Chinese University of Hong Kong Visit 8/2/2011
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Transcript of Chinese University of Hong Kong Visit 8/2/2011
Dr. Stephen K. KwanProfessor, Service Science
Management Information SystemsCollege of Business AdministrationSan José State University, CA, USA
http://www.sjsu.edu/ssme
Contact: [email protected]
Prepared for Visitors from Chinese University of Hong Kong
August 2nd, 2011
Service Systems, Value Propositions,and Service Innovation
2Kwan 2010 2
42%6433 3 1.4Germany
37%261163 2.1Bangladesh
19%201070 1.6Nigeria
45%6728 5 2.2Japan
64%692110 2.4Russia
61%661420 3.0Brazil
34%391645 3.5Indonesia
23%7623 1 5.1U.S.
35%23176014.4India
142%29224925.7China
40yr Service
Growth
S
%
G
%
A
%
Labor
%
Nation
World’s Large Labor ForcesA = Agriculture, G = Goods, S = Service
20102010
The largest labor force migration in human history is underway, driven by global communications, business and technology growth, urbanization and
regional variations in labor and infrastructure costs and capabilities.
CIA Handbook, International Labor OrganizationNote: Pakistan, Vietnam, and Mexico now larger LF than Germany
US shift to service jobs
(A) Agriculture:Value from harvesting nature
(G) Goods:Value from making products
(S) Service:Value from enhancing the
capabilities of people and their ability to interconnect and co-create value
Changing nature of work - away from farms and factories…
Employment Change
Numeric change in wage-salary employment by industry sector, projected 2004-14(Thousands)
Professional and business service 4566
Healthcare and social assistance 4303
Kwan 2010
现代服务的创新
In its 11th Five-Year Plan, China had targeted an increase of the service sector’s output to 43.3% of GDP by 2010, up from 40.3% in 2005
Innovation in Modern Services
In its 12th Five-Year Plan, China had targeted an increase of the service sector’s value-added
output to 47.3% of GDP by 2015, up 4%.
4Kwan 2010http://www-03.ibm.com/press/us/en/attachment/25091.wss?fileId=ATTACH_FILE1&fileName=Podcast%20interview%20with%20SFSU.mp3
Skills for the 21st Century
5Kwan 2011
Some Definitions
Service Science is short for Service Science, Management, Engineering and Design (SSMED1).
Service Science is concerned with the study of Service Systems.cf. Computer Science is concerned with the study of Computer Systems.
Service Systems are man-made complex systems designed to improve the quality of life by co-creating value through value propositions among the stake-holders.
1 Spohrer, J., Kwan, S.K. “Service Science, Management, Engineering, and Design (SSMED): An Emerging Discipline – Outline and References”, International Journal of Information Systems in the Service Sector, 1(3), 2009.
6
“Service Science is just ___<name your discipline>____”
OR/IEMS
CS/AIMultiagent Systems
Economics & LawGame Theory
MIS Anthropology& Psychology
OrganizationTheory
A ServiceSystem is Complex
ServiceOperationsMarketing
ManagementQuality
Supply ChainHuman Factors
DesignInnovation
EngineeringSystems
ComputingEconomics
ArtsScience
InformationScience
(i-schools)
GeneralSystemsTheory
Service Science is a Big Tent(for every variety of disciplines)
ServiceExperience
ServiceProvider
Customer
A Service System and Its Entities
1Kwan, S. K. & Min, J. H. (2008) “An Evolutionary Framework of Service Systems”. Presented at the International Conference on Service Science, Beijing, China, April 17-18.
Service System Worldview1
7Kwan 2011
8
ServiceSystem A
ServiceSystem B
ServiceSystem C
ServiceSystem D
ServiceSystem E
ServiceSystem F
Service Interactions
8
A Service System Network
Kwan 2011
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ServiceSystem A
ServiceSystem B
ServiceSystem C
ServiceSystem D
ServiceSystem E
ServiceSystem F
Service Interactions
9
A Service Supply Chain
Kwan 2011
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Example: Purchases from Amazon.com
Kwan 2011
Amazon.comBookcloseout_us
nengland4
theBookGrinder
Customer
USPS
USPS
USPS
USPS
“transparent”service provider
Not being evaluated?
Example: Purchases from Amazon.com
Kwan 2011
12Kwan 2010
Example from Dan Pritchett
Example: Quality of Service Supply Chain
ServiceExperience
ServiceProvider
Customer
Society
Community
Competition
Partners
Service System
Employees &Stockholders
Service System Worldview
13Kwan 2011
ServiceExperience
ServiceProvider
Customer
Society
Community
Competition
Partners
Employees &Stockholders
Service System Worldview
14
MarketSegmentation
ServiceConceptRealized
CustomerFlow &ServiceDelivery
OperatingStrategy
FacilityLocation& Design
Capacity& Manpower
Planning,Training
CompetitiveStrategy
SocialNetworking
Kwan 2011
Service ManagementFitzsimmons & Fitzsimmons
ServiceExperience
ServiceProvider
Customer
Society
Community
Competition
Partners
Service System
Employees &Stockholders
Value
Value
Governance
Value
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Value
Value Co-Creation Through Value Propositions
Kwan 2011
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InformationTechnology
Platform
Service Provider’s Back Stage Support
BackStage
Processes
FrontStage
ProcessesFront Stage
Service Computing(e.g., SOA)
Service Systems, Computing, and IT Services1
1 Kwan, S. K. & Hefley, B., “Service Systems”, 2008.
ITSM – Management of the Processesand Infrastructure of IT Services
Kwan 2011
17Kwan 2011
From:
To:
Formulation of Value = Benefit / Cost
To:
Customer Value = (Results + Process Quality ) / (Price + Customer Access Costs)
Heskett et all 1997
Harvey 2005
Better Off
18
Customer
ServiceExperience
ServiceProvider
Stage 1: Value Chain
FocalRelationship
Value Proposition
Stages in Customer Empowermentin Value Co-Creation
5 Kwan, S. K. & Yuan, S. T. ”Customer-Driven Value Co-Creation in Service Networks”, to appear in Demirkan, H., Spohrer, J.C. and Krishna, V. ed., The Science of Service Systems, volume in Service Science: Research and Innovation (SSRI) in the Service Economy series, Springer, 2010.
Kwan 2011
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Stage 2: Traditional Service Value Network
Customer
ServiceExperience
ServiceProvider
Value Proposition
Provider PartnerNetwork
FocalRelationship
Value Proposition
Kwan 2011
cf. ICT-enabled service networks,mobile applications, etc.
20Kwan 2011
Service System/Network1. People 2. Technology3. Shared Information4. Organizations
connected by value propositions
Example of Service Value Network
from Jim Spohrer
Stage 3 – Improved Value Chain
Customer’sSocial
Network
Customer
ServiceExperience
ServiceProvider
Value Proposition
FocalRelationship
Value Proposition
Kwan 2011
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Product Placements
Ad’s and “Buy Me”
TV Programs
Their Friends
Target Audience
Example of Customer DrivenService Value Network
Illustration from: Vascellaro, J. A. “Video’s New Friends”, The Wall Street Journal, February 28, 2008.
Kwan 2011
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Taking Advantage of Social Networks
Kwan 2011
Stage 4: Customer Driven Service Value Network
Customer’sSocial
Network
Customer
ServiceExperience
ServiceProvider
Value Proposition
FocalRelationship
Value Proposition
Provider PartnerNetwork
Value Proposition
Kwan 2011
cf. “Resource Integrators” in Service Dominant Logic literature
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Stages of Customer Empowerment
12
34
Sta
keho
lder
s
Service Provider
Society
Community
Employees
Stockholders
Partners
Customers
A point in this 3-D space is a Potential Value
Proposition
Value Dimensions
Variety of Value Propositions
Econom
icE
nvironmental
Societal
SocialP
olitical
Hedonic
Kwan 2011
Intrinsic
Maslow’sHierarchyOf Needs
26Kwan 2011
Maslow’s Hierarchy of Needs
Disposable Income &Desire forServices
Needsvs.
Wants
27
Value Propositions can also be bi-directional
Service Provider
Society
Community
Employees
Stockholders
Partners
Customers
Ser
vice
Pro
vide
r
Soc
iety
Com
mun
ity
Em
ploy
ees
Sto
ckho
lder
s
Par
tner
s
Cus
tom
ers
?
Kwan 2011
Partners
Service Provider
Customers
28Kwan 2011
ServiceExperience
ServiceProvider
Customer
Value Proposition Model (VPM)Starting with the Service System
29Kwan 2011
ServiceExperience
ServiceProvider
Customer
ServiceExperience
Customer
ServiceExperience
Customer
Value Proposition
VPM – a common example
30Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Customer
A SharedExperience
Community/Social
Network
Value Proposition
VPM – individuals and community
31Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Customer
A SharedExperience
Community/Social
Network
Value Proposition
VPM – individuals and Facebook community
32Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
Value Proposition
ServiceExperience
Vendor
ValueProposition
ServiceExperience
VPM – service provider partners
33Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Vendor
ServiceExperience
ServiceExperience
VPM – partner’s acquistion of customer
34Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Vendor
ServiceExperience
Example 1 of 4
35Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Vendor
ServiceExperience
ServiceExperience
VendorService
Experience
Example 2 of 4
36Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Vendor
ServiceExperience
ServiceExperience
VendorService
Experience
Example 3 of 4
37Kwan 2011
ServiceExperience
ServiceProviderCustomer
ServiceExperience
Customer
ServiceExperience
Vendor
ServiceExperience
ServiceExperience
Example 4 of 4
38
Innovation
CREATINGSOMETHING
NEW
혁신創新创新革新
Innovation resides at the intersection of invention and insight, leading to the creation of social and economic value.
National Innovation Initiative
Innovation can happen anywhere on the Value Chain!
(business model, organization, environment, process, technology, etc.)
Kwan 2011
39Kwan 2011
Some Thoughts on Innovation
“Creativity can be taught. Innovation can be learned.”
David Blakeley, Director
“Incremental Innovation vs. Radical Innovation”
Judy Estrin“Closing the Innovation Gap”
Innovation in Modern Services现代服务的创新
40Kwan 2011
Levels of Service Innovation
Radical Innovations Major Innovation: new service that customers did not
know they needed. Start-up Business: new service for underserved market. New Services for the Market Presently Served: new
services to customers of an organization.Incremental Innovations
Service Line Extensions: augmentation of existing service line.
Service Improvements: changes in service delivery process.
Style Changes: modest visible changes in appearances.
Kwan 2011 41
For example, “The Ten Types of Innovation”by Larry Keeley, Doblin Inc.
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How the Service System Framework and VPM could complement the Foresight Method applied to Services
© Cockayne and Carleton
Kwan 2011
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How the Service System Framework could complement the Foresight Method applied to Services
© Cockayne and Carleton
Service SystemThinking
Business Models &Value Propositions
Kwan 2011
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Example of how the Service System Framework could complement an Innovation Method applied to Services
UML – Use Cases
Service Blueprint
Story Boards
UI Prototyping
BPMN
etc.
MANGA textbooks
Kwan 2011
45
Using the Foresight Method
Kwan 2011
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Sample Project from SJSU MBA Students
46Kwan 2011
47Kwan 2011
Teaching the method for “Service Made in ?country?”
48Kwan 2011
Service Summer 2010Karlsruhe, Germany
Dr. Stephen K. KwanProfessor, Service Science
Management Information SystemsCollege of Business AdministrationSan José State University, CA, USA
http://www.sjsu.edu/ssme
Contact: [email protected]
Service Systems, Value Propositions,and Service Innovation
End
Prepared for Visitors from Chinese University of Hong Kong
August 2nd, 2011