1.Universities as Complex Service Systems:External and Internal Perspectives Giovanna Lella, Antonio Fischetto, Vittorio Cesarotti University of Rome Jim Spohrer, GuangJie Ren, YingTat Leung, Jorge Sanz IBM Almaden Research Center Frontiers in Service July 1, 2011, Columbus, OH

2. What is service science? A service system? The ABCs? Economics & Law Design/Cognitive Science Systems Engineering Operations Computer Science/ Artificial Intelligence Marketing a service system is a human-made system to improveprovider-customer interactions and value-cocreation outcomes, studied by many disciplines, one piece at a time. service science is thetransdisciplinarystudy ofservice systems & value-cocreation The ABCs: The provider (A) and a customer (B) transform a target (C) 3. Universities : Critical role in National, Regional, and City competitiveness University of Rome Tor Vergata Antonio Luigi Fischetto Master student in Management Engineering Tor Vergata University Rome- Italy 4.

• Correlation analyses to show the current importance of the universities in the different countries

5. US is literally off the chart but including US make correlation even higher: % of Top 500: 30,3 % % global GDP: 23,3 % Source: http://www.arwu.org/ARWUAnalysis2009.jsp The big relation betweenthe Percentage Distribution of Top 500 Universities and the Country GDP (2009) 6. US is still off the chart China projected to be off the chart in less than 10 years: % of Top 500: 33,865 % % global GDP: 28,365 % Source: http://www.arwu.org/ARWUAnalysis2009.jsp The big relation betweenthe Percentage Distribution of Top 500 Universities and the Country GDP (2004) China in 2009 2004-2009: Relative Change China (+3,+1.7), US (-3.5,-5) 7. Key characteristics of the new economy To be globally competitive countries need to invest in their Innovation Systems and human capital developmentnot only at the national, but also regional level Universities and other higher education institutions can play a key role in Regional Innovation Systems and Human Capital Formation.. Every great city has at least one university it is almost a diagnostic sign of being a major city. A university acts like a talisman.Professor Eric Thomas Bristol University Source: Power Point Presentation, Universities as engines for the development of their regions, OECD, 2008 8. The role of the university Employment impact Impact of expenditures Impact on knowledge 9.

• Describing and understanding the importance and the effects deriving from the presence of the university.

• Quantitative data to reinforce the main proposition:

• Is the university an economic engine for the city?

10. Impact of expenditures: how to measure it Source:The Difference a University Makes: An Impact Analysis of theUniversity at Buffalo, 2007 11. Economic impact:University at Buffalo Indirect and induced effects Direct effects 2005-2006 academic year Type: Public Students: 28,881 Endowment: $410,500,000Ranking: 230 Source:The Difference a University Makes: An Impact Analysis of theUniversity at Buffalo, 2007 12. Economic impact: Harvard and Boston Universities *Purchasing of goods and services. * Type: Private Students: 21,125 Endowment: $26,035,000,000 Ranking: 1 Type: Private Students: 31,766 Endowment: $892,100,000Ranking: 74 13.

U.S.

The net contribution to the U.S. economy by foreign students and their families for 2005-06 is almost $13.5 billion and for 2007-08 is$15.543 billion with 623,805 International students (21.51% of global students) .

Education is the fourth largest source of net exports in the U.S. behind:

1.Royalties & license fees

• 2.Business, professional, and technical services

• 3.Financial services

Canada

After bringing in $6.5 billion in 2008, Canadas education export now tops the regular revenue the country gains from exporting certain natural resources, such as coal, which normally accounts for $6.07 billion per year.

Nearly 65,000 jobs in the education services industry were directly supported by the funds generated by international students, equal to 5.5 per cent of all jobs in the sector.

Source: Power Point presentation TRENDS IN INTERNATIONAL HIGHER EDUCATION ,Marguerite J. Dennis, 2007; The economic impact of UK higher education institutions, Universities UK, 2006; http://www.bmimedia.net/bmi/news.php?cod=13

International Higher Education is a big business

In 2006, there were over 2,9 million international students worldwide, a 3% increase over the previous year.

The impact of International Higher Education Contribution to the economic impact 14.

United Kingdom

Personal (off-campus) expenditure of international students attending UK HEIs in 2003-2004 was estimated to be 1.5 billion. This was equivalent to 9% of all UK receipts from overseas visitors to the UK for the year 2004.

In 2003/04 there were 300,050 students from outside the UK registered at UK institutions. These made up around 13% of the total student population.

Australia

Australias exports of education were worth $15.5 billion in 2008. Education as

an export has displaced tourism as Australias largest service export. Education is Australias third largest export, behind only coal and iron ore.

Australias international student program generates a total of 126,240 jobs, increasing employment in Australia by about 1.2%.

Source: Power Point presentation TRENDS IN INTERNATIONAL HIGHER EDUCATION ,Marguerite J. Dennis, 2007; The economic impact of UK higher education institutions, Universities UK, 2006; http://www.bmimedia.net/bmi/news.php?cod=13;The Nature of International Education in Australian Universities and its Benefits

The impact of International Higher Education Contribution to the economic impact 15. University in the top ten largest employers Impact on employment 21903 16. Largest Silicon Valley employers The role of higher education in the regions economy:stability and growth University in the top ten largest employers Impact on employment 17. Universities as economic growth engines (the supply side effects) Regional contexts Contribution to Regional Capacity Building Contribution of research to regional innovation Contribution of teaching and learning to labour market and skills Contribution to social and cultural development and environmental sustainability Regional/ National Higher Education systems 18. Effects of research, spin offs, start ups companies Impact upon knowledge

Complex to study and analyze but, at the same time, very important.

Harvard University * National Institutes of Health (NIH). * Influence on the local area 19. Effects of research, spin offs and start up companies Spinoff companies that have built on knowledge created at Colorado State University: Stanford University: 14 of the 17 companies are located in the same area of the university (Fort Collins) 20. Huge contribution of the University Medical Centers University Medical Centers bring together state-of-the-art research with the highest-quality clinical care. At the same time, their location - frequently in the heart of downtown areas - makes them play a cruciant role in providing health care to the local community. Increasing importance of Health Care and Higher Education Services Consequent bigger impact of the University when it has a Medical Center inside 21. University Medical Centers are the biggest sources of revenues and, at the same of time, the biggest source of expenditures for the University Huge contribution of the University Medical Centers 22.

You probably cant have a great university without a great city.

• The presence of a city that supports the university is essential in a value co-creation and growth perspective.

The importance of the city for having a good university CITY UNIVERSITY How important is the city for the university?It is not coincidental that the best universities are in U.S. ; the U.S. expenditures per student at the postsecondary level (from public and private sources) were $25,109 in 2006, more than twice as high as the OECD average of $12,336. Source: Pdf report, The condition of education 2010, NCES

R&D projects, spin offs, start ups companies rely on the quality of the city in terms of:

wealth and GDP;

industrial andtechnological growth;

presence of good companies intended to grow and invest money;

investments of the city on education.

23. Conclusions CITY UNIVERSITY City important for the university University important for the city Key success factorA strong relation between Universities and Cities The WIN WIN solution for the future! The growth of the city is really influenced by the presence of a great university. The extent of the university impacts strongly relies on the support of the local city. 24. University as a Complex Service System:Developing a Multiple-Stakeholder Tool for Satisfaction Improvement University of Rome Tor Vergata Giovanna Lella Masters student in Management Engineering Tor Vergata University Rome- Italy 25. UNIVERSITY Output Process Input STUDENTS FACULTIES AND ADMINISTRATION BUSINESSES Main stakeholders 26. After a study of 11 University around the world, we came up with ageneral structure of the University 27. F U N C T I O N S University SERVICES STUDENTS FACULTIES BUSINESSES ADMINISTRATION The same stakeholder could be the service provider, or the service customer, or both. 28.

Service Blueprinting

for multiple stakeholders

29. Components of Service Blueprints There are five components of a typical service blueprint : Line of interaction Line of visibility Line of internal interaction PHYSICAL EVIDENCE USER ACTIONS FRONT STAGE BACK STAGE SUPPORT 30. An example: Exam 31. Exam:student - professor student - administration student professor administration PHYSICAL EVIDENCE Computer Outside the classroom Outside the classroom, other students Classroom Desk, chair, professor Classroom Professors office USER ACTIONS Book the exam Wait outside the classroom Show the ID Take place Take the exam Delivery and leave Verbalize (signature) FRONT STAGE Call the student reading the list Distribution of the exams papers Supervision Collect exams papers Validation BACK STAGE Grade and publication of the results Update ofthe database SUPPORT Automatic booking system Post on line Database 32. Exam:professor - student professor - administration student professor administration PHYSICAL EVIDENCE Administration office Computer Classroom and office Computer Professors office USER ACTIONS Request of classroom for exam date Publication of the exam date Exam and grate Publication of the grade Validation FRONT STAGE Take the information Student takes the exam Student accept the rate and sign BACK STAGE Time schedule and classroom management Administration confirms the date/ Student books the exam SUPPORT Database Post on line Database 33. MULTIPLE USERS: student and professor student professor administration PHYSICAL EVIDENCE Administration office Computer Computer Outside the classroom Outside the classroom Classroom Desk, chair, professor Classroom Computer Professors office USER ACTIONS Request of classroom for exam date Publicationoftheexams date Book the exam Wait outside the classroom Call thestudentreading the list Take place Take theexam Delivery and leave the classroom Publication of the grade Verbalize (signature) FRONT STAGE Administration takes the information Showhis ID Distributionof the exams papers Supervision Collect exams papers Validation BACK STAGE Time schedule and classroom management Administration confirms thedate Grade the students exams Registration on the database SUPPORT Database Automatic booking system Post on line Database 34. Tool:IBM Business ProcessManagement Blueprint

http://blueprint.lombardi.com/

35. Date and classroom Choice of the date Communication of exam's date Administration takes the information Time schedule and classroom management Administration confirms the date Booking of the exam Publication of the date Books the exam on line Roll call Wait outside the classroom Read the students list Show his ID Take place Exam phase Distribuction of the exam's papers Take the exam Supervision Delivery and leave the classroom Collect the papers Grade Grade the exam Publish the grade Verbalization Signature Validation Update the information MILESTONES A C T I V I T I E S DISCOVERY MAP student professor administration 36. PROCESS DIAGRAM 37. PROCESS DIAGRAM and participants 38.

STUDENTS :

Good job (good salary, job quality)

Good preparation (Good teachers, labs, teaching organization)

Good value for money

Services (Simple bureaucracy, scholarships, dormitories, transportation, sports)

2. FACULTIES:

Prestige and visibility

Investments from public and private companies

Good employees (teachers and researchers )

3. ADMINISTRATION STAFF :

Academic organization

Resource management

Cost reduction

4. BUSINESSES :

Skilled students as future employees

Research partners

Different expectations for each stakeholder University 39. Since a University must satisfy many stakeholders, it has to be organized as a Service System to obtainvalue co-creation (win-win perspective) THE GOAL: 40. Tableau

The tableau is a method that serves as a guide for the university to improve service quality by taking thevalue co-creation perspective ondifferent stakeholders satisfaction.

Tableau is the French word for table 41. Tableau The complete analysis is organized in spreadsheets, one per service.Every service is described by thetableau : 42. I,II,III,IVDescription of the table VIFigure out the main weaknesses VIIIAct IXRepeat VMeasure of the current level of satisfaction andof the existing gap with the target expectations Flow chart of thetableau method VIIPotential solution and feasibility analysis 43. 44. Take the activitiesfrom the high priority box Select one activity A ifrom the list Look at the subscript i of A iLook at the color of A i Typology of the decisions Activity and decision boxes Number of decision-makers Solution from the driving-question Expectations for the specific stakeholder Potential conflicts Evaluation of the complexity of the potential solutions Are the solutions too much complex? no yes STEP VIII: Act (Apply the potential solutions to improve the quality of the service) Re-engineering the activity A i Update the tableau (restart from theSTEP IuntilSTEP V) End Start 45. Conclusions

University is aServiceSystem

We have analyzed the University through:

blueprinting

tableau

Different tools but with a common base:

they areMULTIPLE STAKEHOLDERS-ORIENTED , with the purpose to co-create value not only for the University but also for the entire society.

46. Outline

Service science: The study of service systems

• Service systems thinking: The ABCs

• Service systems dynamics: Four drivers of change

• Service systems re-design: Some examples

• • A College Course

• • K-12 & Higher Education

• • • Higher Education Specialization Opportunities (Depth)

• • • K-12 General Education Preparation (Breadth)

• • The Goal: Adaptive T-shaped professionals (life-long learning) & Quality-of-Life measures

Why? Data and trends: Global growth of sophisticated service systems

• Why and how technology is changing jobs

• Why higher education & certification levels matter (to individuals)

• And therefore, why higher education matters (to nations)

• Why the study of service systems matters (to nations)

• Why the study of service systems matters (to businesses)

End notes: Beyond fragile local specialization, toward robust regional sustainability

• The birth of service science (now related programs in 500+ universities worldwide)

• What about advanced manufacturing, outsourcing, sustainability challenges?

• • Holistic-product-service-systems, regional capacity, regional innovation ecosystems

• Learning more about service systems - pointers to 200+ books & the conceptual foundations

47. Service Systems Thinking: ABCs

Example Provider: College (A)

Example Target: Student (C)

Discuss: Who is the Customer (B)?

Student? They benefit

Parents? They often pay

Future Employers? They benefit

Professional Associations?

Government, Society?

A B C

A. Service Provider

Individual

Institution

Public or Private

C. Service Target: The reality to be

transformed or operated on by A,

for the sake of B

Individualsor people, dimensions of

Institutionsor business and societal organizations,organizational (role configuration) dimensions of

Infrastructure /Product/Technology/Environment,physical dimensionsof

Informationor Knowledge, symbolic dimensions

B. Service Customer

Individual

Institution

Public or Private

Forms of Ownership Relationship (B on C) Forms of Service Relationship (A & B co-create value) Forms of Responsibility Relationship (A on C) Forms of Service Interventions (A on C, B on C) Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a science of service systems.Computer, 40 , 71-77. From Gadrey (2002), Pine & Gilmore (1998), Hill (1977) Vargo, S. L. & Lusch, R. F. (2004).Evolving to a new dominant logic for marketing.Journal of Marketing, 68 , 1 17. Service is the application of competence for the benefit of another entity. 48. Service System Dynamics: Four Key Drivers of Change

Provider: Technology (Tech) & Sustainable Value-Cocreation Models

• New technology to boost productivity & capacity (innovate)

• Use technology to perform routine manual, cognitive, and transactional work

• New relationship networks: Business models and new ventures (for-profit & non-profits)

Customer: Self Service

• New self-service options to lower costs & expand choice (educate)

Authority: Rules

• New rules to fix problems & achieve policy goals (regulate)

• Institutional diversity and governance of resource commons (Ostrom et. al.)

Competitors: Rankings

• New rankings to guide decision-making & gain valued customers (differentiate)

• Hint: You want to be at the top of an independently ranked list of what customers are looking for

• Especially for valued customers - calculating customer lifetime value (Rust et. al.)

49. Example Service System Re-Design: A College Course

Problem: What if a college course had

• Input: Student quality lower

• Process: Faculty motivation lower

• Output: Industry fit lower

Solution: Tech + Self-Service

• E: -20% E-learning enrollmentpre-certification

• F. +10% Faculty interest tuning

• J. +10% on-the-Job skills tuning

After a decade the course may look quite different Service systems are learning systems: productivity, quality, compliance, sustainable innovation Maglio, P., Srinivasan, S., Kreulen, J.T., Spohrer, J. (2006), Service systems, service scientists, SSME, and innovation. Communications of the ACM, 49(7), 81-85.Year 1: 20% Year 2: 20% Year 3: 20% Year N: 20% ........ E F J 50. Example: Specialization Opportunities for Higher Education disciplines systems Systems that focus on flows of thingsSystems that govern Systems that support peoples activities transportation &supply chain water &waste food & products energy& electricity building &construction healthcare & family retail & hospitality banking & finance ICT & cloud education&work city secure state scale nation laws 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 theory and strategy e.g., psychology e.g., industrial eng. e.g., computer sci e.g., knowledge mgmt e.g., stats & design e.g., knowledge worker e.g., consultant e.g., entrepreneur stakeholders Customer Provider Authority Competitors resources People Technology Information Organizations change History (Data Analytics) Future (Roadmap) value Run Transform (Copy) Innovate (Invent) Starting Point 1: Observing the Stakeholders (As-Is) Starting Point 2: Observing their Resources & Access (As-Is)Change Potential: Thinking (Has-Been & Might-Become) Value Realization: Doing (To-Be) 51. K-12 STEM: The systems we live in, and the systems we are Imagine a better service system, and use STEM language to explain why it is better STEM = Science, Technology, Engineering, and Mathematics See 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 Service 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/Home (Bio)

• 9 Education/Campus & Work Life/Jobs & Entrepreneurship (Cogno)

• 10 City(Government)

• 11 State /Region (Government)

• 12 Nation(Government)

• Higher Ed T-shaped depth added, cross-disciplinary project teams

• Professional Life Adaptive T-shaped life-long-learning & projects

Systems that focus on Governing Systems that focus on Human Activities and Development Systems that focus on Flow of things 52. The Goal: Adaptive Innovators, so called T-shaped professionals Ready for Life-Long-Learning Ready for T-eamwork Ready to build a Smarter Planet SSME+D = Service Science, Management, Engineering + Design Manydisciplines (understanding & communications ) Many systems (understanding & communications) Deep in one discipline (analytic thinking & problem solving) Deep in one system (analytic thinking & problem solving) Many multi-cultural-team service projects completed (resume: outcomes, accomplishments & awards) BREADTH DEPTH 53. The Goal: Quality-of-Life measures improve Education system transfers and expands body-of-knowledge

A. Systems that focus on flow of things that humans need (~15%*)

• 1.Transportation& supply chain

• 2.Water& waste recycling/Climate & Environment

• 3.Food& products manufacturing

• 4.Energy& electricity grid/Clean Tech

• 5.Informationand 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 & sports (23%*)

• 8.Banking& finance/Business & consulting (wealthy) (21%*)

• 9.Healthcare& family life (healthy) (10%*)

• 10.Education& work life/Professions & 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 & commercial development opportunities/investments (sales tax)

• 13.Nations /NGOs & citizens rights/rules/incentives/policies/laws (income tax)

20/10/10 0/19/0 2/7/4 2/1/1 7/6/1 1/1/0 5/17/27 1/0/2 24/24/1 2/20/24 7/10/3 5/2/2 3/3/1 0/0/0 1/2/2 Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities * = US Labor % in 2009. 61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US) 54. Data: Why and how technology is changing jobs Levy, F, & Murnane, R. J. (2004).The New Division of Labor: How Computers Are Creating the Next Job Market.Princeton University Press. Expert Thinking Complex Communication Routine Manual Non-routine Manual Routine Cognitive 55. Data: Why education certification levels matter (to individuals) But it can be costly, American student loan debt is over $900M 56. Data: And therefore, why higher education matters (to nations) % WW GDP and % WW Top-500-Universities Strong Correlation (2009 Data): National GDP and University Rankings http://www.upload-it.fr/files/1513639149/graph.html 57. Data: Why the study of service systems matters (to nations) Parallels the growth of citiesand the digital knowledge economy High Talent Individuals High Tech Infrastructure 42% 64 33 3 1.4 Germany 37% 26 11 63 2.1 Bangladesh 19% 20 10 70 1.6 Nigeria 45% 67 28 5 2.2 Japan 64% 69 21 10 2.4 Russia 61% 66 14 20 3.0 Brazil 34% 39 16 45 3.5 Indonesia 23% 76 23 1 5.1 U.S. 35% 23 17 60 14.4 India 142% 29 22 49 25.7 China 40yr Service GrowthS % G % A% Labor % WW Nation Worlds Large Labor Forces A = Agriculture, G = Goods, S = Service 2010 2010 CIA Handbook, International Labor Organization Note: Pakistan, Vietnam, and Mexico now larger LF than Germany US shift to service jobs (A) Agriculture: Value fromharvesting nature (G) Goods: Value frommaking products (S) Service: Value from IT augmented workers in smarter systems that create benefits for customersand sustainably improve quality of life. 58. Data: Why the study of service systems matters (to businesses) SOFTWARE SYSTEMS (AND FINANCING) SERVICES 2010 Pretax Income Mix Revenue Growth by Segment Services Software Systems 44% 17% 39% IBM Annual Reports 59. Stakeholder Priorities Education Research Business Government ServiceSystems Customer-provider interactions that enable value cocreation Dynamic configurations of resources: people, technologies, organisations and information Increasing scale, complexityand connectedness of service systems B2B, B2C, C2C, B2G, G2C, G2G service networks ServiceScience To discover the underlying principles of complex service systems Systematically create, scale and improve systems Foundations laid by existing disciplines Progress in academic studies and practical tools Gaps in knowledge and skills Develop programmes & qualifications Service Innovation Growth in service GDP and jobs Service quality& productivity Environmental friendly & sustainable Urbanisation & aging population Globalisation & technology drivers Opportunities for businesses, governments and individuals Skills & Mindset Knowledge & Tools Employment & Collaboration Policies& Investment Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015 Encourage an interdisciplinary approach The white paper offers a starting point to -The Birth of Service Science:A Framework for Progress ( http://www.ifm.eng.cam.ac.uk/ssme/ ) Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008) Glossary of definitions, history and outlook of service research, global trends, and ongoing debate 1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions 60. Stakeholder Priorities Education Research Business Government ServiceSystems Customer-provider interactions that enable value cocreation Dynamic configurations of resources: people, technologies, organisations and information Increasing scale, complexityand connectedness of service systems B2B, B2C, C2C, B2G, G2C, G2G service networks ServiceScience To discover the underlying principles of complex service systems Systematically create, scale and improve systems Foundations laid by existing disciplines Progress in academic studies and practical tools Gaps in knowledge and skills Develop programmes & qualifications Service Innovation Growth in service GDP and jobs Service quality& productivity Environmental friendly & sustainable Urbanisation & aging population Globalisation & technology drivers Opportunities for businesses, governments and individuals Skills & Mindset Knowledge & Tools Employment & Collaboration Policies& Investment Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015 Encourage an interdisciplinary approach The white paper offers a starting point to -The Birth of Service Science: IBM Centennial Icon of Progress ( http://www.ifm.eng.cam.ac.uk/ssme/ ) Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008) Glossary of definitions, history and outlook of service research, global trends, and ongoing debate 1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions 61. What about advanced manufacturing? http://www.youtube.com/watch?v=nd5WGLWNllA 62. Rethinking Product-Service Systems F B Service System Entity Product-Service-System B F SSE B F SSE B F SSE B F SSE B F SSE B F SSE B F SSE B F SSE B F SSE B F SSE B F F F B B Service Business Product Business Front-Stage Marketing/Customer Focus Back-Stage Operations/Provider Focus Based on Levitt, T (1972) Production-line approach to service. HBR. e.g., IBM e.g., Citibank Everybody is in service... Something is wrongThe industrial world has changed faster than our taxonomies.. 63. Holistic Product-Service-Systems & Regional Innovation Ecosystemshttp://www.service-science.info/archives/1056

Examples: Nations, States, Cities, Universities, Luxury Hotels, Cruise Ships, Households

Whole Service Subsystems: Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.

Definition: A service system that can support its primary populations, independent of all external service systems, for some period of time, longer than a month if necessary, and in some cases, indefinitely

Balance independence with interdependence, without becoming overly dependent (outsourcing limits, maximum re-cycling for sustainability)

~25-50% of start-ups are new IT-enabled service offerings SaaS PaaS IaaS http://www.thesrii.org Nation State/Province City/Region Hospital Medical Research University Colleges K-12 Luxury Resort Hotels Family (household ) Person (professional ) For-profits Non-profits Start-Ups New Ventures 64. Thought Experiment: Pet-Cities (Petri-Dish Binary-Cities)

Imagine nested holistic product-service-systems

• 10 Continents/planet

• 10 Nations/continent

• 10 States/nation

• 10 Cities/state

• 4 Sectors/city

• 11 Systems/sectors

City toggles each generation

• 20 years/generation

• New infrastructure/generation

Purpose

• World Simulator benchmarking

• Game: Search to accelerate learning

• • 10,000 city experiments/generation

• • Low skill/raw materials > Hi-talent/tech

• Each generation new outcomes

• • Talents (skills & jobs)

• • Technologies (recycle & rebuild)

• • Investments (script & performance)

High Talent Individuals High Tech Infrastructure Toggle each generation 20 year cycle In-Use Occupied De-construction Re-construction water food/products energy ICT R&H/M&E/C&S finance health education governance transportation buildings/family Sector 1 11 Systems Sector 2 Sector 3 Sector 4 65. Learning More About Service Systems

Fitzsimmons & Fitzsimmons

• Graduate Students

• Schools of Engineering & Businesses

Teboul

• Undergraduates

• Schools of Business & Social Sciences

• Busy execs (4 hour read)

Ricketts

• Practitioners

• Manufacturers In Transition

And 200 other books

• 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.

URL:http://www.cob.sjsu.edu/ssme/refmenu.asp

Reaching the Goal:How Managers Improvea Services BusinessUsing GoldrattsTheory 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

66. Service Science: Conceptual Framework

Resources:Individuals, Institutions, Infrastructure, Information

Stakeholders:Customers, Providers, Authorities, Competitors

Measures:Quality, Productivity, Compliance, Sustainable Innovation

Access Rights:Own, Lease, Shared, Privileged

Spohrer, JC (2011) On looking into Vargo and Lusch's concept of generic actors in markets, or It's all B2B and beyond!Industrial Marketing Management, 40(2), 199201. Ecology (Populations & Diversity) Entities (Service Systems, bothIndividuals & Institutions) Interactions (Service Networks, link, nest, merge, divide) Outcomes (Value Changes, both beneficial and non-beneficial) Value Proposition (Offers & Reconfigurations/ Incentives, Penalties & Risks) Governance Mechanism (Rules & Constraints/ Incentives, Penalties & Risks) Access Rights (Relationships of Entities) Measures (Rankings of Entities) Resources (Competences, Roles in Processes, Specialized, Integrated/Holistic) Stakeholders (Processes of Valuing, Perspectives, Engagement) Identity (Aspirations & Lifecycle/ History) Reputation (Opportunities & Variety/ History) prefer sustainablenon-zero-sumoutcomes, i.e., win-win win-win lose-lose win-lose lose-win 67. Service system entities configure four types of resources

First foundational premise of service science:

• Service system entities dynamically configure four types of resources

• Resources are the building blocks of entity architectures

Named resources are:

• Physical or

• Not-Physical

• Physicist resolve disputes

Named resources have:

• Rights or

• No Rights

• Judges resolve disputes

Spohrer, J & Maglio, P. P. (2009)Service Science: Toward a Smarter Planet.In Introduction to Service Engineering.Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. . Formal service systems can contract to configure resources/apply competence Informal service systems can promise to configure resources/apply competence Trends & Countertrends (Balance Chaos & Order): (Promise) Informal Formal (Contract) (Relationships & Attention) Social Economic (Money & Capacity) (Power) Political Legal (Rules) (Evolved) Natural Artificial (Designed) (Creativity) Cognitive Labor Information Technology (Routine) (Dance) Physical Labor Mechanical Technology (Routine) (Relationships) Social Labor Transaction Processing (Routine) (Atoms) Transportation Communication (Bits) (Tacit) Qualitative Quantitative (Explicit) (Secret) Private Public (Shared) (Anxiety-Risk) Challenge Routine (Boredom-Certainty) (Mystery) Unknown Known (Justified True Belief) Physical Not-Physical Rights No-Rights 2. Technology/ Environment Infrastructure 4. Shared Information / Symbolic Knowledge

People/ Individuals

3. Organizations/ Institutions 68. Service system entities calculate value from multiple stakeholder perspectives

Second foundational premise of service science

• Service system entities calculate value from multiple stakeholder perspectives

• Value propositions are the building blocks of service networks

A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives ofmultiple stakeholders according to culturally determined value principles.

The four primary stakeholder perspectives are:customer,provider, authority, and competitor

• Citizens: special customers

• Entrepreneurs: special providers

• Parents: special authority

• Criminals: special competitors

Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet.In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. . Value propositions coordinate & motivate resource access Model of competitor: Does it put us ahead? Can we stay ahead? Does it differentiate us from the competition? Will we? (invest to make it so) Strategic Sustainable Innovation (Market share) 4.Competitor (Substitute) Model of authority: Is it legal? Does it compromise our integrity in any way? Does it create a moral hazard? May we? (offer and deliver it) Regulated Compliance (Taxes and Fines, Quality of Life) 3.Authority Model of self: Does it play to our strengths? Can we deliver it profitably to customers? Can we continue to improve? Can we? (deliver it) Cost Plus Productivity (Profit, Mission,Continuous Improvement, Sustainability) 2.Provider Model of customer: Do customers want it? Is there a market?How large? Growth rate? Should we? (offer it) Value Based Quality (Revenue) 1.Customer Value Proposition Reasoning Basic Questions Pricing Decision Measure Impacted Stakeholder Perspective (the players) 69. Service system entities reconfigure access rights to resources by mutually agreed to value propositions

Third foundational premise of service science

• Service system entities reconfigure access rights to resources by mutually agreed to value propositions

• Access rights are the building blocks of the service ecology (culture and information)

Access rights

• Access to resources that are owned outright (i.e., property)

• Access to resource that are leased/contracted for (i.e., rental car, home ownership via mortgage, insurance policies, etc.)

• Shared access (i.e., roads, web information, air, etc.)

• Privileged access (i.e., personal thoughts, inalienable kinship relationships, etc.)

Spohrer, J & Maglio, P. P. (2009)Service Science: Toward a Smarter Planet.In Introduction to Service Engineering.Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. . service = value-cocreation B2B B2C B2G G2C G2B G2G C2C C2B C2G *** provider resources Owned Outright Leased/Contract Shared Access Privileged Access customer resources Owned Outright Leased/Contract Shared Access Privileged Access OO SA PA LC OO LC SA PA S A P C CompetitorProviderCustomerAuthority value-proposition change-experience dynamic-configurations (substitute) time 70. Service system entities interact to create ten types of outcomes

Four possible outcomes from a two player game

ISPAR generalizes to ten possible outcomes

• win-win: 1,2,3

• lose-lose: 5,6, 7, maybe 4,8,10

• lose-win: 9, maybe 8, 10

• win-lose: maybe 4

Maglio PP, SL Vargo, N Caswell, J Spohrer:(2009) The service system is the basic abstraction of service science. Inf. Syst. E-Business Management 7(4): 395-406 (2009) lose-win (coercion) win-win (value-cocreation) lose-lose (co-destruction) win-lose (loss-lead) WinLose Provider LoseWin Customer ISPAR descriptive model 71. Service system entities learn to systematically exploit technology: Technology can perform routine manual, cognitive, transactional work March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87. Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY. L Learning Systems (Choice & Change) Exploitation (James March) Exploration (James March) Run/Practice-Reduce (IBM) Transform/Follow (IBM) Innovate/Lead (IBM) Operations Costs Maintenance Costs Incidence Planning &Response Costs (Insure) Incremental Radical Super-Radical Internal External Interactions To be the best, learn from the rest Double monetize, internal win and sell toexternal Try to operate inside the comfort zone 72. Service system entities are physical-symbol systems

Service is value cocreation.

Service system entities reason about value.

Value cocreation is a kind of joint activity.

Joint activity depends on communication and grounding.

Reasoning about value and communication are (often) effective symbolic processes.

Newell, A (1980) Physical symbol systems,Cognitive Science , 4, 135-183. Newell, A & HA Simon(1976). Computer science as empirical inquiry: symbols and search. Communications of the ACM, 19, 113-126. 73. Summary Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet.In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ. . 5. Exploit information & technology 6. Physical-Symbol Systems Physical Not-Physical Rights No-Rights 2. Technology/ Infrastructure 4.. Shared Information

People/ Individuals

3. Organizations/ Institutions 1. Dynamically configure resources (4 Is) Model of competitor: Does it put us ahead?Will we? Strategic Sustainable Innovation 4.Competitor/ Substitutes Model of authority: Is it legal?May we? Regulated Compliance 3.Authority Model of self: Does it play to our strengths?Can we? Cost Plus Productivity 2.Provider Model of customer: Do customers want it?Should we? Value Based Quality 1.Customer Reasoning Questions Pricing Measure Impacted Stakeholder Perspective 2. Value from stakeholder perspectives S A P C 3. Reconfigure access rights 4. Ten types of outcomes (ISPAR) 74. Smarter = Sustainable Innovation (reduce waste, expand capabilities) Computational System Building Smarter Technologies Requires investment roadmap Service Systems:Stakeholders & Resources 1. People2. Technology 3. Shared Information 4. Organizations connected by win-win value propositions Building Smarter Universities & Cities Requires investment roadmap 75. Time ECOLOGY 14B Big Bang (Natural World) 10K Cities (Human-Made World) Sun writing (symbols and scribes) Earth written laws bacteria (uni-cell life) sponges (multi-cell life) money (coins) universities clams (neurons) trilobites (brains) printing press (books) steam engine Where is the Real Science - mysteries to explain? In the many sciences that study the natural and human-made worlds Unraveling the mystery of evolving hierarchical-complexity in new populations To discover the worlds architectures and mechanisms for computing non-zero-sum Entity Architectures ( N ) of nested, networked Holistic Service Systems (HSS) 200M bees (social division-of-labor) 60 transistor