Service Science, Management, Engineering

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Service Science, Management, Engineering (SSME) -
- Overview
LING Zong, Ph. D. IBM Software Group San Jose,
California, U.S.A.
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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

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Motivations

• Why study Services?
• Why is IT Service important?
• What is IBM doing?

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Percentage employment in service jobs
US employment as of total

• Services vs Manufacturing

2010
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The Rise of the Service Economy
Japan
United States
Germany
China
Russia
India
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Key Trends

• All national economies are shifting to services
• Major industrialized nations are gt70 services,
  developing nations are close behind
• Globalization and off-shoring are changing the
  services market
• Service innovation recognized as key for the
  economic growth and competitiveness
• Governments and industry are increasing
  investments in services research
• New education and research programs are emerging
  to address the needs of services business

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The Big Trend The future is service
Physical mostly interact with things
Social mostly interact with others
Service2 growth as IT-enabled division of labor
Service1 growth as intangible outputs
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Top 10 Trends for SaaS and Cloud Services in 2010

1. SaaS will continue to grow in acceptance and
   prevalence in the marketplace but the term
   itself will fade in favor of Cloud (insert your
   term).
2. Real business value in SaaS will continue to
   improve, be better understood and measured more
   explicitly.
3. Service ecosystems will rise.
4. New services will focus less on doing it all
   from day one and more on their roadmap
5. Integration requirements will drive standards for
   service-based communication and interaction.
6. End-user clients and platforms will continue to
   evolve and increase in their importance and
   differentiation.
7. Customer collaboration will become a more
   integrated and critical part of product
   management and business operations.
8. Agile will continue to grow in acceptance and
   will become the dominant approach for both
   development and business operations in the
   cloud.
9. There will be a growing awareness of the
   requirements and responsibilities implied by
   mature services.
10. SaaS vendors will stop trying to sell split
    versions.

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Why study Services?

• Service-based economies
• Service as a business imperative in manufacturing
  and IT
• Deregulated industries and professional service
  needs
• Services marketing/management is different
• Service equals profits follow the money
• Its where the jobs are!!!

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Motivations

• Why study Services?
• Why is IT Service important?
• What is IBM doing?

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IT field Software Industry

• Engineering

Services

• Innovation
• Technology
• Product

• Market
• Customer
• Support

Separation
Integration
Virtualization
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Key challenges facing software engineering

• Software engineering in the 21st century faces
  three key challenges
• Legacy systems
• Old, valuable systems must be maintained and
  updated
• Heterogeneity
• Systems are distributed and include a mix of
  hardware and software
• Delivery
• There is increasing pressure for faster delivery
  of software

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Software myths

• Management myths
• Standards and procedures for building software
• Add more programmers if behind the schedule
• Customer myths
• A general description of objectives enough to
  start coding
• Requirements may change as the software is
  flexible
• Practitioner myths
• Task accomplished when the program works
• Quality assessment when the program is running

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Computer Science vs Software Engineering
Computer Science
Software Engineering
is concerned with
Computer science theories are currently
insufficient to act as a complete underpinning
for software engineering, BUT it is a foundation
for practical aspects of software engineering
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Evolution of marketing thought
Market With (Collaborate with Customers and
Partners to Create and Sustain Value)
Market To (Management of Customers and Markets)
To Market (Matter on Motion)
2010
1950-2010
Through 1950

• Marketing in the goods economy financial
  optimization and the 4Ps -Product, Price,
  Placement, Promotion
• Marketing in the services economy communication
  across organizational boundaries
• From manufacturing (make and sell) to marketing
  (resource utilization for service provision)

Source Stephen L. Vargo From Goods to
Service(s), Presentation at UC Berkeley, Jan 30,
2007
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Paths to Increase Profits
Traditional path employee-centered
Service path customer-centered
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Evolution of Systems
Industry Eco-SystemsGlobal Digital
Economy Marketplace Solutions
People, Processes, Information
End-to-End Enterprise
IT Infrastructure, Applications, Data, . . .
Data Center, Business Unit, Department, . . .
System Complex
Computer
Storage, Printers, Network, . . .
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Evolution of Visions
Market Facing Systems
People and Services
Knowledge Economy
Back Office Systems
Machines and Products
Industrial Economy
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Innovation of Services Science
Evolution of Food Chain
Services
Carnivores
Business Value/Profit Chain
Natural Food Chain Pyramid
Herbivores
Engineering
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Why is IT SERVICE important?

• The world is becoming networked, dependent on
  information and information technology -- IT
• Science will provide tools and methods to study
  services and develop solutions to problems that
  span multiple disciplines
• Less Programming, More Managing Computer jobs
  are changing in nature

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• Motivations

• Why study Services?
• Why is IT Service important?
• What is IBM doing?

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About History

• 1940s (70 years ago!)
• IBM's first research lab was at Columbia
  University and Columbia's first Computer Science
  course was co-taught by an IBMer.
• Then, Computer Science appeared
• 2004 gt Now!
• IBM hosted a worldwide conference on SSME
  education for the 21st century
• Yes, Service Science emerged

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IBM Revenue Breakdown since 1982
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Services in IBM Business Operations Percent of
IBMs Total Revenue in 2009

• Two professional services segments
• Global Technology Services, primarily reflects IT
  Infrastructure Services
• Global Business Services, primarily reflects
  professional services delivering solutions which
  leverage industry and business-process expertise.

Source 2009 IBM Annual Report
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IBM Mission
We strive to lead in the invention, development
and manufacture of the industrys most advanced
information technologies.
Engineering
We translate these advanced technologies into
value for our customers through our professional
solutions, services and consulting businesses
worldwide.
Services
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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

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What is a service?

• Per Wikipedia (2006)
• 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.

Service ? ???? ? ??
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Definition of Services

• Loosely coupled software components that interact
  with one another dynamically via standard
  Internet technologies (Gartner).
• Services are self-contained, reusable software
  modules that are independent of applications and
  the computing platforms on which they run.
  Services have with well-defined interfaces and
  allow a 11 mapping between business tasks and
  the exact IT components needed to execute the
  task. (IBM)

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Key points of Services

• Two sides provider and consumer
• Interaction
• May happened in real-time or off-line
• At least one provider and one consumer
• Provider provides a valuable service

Service Provider
Customer
Service Experience
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Provider-Client Relationship in a Service
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What are some everyday services?

• Transportation
• Trains, planes, delivery
• Hospitality
• Hotels, restaurants
• Infrastructure
• Communications, electricity, water
• Government
• Police, fire, mail

• Financial
• Banking, investments
• Entertainment
• Television, movies, concerts
• Professional Services
• Doctors, lawyers, skilled craftspeople, project
  management
• Educational Services
• Colleges, kindergartens

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Everyday IT Service Lifecycle Example
Incident ? Resolution
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Goods versus Services

• Goods-centered logic
• Exchange of goods
• Customer receives goods marketers appeal to them
• Value determined by producer
• Wealth is created by owning, controlling, and
  producing goods

• Service-centered logic
• Exchange of knowledge and skills (Intangibility)
• Customer is co-producer of service
  (Inseparability)
• Value determined in use by customer
  (Perishability)
• Wealth is obtained through application and
  exchange of specialized knowledge and skills
  (Heterogeneity)

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Distinguishing services from goods

• Intangibility
• Services are ideas and concepts that are part of
  a process
• The client typically relies on the service
  providers reputation and the trust they have
  with them to help predict quality-of-service and
  make service choices
• Regulations and governance are means to assuring
  some acceptable level of quality-of-service

• Inseparability
• Services are created and consumed at the same
  time
• Services cannot be inventoried
• Demand fluctuations cannot be solved by inventory
  processes
• Quality control cannot be achieved before
  consumption

• Heterogeneity
• From the clients perspective, there is typically
  a wide variation in service offerings
• Personalization of services increases their
  heterogeneous nature
• Perceived quality-of-service varies from one
  client to the next

• Perishability
• Any service capacity that goes unused is perished
• Services cannot be stored so that when not used
  to maximum capacity the service provider is
  losing opportunities
• Service capability estimation and planning are
  key aspects for service management

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Information as a good

• Information about goods becomes a good.
• e.g. bar codes, RFID tags, etc.
• As information about location and movement of
  goods is increasingly available, the boundary
  between physical and virtual worlds blurs
• Inventory and information are equivalent.
• New services from aggregation of information
  about business transactions.

• When digitized, information is
• Easily stored and processed databank, data
  warehouse, data mining
• Easily customized, enriched, accumulated,
  transformed - even across great distances
• Easily distributed - infinitely scalable

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Growing information content of services

• Web-based platforms and reusable software
  components transform services as well as goods
  eBay, Google
• Information systems allow separation of
  production and consumption of services global
  supply chain management, remote medical screening

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Service process matrix

• Degree of labor intensity
• the ratio of labor cost to capital cost
• Degree of interaction and customization
• ability of the client to affect specialization

(Adapted from Lovelock (1983) and Fitzsimmons
Fitzsimmons (2003))
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Toward Services Science

• 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.
• And growth requires innovation that combines
  people, technology, value, clients

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Can there really be a science of services?

• Wherever there are phenomena, there can be a
  science to describe and explain those phenomena.
  Thus, the simplest (and correct) answer to What
  is botany? is, Botany is the study of plants.
  And zoology is the study of animals, astronomy
  the study of stars, and so on. Phenomena breed
  sciences.
• - Newell, A., Perlis, A. Simon, H. A. (1967).
  Computer Science, Science, 157, 1373-1374.

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Computer Science vs. Service Science

• Only natural phenomena breed sciences
• The term computer is not well defined
• Computer Science is the study of algorithms, not
  computers
• Computers are instruments, not phenomena
• Computer Science is a branch of another science
• Computers belong to engineering, not science
• Newell, Perlis, Simon (1967)

• Only natural phenomena breed sciences
• The term service is not well defined
• Service Science is the study of work, not
  services
• Services are performances, not phenomena
• Service Science is a branch of another science
• Services belong to engineering (or management),
  not science
• With apologies to Newell, Perlis, Simon (1967)

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Service Science
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From Computer Science to Service Science
Computer Science Physicists
Computer Science Electrical Engineers
Computer Science Mathematicians
Computer Science Philosophers (Boolean Logic)
Need to hire Computer Scientists
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Services Ecosystem
Service Consumers
Service Industries (Vertical Services)
Software as Services
Auto-motive
Chemicals
Banking
Telecom

Common Business Services (CRM, SCM, ERP, HCM)
CommonBusiness Services
Common Services (Horizontal Services)
CommonIT Services
IT Services (monitoring, remote control, Web
hosting)
In-House Services
Outsourced Services
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Emergence of Services Computing Technology

• Create, operate, manage and optimize the
  processes in a well-defined architecture for
  higher flexibility facing future business
  dynamics
• Improve the internal and external integration of
  industry-specific applications by adding new
  values and innovative functions
• IT infrastructure paradigm is shifting to
  service-oriented architecture
• The business models are also evolving to be
  component-based to achieve agile and on-demand
  business

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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

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Services Management
Service management encompasses the management
processes, tactics and best practices needed to
deliver business services.
Internal Project management External
Customer management
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Service Operations
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How is value created in a service system?
(Collier and Evans, 2005, p. 45)
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Service-Profit Triangle
Product and process formulation
Company
Revenue growth and profitability
Internal services and management
Technology
Customer
Employees
External service value
Productivity
Loyalty
Case study IBM PC services
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Service-Profit Chain
Internal
External
Service concept
Operating Strategy and Service Delivery System
Service Support Mechanism
Employee Retention
Revenue Growth
Internal Service Quality
Employee Satisfaction
External Service Value
Customer Satisfaction
Customer Loyalty
Employee Productivity
Profitability

• Lifetime value
• Retention
• Repeat Business
• Referrals

• Quality productivity improvements yield higher
  service quality and lower cost

• Customer orientation/quality emphasis
• Allow decision-making latitude
• Information and communication
• Provide support systems
• Foster teamwork
• Workplace design
• Job design
• Employee selection and development
• Employee rewards and recognition
• Tools for serving customers

• Attractive Value
• Service designed delivered to meet targeted
  customers 'needs
• Solicit customer feedback

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An Integrated Approach to Service Management
The Eight Service Components (Variables)
Product Elements Place, Cyberspace, and Time
Promotion and Education Price and Other User
Outlays Process Productivity and Quality
People Physical Evidence
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IT Management vs IT Service Management

• Process orientation
• Business perspectives
• Proactive
• Active
• Clients
• Distributed
• Outsource
• Repeatable
• Integrated, Enterprise
• Official best practice
• Clear responsibility
• Services

• Technique orientation
• IT perspectives
• SWAT
• Passive
• Users
• Centralized
• Self-contain
• Once a time
• Isolated, Individual
• Unofficial work flow
• Mixed responsibility
• Operations

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Measurement of Services
Revenue

• Price
• Flexibility
• Competitiveness

• Service outcomes
• Availability
• Quality
• Value
• Variability
• Accessibility

Output

• Adaptability
• Innovation
• Focus
• Interchangeability

• Experience
• Prestige
• Satisfaction

Value

Productivity
Labor Capital

• Process
• Resource levels
• Risk
• Social capital
• Variability
• Waste

• Cohesiveness
• Complexity
• Correction
• Efficiency
• Optimization
• Risk

• Capability
• Capacity
• Cost

Input
Employees Total Cost
Version 1.0
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Criteria for effective Services Management
Service context Automation Breadth Visibility
Scalability Best practices Flexibility and
modularity Integration
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Challenges for Service Management

• Defining and improving quality
• Designing and testing new services
• Communicating and maintaining a consistent image
• Accommodating fluctuating demand
• Motivating and sustaining employee commitment
• Coordinating marketing, operations, and human
  resource efforts
• Setting prices
• Finding a balance between standardization versus
  personalization
• Ensuring the delivery of consistent quality

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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

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Service Engineering

• Service Engineering is
• A multi-disciplinary field
• To apply the theory and knowledge of service
  science into expression, definition, design,
  implementation, maintenance and reconfiguration
  of the services systems, in order to provide good
  services and to create more service value in the
  service lifecycle.
• Service engineering includes
• Service architecture, service methodology,
  service modeling
• Service engineering techniques, e.g. service
  semantics and knowledge management, service
  components and service reuse, service performance
  evaluation, service system design, etc.
• Support tools, platforms and environment

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Service Engineering IT Service Architecture
IT Service Architecture can be viewed from
various perspectives.
Span/Scope
View
Focus
Business Architecture
Business Structure and Processes
Non Functional Requirement, Architectural
Principles, Description Standards, Product
Selection,
IT Architecture
Applications Data Architecture
Detail Design for Data and Applications
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Service Engineering IT Service Methodology
Business Opportunity
Technology Availability
Business Strategy
IT Strategy
Strategies
Enterprise Architecture
Business Architecture
IT Architecture

• Processes
• Resource

• Applications
• Technology

Architectures
Information
IT Solutions
IT Solutions
Business Operating Environment and IT
Infrastructure IT Solutions
Projects
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Comparisons between Service and Manufacture Models
Unknown relationship
Back Stage (Factory)
Manufacturer (Product Provider)
Customer
Goods
Involve in the after-production phase only
Manufacture model
Involve in all phases (pre-production,
in-production, after-production)
Front Stage
Back Stage
Service Customer
Service Provider environment
Service Model
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Engineering model versus interpretive model for
enhancing productivity

• Engineering model in Manufactures
• Product design comes before process design
• Process predictable, repeatable
• For services, sometimes the engineering model
  works but has limitations.
• Human judgment is required !
• Interpretive model in Services
• Skills in understanding customer wants and needs
• Process continuously adaptive

Version 1.0
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The two models have different implications for
performance improvement
Engineering model Interpretive model
Design comes before process Product and process intertwined Product design emerges from the process, not specified in advance
Workers execute tasks Workers interpret needs and execute tasks
Improvements come from changes to design or process Improvements follow from improving workers ability to elicit and interpret, respond to the situation to select work practices from repertoire or learn or invent new services
Version 1.0
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Existing business model uses specialist expertise
to perform spend analyses
Case Study Interpretive model
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The Business Process Outsourcing (BPO) Business
Models introduced a third-party service provider
to perform these black box analyses
Case Study Interpretive model
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An End-to-End Service Management Scenario
lt IBM Tivoli Products
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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

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Service innovation is inherently multidisciplinary
SSME Service Sciences, Management, and
Engineering
Knowledge sources driving service innovations
Business Administration and Management
Business Innovation
Technology Innovation
Science Engineering
Demand Innovation
Social-Organizational Innovation
Global Economy Markets
Social Sciences
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What is SSME?

• SSME is the application of
• Scientific, management, and engineering
  disciplines to tasks that one organization
  beneficially performs for and with another (i.e.,
  services).
• SSME goal
• Make productivity, quality, performance,
  compliance, growth, and learning improvements
  more predictable in (co-production)
  relationships.
• SSME is the study of service systems
• Aimed at improving service systems

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Services Sciences, Management, and Engineering

• Science is a way to create knowledge
• Engineering is a way to apply knowledge and
  create new value
• Management improves the process of creating and
  capturing value
• Business Model is a way to apply knowledge and
  capture value

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A Service System Innovation Framework
Innovate (inside and outside) systems that create
value
The Ten Types of Innovation by Larry Keeley,
Doblin Inc.
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Some SSME Research Areas

• Measuring work, service intensity, and service
  complexity
• What are the limits to self-service? How much
  work can we shift to end-users?
• Representing and cataloging skills
• How do we organize and breakdown the human skills
  needed to do work? How can we take this into
  account in composing and optimizing teams?
• Global communication tools
• What are the barriers to highly productive
  human-human coordination? Distance, trust,
  communication, common ground, culture,
  technology?
• Service workforce management
• Application of supply chain methods to service
  supply chains, which are people-centered
• Effective service automation
• Understanding tradeoffs in human v.s. computer
  effort in creating customized business services

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SSME Timeline
Results
Adoption 2006-2008
SSME Launched 2004
Establish Awareness 2004-2006
Embed 2008-2010
Graduates and practice 2010 and beyond

• Broadened awareness
• SSME curriculum development
• Cross-industry SSME focus and buy-in
• Joint research projects/awards
• Case studies developed

• SSME tools and programs growing
• Service systems as complex systems
• Government and foundation funding
• SSME graduates
• Industry training
• Industry hiring plans

• White papers
• Initial discussions with university partners

• Workshops
• Press articles
• Web sites
• Awareness in academia, industry, govt
• Early adopters
• SSME Summit

• Better trained workforce
• Service innovation
• Sales impact
• Client satisfaction
• Productivity
• Efficiency
• Learning speed on engagements

Key Activities/Metrics
Reinforce
Plan
Mobilize
Execute
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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

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Cultivating New Skills

• Services Science, Management and Engineering
  (SSME)
• Collaboration with Academia, Industry and
  Government to drive services innovation in the
  21st century
• Designing University curricula to tightly link
  technical, business and societal disciplines
• Graduates may be solution designers, consultants,
  engineers, scientists, and managers who will grow
  into becoming entrepreneurs, executives,
  researchers, and practitioners
• SSME courses at selected Universities
• Oxford, Warwick, UC Berkeley, Stanford, MIT,
  Georgia Tech, ASU, Northwestern, RPI, Tsinghua,
  Peking, . . .

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Integration of Traditional Courses

• Multiple Programming Languages
• UCLA, CS131 JavaMLPrologPythonRubyScheme
• http//cs.ucla.edu/classes/winter10/cs131/syllabus
  .html
• Differences between Operating Systems
• VMware, Windows, Linux, Unix
• Data and Databases
• DB2, Oracle, SQL, Exchange, MySQL, DB2 Everyplace
  (DB2e)
• New Computing Models
• Cloud Computing, Mobile and Social Computing,
  Watson and Age of Smart Computing

80
Establishment of Emerging Courses

• Service Science Overview
• Concepts, Theories, Principles
• http//www.ibm.com/developerworks/spaces/ssme
• IT Service Management
• IT History, IT Service Practice, IT Service Soft
  Skills,
• http//software.nju.edu.cn/lingzong/ITSM.htm
• Information System and Service Design
• Service Strategy, Models, and Methods
• http//courses.ischool.berkeley.edu/i290-1/f08/ISD
  -Fall2008-Syllabus.html
• Latest Research Seminars

http//www-900.ibm.com/cn/ibm/university/news/IBM_
SSME.pdf
81
Service Research and Education is
Interdisciplinary
Across industries Across cultures Across
functions Across disciplines More
experienced More adaptive More collaborative
Broaden With SSME Educational program
In-depth knowledge of a specific discipline
82
T-Shaped Professionals Ready for T-eamwork!
83
Educating Service Engineers

• Depth vs breadth - The T Model

Deep technical knowledge (typical CSC graduate)
Good technical knowledge some breadth
Middle services manager - more breadth than
technical depth
Top services executive
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Topics

• Motivations
• Service Science
• Service Management
• Service Engineering
• SSME
• Challenges

85
The End !
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