues
?
ProcessingJ "torageJ ...
?
Price/Per(ormance 2K over 12H14 months
?
)etcal(Ps 0aw H amples( @%Q,2, Comple> A#aptive S4stems (CAS! < Hariabilit4, 6nteraction, Selection
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$api#l4 increasing rates o& a#vancement in each s4stem area is creating cross pollination
4/
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
9iocomple>it4( :uch prettier picture than m4 table[
$ita Col3ell,
@ormer "irector National Science @oun#ation (NS@!
+0
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
69:;s business is helping customers trans&orm their
businesses Services is no3 +0K o& 69:, 3ith rapi# gro3th
&rom strategic outsourcing, help #es5, business consulting
69: 101 < -he Ne3 (,ost 1//+! 69: ?cos4stem
$evenue( \.0] 9illion2Eear
?mplo4ees( B20,000], about +0K insi#e*GS, +0K outsi#e*GS
69: 7lobal Services, appro> 100,000 people in 120 countries
^Services
(67S!
^:i##le3are2So&t3are
(S)7!
^Sales
(SD"!
^@inance (67@!
^9o>es2'ar#3are
(Servers, Storage, ,ersonal!
^Chips2-echnolog4
(6:", -7!
^,artner)orl#
("eveloper $elations!
^69: $esearch
^69:;s Customers
^69:;s ,artners
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Accelerating Change 2004
November 6, 2004 | Contact Jim Spohrer (spohrer@usibmcom!
"irector, Alma#en Services $esearch
%pen %&&ice 'our( )e# 4*+pm ,S-, 40.*/20*1/2.
http(22alma#enibmcom2coevolution
http(22333alma#enibmcom2asr
,'0P )' GC
Service Science, an emerging multidiscipline to accelerate the coevolution of business-technology-work innovations
Accelerating Change 2004
November 6, 2004 | Contact Jim Spohrer (spohrer@usibmcom!
"irector, Alma#en Services $esearch
%pen %&&ice 'our( )e# 4*+pm ,S-, 40.*/20*1/2.
http(22alma#enibmcom2coevolution
http(22333alma#enibmcom2asr
Service Science, an emerging multi#iscipline to
accelerate the coevolution o& business*technolog4*3or5
innovations
6n#ustr4*Aca#emic*
7overnment
Collaboration Nee#e#
2
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
-o#a4;s -al5
?
Part 1: Zooming in on accelerating change – what’s really changing?
12,000,000,000 4ear vie3 < emergence o& li&e an# human culture
12,000 4ear vie3 < rise in human population
200 4ear vie3 < rise o& the large managerial &irm, an# this thing calle# services <
3hat;s that all about=
?
Part 2: re services even the slightest bit interesting?
A#am Smith;s vie3 < services are parasites on the rest o& the econom4
Colin Clar5;s vie3 < Smith, :ar>, Stalin ma#e the error o& neglecting services
"ramatic gro3th o& service sector < the intangible econom4
?mergence o& Service Science #iscipline
?
Part !: "o what? #hat’s the big deal?
@rom loosel4 gui#e# to #esigne# evolution o& capabilitiesA (ma4be!
)or5*capabilit4 evolution (collaboration, augmentation, #elegation, automation!
B
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
,art 1( Cooming in on accelerating change
?
)hat;s reall4 changing=
?
12,000,000,000 4ear vie3 < emergence o& li&e an# human culture
?
12,000 4ear vie3 < rise in human population
?
200 4ear vie3 < rise o& the large managerial &irm, an# this thing
calle# services
< 3hat;s that all about=
4
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
129 4ears o& capabilit4 evolution D accelerating change
9illion Eears Ago Natural Capabilities
12 9ig 9ang (?:S-!
11+ :il54 )a4 (Atoms!
. Sun (?nerg4!
4+ ?arth
olecules!B+ 9acteria (Cell!
2+ Sponge (9o#4!
00 Clams (Nerves!
0+ -rilobites (9rains!
02 9ees (S3arms!
006+ :ass ?>tinctions
0002 'umans
-ools D Clans
Co*evolution
7enerations Ago 'uman Capabilities
100,000 Speech
0+0 Agriculture
+00 )riting
400 Fibraries
40 Gniversities
24 ,rinting
16 Accurate Cloc5s
+ -elephone
4 $a#io
B -elevision
2 Computer
1 6nternet2e*:ail
0 7,S, "H", )":
$lobal %rain: &he 'volution o( )ass )ind (rom the %ig %ang to the 21st *entury
b4 'o3ar# 9loom
+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
12,000 4ears( 'uman population gro3th &rom +: to 69 people
200 4ears( $ise o& the mo#ern managerial &irm
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b4 Al&re# "upont Chan#ler
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Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
,art 2( Are services even slightl4 interesting=
?
A#am Smith;s vie3 < parasites on the rest o& the econom4
?
Colin Clar5;s vie3 < economic resi#ual (but gro3ing rapi#l4!
?
"ramatic gro3th o& service sector < the intangible econom4
?
?mergence o& Service Science #iscipline
0
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
200 4ear vie3( Services #ominate
.ation / ##
0abor
/
/
$
/
"
21 yr /
delta "
China 210 +0 1+ B+ 1/1
6n#ia 100 60 10 2B 2.
2.". 3.4 ! 25 56 21
6n#onesia B/ 4+ 16 B/ B+
%ra7il !.6 2! 23 1! 26
-ussia 2.1 12 2! 81 !4
9apan 2.3 1 21 56 36
Nigeria 22 00 10 20 B0
9angla# 22 6B 11 26 B0
$ermany 1.3 ! !! 83 33
Top Ten Nations by Labor Force Size
(about 50% of world labor in just 10 nations)
A = Agriculture, G = Goods, S = Services
50% (S) ser!ices" JBBK (S! services
#00$
#00$
%nited States
T&e lar'est labor force (i'ration
in &u(an &istory is underway"
dri!en by urbanization"
'lobal co((unications"
low cost labor" business 'rowt&
and tec&nolo'y inno!ation)
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Services:
Value from enhancing the
capabilities of things (customizing,
distributing, etc) and interactions bet!een things
.
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Services in an econom4 #rive up human capabilit4 gro3th
*usiness
Ser!ices
+ublic
,d(inistration
-.tracti!e
Sector
/anufacturin'
Sector
0nfrastructure
Ser!ices
Trade
Ser!ices
Social1personal
Ser!ices
2onsu(er
"eveloping nations that invest in government services, health and education
services, financial and business services, transportation services, utilit# services,
communication services, and !holesale and retail services (gro!th of their service
econom#) create large populations of service labor $ removing %un&freedoms,' doing
valuable !ork for others (see Amart#a Sen, "evelopment as (reedom)
(inancial ) information
*rofessional ) business
Government
+ducation ) healthcare
,eisure ) hospitalit#
-holesale ) retail .ransportation ) !arehousing
/tilities ) communication
+0ample: medical, legal,
and 1. !ork in 1ndia
Development as Freedom
by Amartya Sen
1//. Nobel ,riIe
)inner ?conomics
Source: "oroth# 1 2iddle (3456) Service&,ed Gro!th *raeger, 78
/
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
9usiness o& pro#uction (Solo3;s mo#el!
?
Production is measure o( results or :goals achieved;
,ro#uction per capita (E! as a &unction o& output per 3or5er (F! an# capital assets per 3or5er
(L! an# investment per 3or5er (6!
6nvestment #rives technolog4 progress an# improves the e&&icienc4 o& laborM accumulates
over time as capital assets
-o#a4( Si> billion people (F! 3ith the capital assets create# b4 one hun#re# billion people
throughout histor4 (L! an# innovation investments (6! to increase e&&icienc4 o& F, L, an# 6
?
position
b4 $obert : Solo3
10
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
6- investment #rives up service sector pro#uctivit4 gro3th
?
#orldwide cee#s suppl4
2 *reate demand/value innovation: 6nvent ne3 high pro#uctivit4 in#ustries2o&&erings2Sobs
B -epair supply: 6nvest to trans&orm lo3 pro#uctivit4 in#ustries2o&&erings2Sobs(s5ills!M inclu#ing leap*&rog pro#uctivit4 strateg4
4 Protect supply: 6nvest to protect lo3 pro#uctivit4 in#ustries2o&&erings2Sobs(s5ills! in an e&&ort to bu4 time, an# i& luc54 catch ne>t 3ave
?
&he study o( value innovation L labor productivity are important to service science
'istoricall4, 3hat has #etermine# the rise in #eman# &or particular t4pes o& services= )hat t4pes o& innovation have le# to a rise in the #eman# &or
particular t4pes o& services= )hat t4pes o& innovation have le# to a rise in labor pro#uctivit4 in particular in#ustries=
Alrea#4 empirical evi#ence in#icates that e&&ective 6-*enable# pro#uctivit4 gains reUuires aligning technolog4, business2value, an# organiIational
culture innovations ,eople can resist change or help accelerate change #epen#ing on the alignment o& all three &actors
As economic goals are achieve#, 3ealth increases, an# increasingl4 other goals ta5e priorit4, hence the value o& economic transactions 3ill not
simpl4 be measure# in &inancial terms, si#e*e&&ects matter ?conomic transactions 3ill nee# to ma>imiIe value a## be4on# &inancial metrics
2+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
A ,reliminar4 "e&inition o& Service Science
? "ervice "cience is the study o( business methods to create
and capture valueJ technology tools to reHengineer processesJ
and organi7ational culture practices to incent and align
peopleJ and their collective impact on e((ectiveness and
e((iciency in the per(ormance o( services worD.
$ecent stu#ies o& 6- ,ro#uctivit4 ,ara#o> in#icate that
technolog4 tools, business metho#s, an# organiIational
culture must align to achieve return on investment &or 6-
-he services in#ustr4 must be vie3e# as a collection o&
interacting s4stems, 3here the histor4 o& the s4stems
(legac4! matters as much as ne3 events in un#erstan#ing
3hat shoul#, can, ma4, an# 3ill happen ne>t
?&&ectiveness means 3or5ing on the right things that matter to
the business an# e&&icienc4 means #oing the 3or5 accor#ing
to best practices ,ro#uctivit4 #epen#s on both e&&ective an#
e&&icient per&ormance
Services are t4picall4 simultaneousl4 pro#uce# (b4 the provi#er!
an# consume# (b4 the client! -he provi#er an# the client
can each be in#ivi#uals, organiIations, or automate#
s4stems
+eople
Duman ) tiles < stain resistant
?
Computing technologies < roll*to*roll manu&acturing
?
Cars an# Hehicles
?
$oa#s
?
'ouses an# 9uil#ings
?
@urniture an# Appliances
?
@oo#s
)ealth4
B+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Access to in&ormation D better investment #ecisions
0
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Semantic )eb an# Natural Fanguage Capabilities
-rillions o& Calculations per Secon#
100,000
10,000
1,000
100
10
1
1//0 2000 200+ 2010 201+
A,,F6CA-6%NS
**********************
'uman Fi5e 9ehavior
O'AFP
,re#ictive
#eling,rotein @ol#ing
Nuclear Simulation
Chess ,la4ing
,eter 9ernstein;s against the go#sA
B6
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
+0 Eears( 6n&ormation technolog4 connecting islan#s o&
in&ormation (create# b4 people! into larger net3or5s
*onverging &echnologies (or e#
:e#iators * -ools
?>ternal (outsi#e the bo#4M personal! :e#iators < )earables,
bile -ools6nternal (insi#e the bo#4M temporar4! 6ngestibles < :e#icines, @oo#s
6nternal (insi#e the bo#4M permanent! %rgans < 6mplants, Sensor D ?&&ectors
S5ills < Fearning, Ne3 Gses o& %l#
7enes < Ne3 Species, "evel ,rocess
%utsi#e*6nsi#e @rame3or5 can be use# to anal4Ie the past, an# speculate about &utures
B.
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
%utsi#e*6nsi#e @rame3or5 Applie#( ,ast D @uture
'o3 much have cognitive capabilities been increasing=
? H 166J666 $enerations: "peech
Ne3 Species (Lin# o& Agent!
Ne3 Gse o& %l# Sense (soun#s *J s4mbols( language!
? H 166 : #riting
Ne3 :e#iator( Store s4mbols &or later use (an# Ne3 S5ills X Scribes!
? H 366 : 0ibrariesJ 36 2niversitiesJ 23 Printing
Ne3 :e#iator, ,laces( Communicate2"istribute (an# Agents X %rganiIations!
? H 18 : ccurate *locDs (or .avigation L )ore
Ne3 :e#iator( :easure (an# Agents X %rganiIation!
? H 1 : &elephoneJ 3 H -adioJ ! H &+J 2 H *omputersJ 1 H plorationM services a#apt goo#s to #eman#
40
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
-he evolution o& business to3ar#s O%n "eman# e*9usinessP
-echnolog4 an# business innovations are coevolving
$api# business pro#uctivit4 improvements are #riven b4 technolog4 innovations
$api# technolog4 improvements are #riven b4 business investments
ore;s Ola3P is as much a la3 o& business investment as o& technological possibilities(see http(22alma#enibmcom2coevolution! < t3o s4stems ratchet each other up
Characteristics o& an on*#eman# e*business
daptive 'nterprise: *reating and 0eading "enseHndH-espond Crgani7ations
b4 Stephan ' 'aec5el, A#rian J Sl43otI54
41
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
%n #eman# e*business is enable# b4 an on #eman# operating environment
-he on #eman# operating environment mirrors changing 3or5 practices
6ntegration
HirtualiIe#
%pen Stan#ar#s
Autonomic
42
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
"ocial
&echnology
$overnment
Gse&ul in&o
-ime
:a>
?nerg4
-ime
Y Z Y Z
Source( ,irolli (2002!
'umans as 6n&ormavore
iller, 1/.B!44
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Cognitive -echnologies( )here is the 5no3le#ge=
?
FocaliIe# in a brain ** 4ours[
$emin#( Capture histor4 an# augment memor4
$eme#iate( ,ractice 3ith simulation games
?
FocaliIe# in a brain ** but someone else;s brain, soon to be 4ours too[
$eceive( -raining, &or use in 5no3n conte>t (e>ploitation!
$econstruct( ?#ucation, &or use in un5no3n conte>t (e>ploration!
?
6n no one;s brain (4et! ** but some#a4 localiIe# in 4our brain an#2or others
$esearch( Ans3er Uuestion the &irst time
$e&lect( As5 Uuestion the &irst time
?
"istribute# in the collective closure o& brains, bo#ies, an# technologies, Ono
one;s brainP
4+
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Cognitive capabilities( 6n pursuit o& a metric
?
Lno3le#ge in our min#s is so&t capabilit4
?
Lno3le#ge in our genes, bo#4, brains is har# capabilit4
?
Lno3le#ge in our organiIations is relationship capabilit4
?
'o3ever, in human an# social s4stems attitu#es, incentives, an#
games are an element o& the cognitive capabilities o& the s4stem
?
7iven a goal( lan# an# sa&el4 return humans on :ars, one can
estimate ho3 man4 resources 3oul# be reUuire# to achieve this goal
given the cognitive capabilities o& the s4stem
?
'o3 #oes one compare the comple>it4 o& achieving #i&&erent goals=
?
'o3 #oes one compare sensing, communications, #ecision ma5ing,
an# e>ecution per&ormance=
.aturalH%orn *yborgs: )indsJ &echnologiesJ and the ?uture o( ,uman
ploit various species o& cognitive technolog4P (pg 0.!
46
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
Meta Trends: Exponential Growth
?
)oorePs 0aw H )iniaturi7ation H *ontinues
?
ProcessingJ "torageJ ...
?
Price/Per(ormance 2K over 12H14 months
?
)etcal(Ps 0aw H amples( @%Q,2, Comple> A#aptive S4stems (CAS! < Hariabilit4, 6nteraction, Selection
C
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v
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i
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$api#l4 increasing rates o& a#vancement in each s4stem area is creating cross pollination
4/
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
9iocomple>it4( :uch prettier picture than m4 table[
$ita Col3ell,
@ormer "irector National Science @oun#ation (NS@!
+0
Accelerating Change 2004http://www.almaden.ibm.com/coevolution 8 2004 69: Corporation
69:;s business is helping customers trans&orm their
businesses Services is no3 +0K o& 69:, 3ith rapi# gro3th
&rom strategic outsourcing, help #es5, business consulting
69: 101 < -he Ne3 (,ost 1//+! 69: ?cos4stem
$evenue( \.0] 9illion2Eear
?mplo4ees( B20,000], about +0K insi#e*GS, +0K outsi#e*GS
69: 7lobal Services, appro> 100,000 people in 120 countries
^Services
(67S!
^:i##le3are2So&t3are
(S)7!
^Sales
(SD"!
^@inance (67@!
^9o>es2'ar#3are
(Servers, Storage, ,ersonal!
^Chips2-echnolog4
(6:", -7!
^,artner)orl#
("eveloper $elations!
^69: $esearch
^69:;s Customers
^69:;s ,artners
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Accelerating Change 2004
November 6, 2004 | Contact Jim Spohrer (spohrer@usibmcom!
"irector, Alma#en Services $esearch
%pen %&&ice 'our( )e# 4*+pm ,S-, 40.*/20*1/2.
http(22alma#enibmcom2coevolution
http(22333alma#enibmcom2asr
,'0P )' GC