© 2010 IBM CorporationIBM UP (University Programs) 1 Urban Systems and Service Innovation: Cities...

© 2010 IBM CorporationIBM UP (University Programs)1

Urban Systems and Service Innovation: Cities and Universities Partnering to Enhance Sustainability

Dr. James (“Jim”) C. SpohrerDirector, IBM University Programs (IBM UP)[email protected] IBM Almaden Research Center, San Jose, CA 95120 USAFor: Definitions Discussions

April 17, 2010

“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org

“Cities learning from cities learning from cities.” – Fundacion Metropoli“Think global, act local.” – Geddes

“The future is born in universities.” – Kurilov“The best way to predict the future is to build it.” – Kay

“The future is already here… It is just not evenly distributed.” – Gibbons“Real-world problems do not respect discipline boundaries.” – Popper

“Today’s problems come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells


Outline

1. Quality of life: Everyday we depend on systems…

2. The world’s system of systems ($54 trillion value, $4 trillion waste)

3. Grand challenges: The race between education and catastrophe

4. A vital partnerships: Cities and universities (get these building blocks right)

5. IBM University Programs: Doing our part (2010 key directions, 5 R’s)

6. Trend: Growing importance of service systems (IT-enabled division-of-labor)

7. Future skill needs: T-shaped (deep & broad) service system experts

8. Smarter = Sustainable innovation (reduce waste, expand capabilities)

© 2010 IBM CorporationIBM University Programs (IBM UP)3

Quality of life: Everyday we depend on systems…

A. Systems that focus on flow of things that humans need (~15%)1. Transportation & supply chain

2. Water & waste recycling/Climate & green tech

3. Food & products manufacturing

4. Energy & electricity grid

5. Information and Communication Technologies (ICT access)B. Systems that focus on human activity and development (~70%)

6. Buildings & construction (smart spaces) (5%)

7. Retail & hospitality/Media & entertainment (tourism) (23%)

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

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

10. Education & work life/Professional jobs & entrepreneurship (wise) (9%)C. Systems that focus on human governance - security and opportunity (~15%)

11. Cities & security for families and professionals (property tax)

12. States/regions & development opportunities/investments (sales tax)

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

(Quality of Service & Jobs) + Returns + Security + SustainabilityMeasure -> Quality, Productivity, Compliance, “Smarter”

“Smarter” = Sustainable Innovation (continuously reduce waste, expand capabilities)


Communication$ 3.96 Tn

Transportation$ 6.95 Tn

Leisure / Recreation / Clothing

$ 7.80 Tn

Healthcare$ 4.27 Tn

Food$ 4.89 Tn

Infrastructure$ 12.54 Tn

Govt. & Safety$ 5.21 Tn

Finance$ 4.58 Tn

Electricity$ 2.94 Tn

Education$ 1.36 Tn

Water$ 0.13 Tn

Global system-of-systems$54 Trillion

(100% of WW 2008 GDP)

Same IndustryBusiness SupportIT SystemsEnergy ResourcesMachineryMaterials Trade

Legend for system inputsNote:1. Size of bubbles represents

systems’ economic values2. Arrows represent the strength of

systems’ interaction

Source: IBV analysis based on OECD

Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis)

This chart shows ‘systems‘ (not ‘industries‘)

Our planet is a complex system-of-systems

1 Tn


Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated

Global economic value of

System-of-systems

$54 Trillion100% of WW 2008 GDP

Inefficiencies$15 Trillion28% of WW 2008 GDP

Improvement potential

$4 Trillion7% of WW 2008 GDP

How to read the chart:

For example, the Healthcare system‘s value is $4,270B. It carries an estimated inefficiency of 42%. From that level of 42% inefficiency, economists estimate that ~34% can be eliminated (= 34% x 42%).

We now have the capabilities to manage a system-of-systems planet

Source: IBM economists survey 2009; n= 480

System inefficiency as % of total economic value

Impr

ovem

ent

pote

ntia

l as

% o

f sy

stem

inef

ficie

ncy

Education1,360

Building & Transport Infrastructure

12,540

Healthcare4,270

Government & Safety5,210

Electricity2,940

Financial4,580

Food & Water4,890

Transportation (Goods & Passenger)

6,950

Leisure / Recreation /

Clothing7,800

Communication3,960

Analysis of inefficiencies in the planet‘s system-of-systems

Note: Size of the bubble indicate absolute value of the system in USD Billions

42%

34%

This chart shows ‘systems‘ (not ‘industries‘)

15%

20%

25%

30%

35%

40%

15% 20% 25% 30% 35% 40% 45%


How do we involve universities?How do weave a “total solution” that includes universities?


IBM’s Smarter Planet Grand Challenge: Smarter Systems

A. Systems that focus on flow of things humans need

1. Transportation & Supply Chain

Traffic, Rail

2. Water & Waste/Climate & Green tech

Water

3. Food & Products

Food, Products

4. Energy & Electricity

Energy, Oil

5. Information & Communication Technology

Intelligence, Telecom, Cloud Computing

B. Systems that focus on human activity & development

6. Buildings & Construction (smart spaces)

Buildings, Infrastructure

7. Retail & Hospitality/Media & Entertainment (tourism)

Retail

8. Banking & Finance/Business & Consulting

Banking, Stimulus

9. Healthcare & Family Life

Healthcare

10. Education & Work Life/Jobs & Entrepreneurship

Education, Work

C. Systems that focus on human governance

11. City & Security

Cites, Public Safety, Infrastructure

12. State/Region & Development

13. Nation & Rights

Government, Stimulus


NAE’s Engineering Grand Challenges: Smarter SystemsA. Systems that focus on flow of things humans need

1. Transportation & Supply Chain

Restore and enhance urban infrastructure


Provide access to clear water

3. Food & Products

Manager nitrogen cycle


Make solar energy economical

Provide energy from fusion

Develop carbon sequestration methods


Enhance virtual reality

Secure cyberspace

Reverse engineer the brain

B. Systems that focus on human activity & development6. Buildings & Construction (smart spaces)

Restore and enhance urban infrastructure


Enhance virtual reality



Advance health informatics

Engineer better medicines

Reverse engineer the brain


Advance personalized learning

Engineer the tools of scientific discovery

C. Systems that focus on human governance11. City & Security

Restore and improve urban infrastructure

Secure cyberspace

Prevent nuclear terror


13. Nation & Rights


Nations’ Grand Challenge: Quality of Life (how to define?)Smarter Systems = (Quality of Service & Jobs) + Returns + Security + Sustainability

A. Systems that focus on flow of things humans need1. Transportation & Supply Chain


Climate and geography

3. Food & Products



Material well being

B. Systems that focus on human activity & development6. Buildings & Construction (smart spaces)

Material well-being


Material well-being


Material well-being


Health & Family Life


Job security

Gender equality

C. Systems that focus on human governance11. City & Security

Community Life

Political stability and security


Climate and geography

13. Nation & Rights

Political freedom

Gender equality

Political stability and security


A. Flow of things1. Transportation: Traffic congestion; accidents and injury

2. Water: Access to clean water; waste disposal costs

3. Food: Safety of food supply; toxins in toys, products, etc.

4. Energy: Energy shortage, pollution

5. Information: Equitable access to info and comm resourcesB. Human activity & development

6. Buildings: Inefficient buildings, environmental stress (noise, etc.)

7. Retail: Access to recreational resources

8. Banking: Boom and bust business cycles, investment bubbles

9. Healthcare: Pandemic threats; cost of healthcare

10. Education: High school drop out rate; cost of educationC. Governing

11. Cities: Security and tax burden

12. States: Infrastructure maintenance and tax burden

13. Nations: Justice system overburdened and tax burden

Cities: System of Systems (Mini-Nations)


Universities: System of Systems (Mini-Cities)

A. Flow of things1. Transportation: Traffic congestion; parking shortages.

2. Water: Access costs; reduce waste

3. Food: Safety; reduce waste.

4. Energy: Access costs; reduce waste

5. Information: Cost of keeping up best practices.B. Human activity & development

6. Buildings: Housing shortages; Inefficient buildings

7. Retail: Access and boundaries. Marketing.

8. Banking: Endowment growth; Cost controls

9. Healthcare: Pandemic threat. Operations.

10. Education: Cost of keeping up best practices..C. Governing

11. Cities: Town & gown relationship.

12. States: Development partnerships..

13. Nations: Compliance and alignment.


A Vital Partnership: Cities and universities

Citizens are demanding more urban servicesLarson & Odonoi (MIT) Urban Operations Research.

Citizens are demanding more urban services, by type, quantity, and quality. Yet the ability of most cities in the United States and elsewhere to pay for additional services has been severely strained… For our purposes, a decision is an irrevocable allocation of resources. Thus, this book will deal with the allocation or deployment of the resources of urban service systems, including personnel, equipment, and various service-improving technologies. From this viewpoint, urban operations research can be thought of as a decision-aiding technology, one to assist urban managers in improving the deployment of their resources. Most deployments occur spatially throughout the city, so much of our work will have a strong spatial component.

Higher education can respondUrban Serving University Coalition (USU) A Vital Partnership: Great Cities, Great Universities

Higher education can respond to the challenges facing our cities and metropolitan regions, becoming the R&D partners of cities that evaluate and deploy potential innovations. Never before has this agenda had greater urgency for our nation. For example, demographic changes within the United States have been dramatic, with nearly eight in ten Americans now living in cities. According to the Brookings Institution, while the top 100 metropolitan areas make up only 12% of the land mass, they produce fully 75% of the gross domestic product, generate 78% of competitive patents, and account for 68% of the nation’s jobs. Increasingly, the prosperity of our cities and metro areas is inextricably linked to our national prosperity.

Demographic projection: By 2050 over 70% of the world’s population will live in cities

13

Universities Evolving Urban Innovation Centers

University sub-systemsDisciplines in Schools (circles)Innovation Centers (squares)

E.g., CMU Website (2009)“Research Centers:where it all happens – to solve real-world problems”

Disciplines in SchoolsAward degreesSingle-discipline focusResearch discipline problems

Innovation Centers (ICs)Industry/government sponsorsMulti-disciplinary teamsResearch real-world systems

D

D

D

D

D

D

Engine

ering

Schoo

l

Social

Scie

nces

,

Human

ities

BusinessSchool

Sciences & Math

water & waste transportation

health energy/grid

e-government

I-School

Design

Professional

Studies

food & supply chain

14

“Act Local”: Connect to Home City

UNIVERSITIES:THE INNOVATION CENTERS OF GREAT CITIES

CITIES:THE LIVING LABS FOR UNIVERSITIES

IBM UPConnect

UniversitiesTo Their

Cities

let’s work towards smarter citieslet’s start with smarter education

15

“Think Global”: Connect to Sister CitiesWorld as System of SystemsWorld (light blue - largest)Nations (green - large)Regions (dark blue - medium)Cities (yellow - small)Universities (red - smallest)

Cities as System of Systems-Transportation & Supply Chain-Water & Waste Recycling-Food & Products ((Nano)-Energy & Electricity-Information/ICT & Cloud (Info)-Buildings & Construction-Retail & Hospitality/Media & Entertainment-Banking & Finance-Healthcare & Family (Bio)-Education & Professions (Cogno)-Government (City, State, Nation)

Nations: Innovation Opportunities- GDP/Capita (level and growth rate)- Energy/Capita (fossil and renewable)

Developed MarketNations

(> $20K GDP/Capita)

Emerging MarketNations

(< $20K GDP/Capita)

IBM UP: Tandem Awards: Increasing university linkages (knowledge exchange interactions)


IBM University Programs (IBM UP): 2010 Focus “30 cities”


IBM University Programs (IBM UP): 2010 Focus “5 R’s”

1. ResearchAwards that connect university and IBM researchers/professionals to work on grand challenges

https://www.ibm.com/developerworks/university/research/index.html

2. ReadinessAccess to IBM tools, methods, and course materials to develop skills

https://www.ibm.com/developerworks/university/academicinitiative/

3. RecruitingJobs on global teams working to build a smarter planet - nation by nation, system by system

http://www.ibm.com/jobs

4. RevenuePublic-private partnerships that build great universities, great cities, and improve quality of life

http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html

5. ResponsibilityIBM employees share their expertise, time, and resources with universities in community service

http://www.ibm.com/ibm/ibmgives/


IBM University Programs (IBM UP): 2010 Focus “6 Priorities”

1. Smarter Cities (A Vital Partnership: Great Cities & Great Universities)A. Holistic Modeling & Analytics, B. STEM Education Pipeline, C. Jobs & Entrepreneurship

Establish Urban Sustainability and Innovation Centers (start with http://cityforward.org)

2. Cloud ComputingIBM Cloud Academy, IBM Academic Cloud, Massive Analytics

3. Ecosystem AlignmentInternal and external coordination and collaborations (win-win relationships)

4. IBM on CampusIBM Centers for Advanced Study, IBM Innovation Centers, IBM Research Collaboratories

5. Growth MarketsEnablement, Twin Cities, Sister Cities

6. Awards ProgramsShared University Research, Open Collaborative Research, Faculty Awards, PhD Fellowships


Priority 1: Urban Sustainability & Innovation Centers at Universities

A. Holistic Modeling & Analytics (Urban Service Systems)Modeling and simulating cities will push state-of-the-art capabilities for planning

interventions in complex system of systems

Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system

Real-world data and advanced analytic tools are increasingly availableB. STEM Education Pipeline (Science Tech Engineering Math)

City simulation and intervention planning tools can engage high school students and build STEM skills

Role-playing games can prepare students for real-world projectsC. Entrepreneurship & Job Creation

City modeling and intervention planning tools can engage university students and build entrepreneurial skills

Grand challenge competitions can lead to new enterprises

Note: Universities are mini-cities within cities (building blocks to get right).


A. Holistic Modeling & AnalyticsExample: FIU’s Terrafly


B. K-12 STEM Education Pipeline

“Imagine a better system, and use STEM language to explain why it is better”STEM = Science, Technology, Engineering, and MathematicsSee NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635

See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning

Challenge-based Project to Design Improved Systems

– K - Transportation & Supply Chain

– 1 - Water & Waste Recycling

– 2 - Food & Products (Nano)

– 3 - Energy & Electric Grid

– 4 – Information/ICT & Cloud (Info)

– 5 - Buildings & Construction

– 6 – Retail & Hospitality/Media & Entertainment (tourism)

– 7 – Banking & Finance/Business & Consulting

– 8 – Healthcare & Family Life (Bio)

– 9 - Education & Work Life/Jobs & Entrepreneurship (Cogno)

– 10 – City (Government)

– 11 – State/Region (Government)

– 12 – Nation (Government)

– Higher Ed – T-shaped teamwork, deep & broad education

– Professional Life – T-shaped teamwork, series of projects

Systemsthat focus onGoverning

Systemsthat focus on

Human Activities andDevelopment

Systemsthat focus onFlow of things


C. Entrepreneurship & Job Creation

1. Model Systems

2. Connect/capture Data

3. Analyze, Improve

4. Optimize, Automate

5. Discipline Specialists

•Transportation

•Water and waste

•Energy and electricity

•Buildings

•Healthcare/Education

•Cities/Government

General

Methods

& Techniques

Specific

Technologies

Run Transform Innovate

Specific

Systems

1. Synapsense, SensorTronics

2. Infosphere Streams, ILOG, COGNOS, SPSS

3. WS, Tivoli, Rational, DB2, etc.

4. BAO, Green Sigma

Cross Industry

Competencies

Industry Specific

Competencies

Jobs

Systems Engineering/Analytics/BAO/SSME

Research

to improve systems

fuels

Specialists

Consultant

Project Manager

Sales Architect

Operations


IBM Jobs: Project teams focus on customer needs

1. Consultant(trusted advisor to customer)

- a value proposition to addressproblems or opportunities and

enhance value co-creationrelationships

2. Sales- a signed contract that

defines work, outcomes, solution,rewards and risks

for all parties

4. Project Manager(often with co-PM from customer side)

a detailed project plan thatbalances time, costs, skills availability,

and other resources, as well asadaptive realization of plan

3. Architect(systems engineer, IT & enterprise architect)

-An elegant solution design that satisfiesfunctional and non-functional

constraints across thesystem life-cycle

5. Specialists(systems engineer, Research, engineer,

Industry specialist, application, technician, data, analyst, professional, agent)

-a compelling working system(leading-edge prototype systems

from Research)

~10%

~10% ~5%

~5%

~45%

6. Enterprise OperationsAdministrative Services, Other, Marketing & Communications

Finance, Supply Chain, Manufacturing, Human Resources, Legal,

General Executive Management

~25%

IBM Employees1. ~10% Consultant2. ~10% Sales3. ~5% Architect4. ~5% Project Manager5. ~45% Specialists6. ~25% Enterprise Operations

Project Work:90% B2B – Business to Business10% B2G – Business to Government(i.e., “Smarter Planet” projects)

© 2009 IBM CorporationGlobal University Programs24

The Big Trend: “The future is service1”

-1000K -10K -100 -1 +100

HunterGatherer(physical)

Agriculture(physical)

Manufacturing(physical)

Service(social)

Human Labor

100%

Time (years)

Physical: mostly interact

with things

Social: mostly interact with others

Service2 growth asIT-enableddivision of labor

Service1 growth asintangible outputs

© 2009 IBM CorporationGlobal University Programs25

The Big Trend: “The future is service2”

More population (people & organizations) creates opportunity for specialization – Specialization (division of labor – Adam Smith) can improve productive capacity

More specialization (outsourcing) creates need for coordination mechanisms– Local interactions become distributed across space, time, and scale (transaction costs – Coase)– Local optimization may not lead to global performance improvements

More coordination (IT can lower costs) creates service growth (value-cocreation)– IT integrates across space, time, and scale improving global and local performance– Increase the ratio of productive interactions to unproductive interactions with others

Service Growth (Value-Cocreation)increase mutually beneficial interactionsdecrease unproductive interactionsT-shaped people to lower coordination costs

Population (People & Organizations)entities interacting

Specialization (Outsourcing)space, time, scale distribution

Coordination (Information Technology)space, time, scale integration

Service2 growth asIT-enableddivision of labor


T-Shaped Professionals: Ready for T-eamwork!

Many disciplines(understanding & communications)

Many systems(understanding & communications)

Deep in one discipline

(an

alytic th

inkin

g &

pro

ble

m so

lving

)

Deep in one system

(an

alytic th

inkin

g &

pro

ble

m so

lving

)

Many team-oriented service projects completed(resume: outcomes, accomplishments & awards)

SSMED = Service Science, Management, Engineering & Design


Service Science: Transdisciplinary System-of-Systems FrameworkSystems that focus on flows of things Systems that governSystems that support people’s activities

transportation & supply chain water &

waste

food &products

energy & electricity

building & construction

healthcare& family

retail &hospitality banking

& finance

ICT &cloud

education &work

citysecure

statescale

nationlaws

social sciences

behavioral sciences

management sciences

political sciences

learning sciences

cognitive sciences

system sciences

information sciences

organization sciences

decision sciences

run professions

transform professions

innovate professions

e.g., econ & law

e.g., marketing

e.g., operations

e.g., public policy

e.g., game theory and strategy

e.g., psychology

e.g., industrial eng.

e.g., computer sci

e.g., knowledge mgmt

e.g., statistics

e.g., knowledge worker

e.g., consultant

e.g., entrepreneur

stake

holders Customer

Provider

Authority

Competitors

resources

People

Technology

Information

Organizations

change History

(Data Analytics)

Future(Roadmap)

value

Run

Transform(Copy)

Innovate(Invent)

Stakeholders (As Is)

Resources (As Is)

Change (Has Been & Might Become)

Value (To Be – Investment Opportunities)


Smarter = Sustainable Innovation (reduce waste, expand capabilities)

Computational System

Building Smarter TechnologiesRequires investment roadmap

Service Systems: Stakeholders & Resources

1. People 2. Technology3. Shared Information4. Organizations

connected by win-win value propositions

Building Smarter Universities & CitiesRequires investment roadmap


Thank-you! And…

let’s focus smarter education on… …sustainable innovations for smarter cities

…helping to build a smarter planet

instrumented+interconnected+intelligent(http://www.ibm.com/think)

“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org

“Cities learning from cities learning from cities.” – Fundacion Metropoli“Think global, act local.” – Geddes

“The future is born in universities.” – Kurilov“The best way to predict the future is to build it.” – Kay

“The future is already here. It is just not evenly distributed.” – Gibbons“Real-world problems do not respect discipline boundaries.” – Popper

“Today’s problems come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells

30

http://www.ibm.com/think

Dr. James (“Jim”) C. Spohrer Director of IBM University Programs (IBM UP) since 2009, Jim founded IBM's first Service Research group in 2003 at the Almaden Research Center with a focus on STEM (Science Technology Engineering and Math) for Service Sector innovations. He led this group to attain ten times return on investment with four IBM outstanding and eleven accomplishment awards over seven years. Working with service research pioneers from many academic disciplines, Jim advocates for Service Science, Management, Engineering, and Design (SSMED) as an integrative extended-STEM framework for global competency development, economic growth, and advancement of science. In 2000, Jim became the founding CTO of IBM’s first Venture Capital Relations group in Silicon Valley. In the mid 1990’s, he lead Apple Computer’s Learning Technologies group, where he was awarded DEST (Distinguished Engineer Scientist and Technologist) Jim received a Ph.D. in Computer Science/Artificial Intelligence from Yale University and a B.S. in Physics from MIT.

IBM University Programs (IBM) Gibbons said “The future is already here. It's just not very evenly distributed.". What if walking onto a university campus was like walking into the future. In a way it is, because the students at universities will someday fill roles in business and society – they are the future doers in all systems. Also, some of the important ideas from university research centers will someday become commonplace. More and more universities, especially urban serving research universities, are like living labs for the cities that host them. Universities are in fact small cities within larger cities. Many universities today have more students than the populations of some cities in past centuries, and the students have much better technologies for sharing and building knowledge.

There is more and more demand for Science Technology Engineering and Math (STEM) driven service innovations that can continuously improve the reliability of complex systems that serve customers in modern societies (UK Royal Society "Hidden Wealth: Science in Service Innovations" report, July 2009). Service innovations that improve reliability should also improve (a) the quality of service as judged by customers, (b) the productivity of provisioning service as judged by providers, and (c) the compliance as judged by regulatory or governing authorities as well as society as a whole. Furthermore, service innovations are what keep business systems competitive in a dynamic world characterized by globalization, driven in part by business model and technological change. Therefore, service innovations need to be sustainable innovations, both from an environmental perspective as well as an investment roadmap perspective that leads to continuous opportunities for individuals, businesses, and institutions.

Service science is a global initiative to improve service system innovation tools and methods. Service science may someday lead to a Moore’s Law for service system improvement. This will require a Computer-Aided Design (CAD) tool that can be used by T-shaped professionals to plan and implement more service innovation projects. Improved service systems that continuously improve locally and globally can help achieve the vision of a Smarter Planet.


Evolving Service2: Specializations, Technologies, and Rules

Show Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html

32

Most Wanted: A CAD for service systems(CAD = Computer Aided Design Tool)

CBM: Component Business Model

WBM and RUP: Work Practices & Processes

SOA: Technical Service-Oriented Architecture

Key Performance Indicators (KPIs)IBM IBV: Component Business ModelsIEEE Computer, Jan 2007

33

How many entities to study? ~10B service systems - modular value creation systems

• Nations (~100)– Regions (~1000)

• Cities (~10,000)– Educational Institutions

(~100,000)– Healthcare Institutions

(~100,000)– Other Enterprises

(~10,000,000)» Largest 2000» >50% GDP WW

– Families (~1B)– Persons (~10B)

• Balance/Improve– Quality of Life

• GDP/Capita– Quality of Service

» Customer Experience

– Quality of Jobs

– Sustainability• GDP/Energy-Unit

– % Fossil– % Renewable

Nation

Region(e.g., State) City

EducationalInstitution

HealthcareInstitution

OtherEnterprises(job roles)

Family(customers)

Person(providers)

34

How entities (service systems) learn and change over timeHistory and future of Run-Transform-Innovate investment choices

• Diverse Types– Persons (Individuals)

• Families– Regional Entities

• Universities• Hospitals• Cities• States/Provinces• Nations

– Other Enterprises• Businesses• Non-profits

• Learning & Change– Run = use existing

knowledge or standard practices (use)

– Transform = adopt a new best practice (copy)

– Innovate = create a new best practice (invent)

Transform

Innovate

Invest in each Invest in each type of changetype of change

Run

March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.

exploitexplore

35

How entities (service systems) interactIncentives & Rules

Ecology(Populations & Diversity)

Entities(Service Systems)

Interactions(Service Networks)

Outcomes(Value Changes)

Value Proposition Based Interactions (Incentives)

Governance Mechanism Based Interactions (Rules)

Access Rights(Relationships)

Measures(Rankings of Entities)

Resources(Roles in Processes)

Stakeholders(Perspectives)

win-win

lose-lose win-lose

lose-win

Identity(Aspirations/Lifecycle)

Reputation(Opportunities/Variety)

Resources: People, Technology, Information, OrganizationsStakeholders: Customers, Providers, Authorities, CompetitorsMeasures: Quality, Productivity, Compliance, Sustainable InnovationAccess Rights: Own, Lease, Shared, Privileged


Reports: 3 Nations

UK Royal Society Germany MARS US ASU CSL

37

• Fitzsimmons & Fitzsimmons– Graduate Students– Schools of Engineering

• Teboul– Undergraduates– Schools of Business– Busy execs (4 hour read)

• Ricketts– Practitioners– Manufacturers In Transition

• And 200 other 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.

Reaching the Goal: How Managers Improve

a Services Business Using Goldratt’s

Theory of ConstraintsBy John Ricketts, IBM

Service Management:Operations, Strategy,

and Information Technology

By Fitzsimmons and Fitzsimmons, UTexas

Service Is Front Stage:Positioning services for

value advantageBy James Teboul, INSEAD

Teaching…

For details: http://www.cob.sjsu.edu/ssme/refmenu.asp

http://www.diesel-ebooks.com/cgi-bin/item/0132359472/Reaching-the-Goal-How-Managers-Improve-a-Services-Business-Using-Goldratt%27s-Theory-of-Constraints-eBook.html

38

Teaching: IBM SSME Website: Creating T-shaped people

http://www.ibm.com/developerworks/spaces/ssme

39

Changing Nature of Jobs: Deep & Broad

-10

-5

0

5

10

15

1969 1974 1979 1984 1989 1994 1999

Levy, F, & Murnane, R. J. (2004). The New Division of Labor:How Computers Are Creating the Next Job Market. Princeton University Press.

Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT)

Expert Thinking(deep)

Complex Communication(broad)

Routine Manual

Non-routine Manual

Routine Cognitive

Increasing usage of job descriptive terms

40

A Service System Innovation Framework

“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.

Innovate (inside and outside) systems that create value

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Many definitions of service• Economics

– Service1 = economic activities that are not agriculture or manufacturing– Service3 = a transformation that one economic entity performs with the permission of a second entity, that

transforms the second entity or a possession of the second entity– Service4 = an exchange between economic entities that does not transfer ownership of a physical thing.

• Service Science– Service2 = value-cocreation phenomena, specifically a mutually beneficial outcome proposed,

agreed to, and realized by two or more service system entities interacting. Service system entities can be people, businesses, nations, and any other economic entities with legal rights, such as the ability to own property, enter into binding contracts, etc. Quantifiable measures associated with service system entity interactions over the life-time of the entity, include quality, productivity, compliance, and sustainable innovation measures. Service system entities configure four types of resources, accessible by four types of access rights, and reason about four types of stakeholders when designing value-cocreation interactions, and evaluating them via their processes of valuing.

• Operations– Service5 = a production process that requires inputs from a customer entity

• Computer Science– Service6 = a modular capability that can be computationally accessed and composed with others

• Systems Engineering– Service7 = a system (with inputs, outputs, and capacity limits) which is interconnected with other systems

that may seek to access its capabilities to create benefits, and in which local optimization of the system interactions may not lead to global performance improvements

• Design and Psychology– Service8 = an experience of a customer entity that results from that entity interacting with a provider entities

offering• Marketing

– Service9 = the application of competence for the benefit of another entity– Service10 = a customer-provider interaction that creates mutual benefits

© 2010 IBM CorporationIBM UP (University Programs) 1 Urban Systems and Service Innovation: Cities...

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