Competing in a service economy 20120913 v1
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Transcript of Competing in a service economy 20120913 v1
© 2012 IBM Corporation
IBM University Programs worldwide, accelerating regional development (IBM Upward)
Competing in a Service Economy
Dr. James (“Jim”) C. Spohrer, [email protected] Champion and Director IBM UPward(University Programs worldwide, accelerating regional development)
SwedBank Breakfast TalkThursday September 13, 2012
IBM SSME Centennial Icon of ProgressIBM Smarter Planet
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IBM Almaden Research Center, Silicon Valley/San Jose, CA
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Today’s Talk Growth of Service Economy
Leading Through Connections– IBM CEO Survey 2012
Smarter Planet– Connecting with Cities & Their Universities
– Regional Economic Development & QoL
People and Change– Beyond just one perspective
– Need T-shaped people (depth, breadth)
– Pi-shaped people (deep in two areas, breadth)
– M-shaped people (deep in three areas, breadth)
– ….
– True “trans-disciplinarians” – multiple perspectives
Nano-Bio-Info-Cogno
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Economic Shift in National Economies
Daryl Pereira/Sunnyvale/IBM@IBMUS,
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 ServiceGrowth
S%
G%
A %
Labor% WW
Nation
World’s Large Labor ForcesA = Agriculture, G = Goods, S = Service
20102010
NationMaster.com, 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
IT augmented workers in smarter systemsthat create benefits for customers
and sustainably improve quality of life.
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Growth of Service Revenue at IBM
SOFTWARE
SYSTEMS(AND FINANCING)
SERVICES
2010 Pretax Income Mix Revenue Growth by Segment
Services
Software
Systems
44%
17%
39%
IBM Annual Reports
What do IBM Service Professionals Do? Run IT & enterprise systems for customers,help Transform customer processes to best practices, and Innovate with customers.
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Sweden: Global Brands (0.1/1.25/2.2)
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United States: Global Brands (4.5/26/30)
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Regions
Communications
Distribution
Financial Services
Industrial
Public
Sectors
Outperformers
Peer Performers
Underperformers
Performance
1700+ face-to-face interviews
North America
Western Europe
Japan
Australia / New Zealand
Growth Markets
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2004 2006 2008 2010 2012
Socio-economic factors7 7
8 8
7
Environmental issues8 8
7 7
8
Geopolitical factors9 9 9 9 9
Globalization6
4
6
5
4
Regulatory concerns555
4
5
4 Macro-economic factors
3
66
3 Market factors3
1 11 1
2 People skills2 2
4
2
Technology factors
6
3 3
1
2
External forces impacting the organization
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Technology is driving organizational change more than ever before
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Partner for innovation, disrupt, and derive revenue from new sources
Differentiate through better data access, insight and translation into actions
Organizational openness introduces new opportunities to create value through employee collaboration
CEOs create economic value by cultivating connections within and across three domains
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Outperformers are twice as good at deriving value from data
54%
26%
Access to data
54%
26%
Insights from data
57%
31%
Translate into actions
108%more
108%more
84%more
Drawing insights from information
Underperformers
Outperformers
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Look outside to complete the view Connect pieces into profiles Empower staff with predictive analysis
Let “big data” reveal the customer you never knew
Listen at an individual level Capture what employees see and hear Respond with relevance and speed
Listen lavishly, respond with focus
Mobile “changes everything” Blend the physical and digital Offer value that stands out
Be where your customersexpect you to be
So, how do you win the race to gather andconvert data into customer insight and action?
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Example: Leading Through Connections with…Universities Collaborate with IBM Research to Design Watson for the Grand Challenge of Jeopardy !
Assisted in the development of the Open Advancement of Question-Answering Initiative (OAQA) architecture and methodology
Pioneered an online natural language question answering system called START, which provided the ability to answer questions with high precision using information from semi-structured and structured information repositories
Worked to extend the capabilities of Watson, with a focus on extensive common sense knowledge
Focused on large-scale information extraction, parsing, and knowledge inference technologies
Worked on a visualization component to visually explain to external audiences the massively parallel analytics skills it takes for the Watson computing system to break down a question and formulate a rapid and accurate response to rival a human brain
Provided technological advancement enabling a computing system to remember the full interaction, rather than treating every question like the first one - simulating a real dialogue
Explored advanced machine learning techniques along with rich text representations based on syntactic and semantic structures for the Watson’s optimization
Worked on information retrieval and text search technologies
http://w3.ibm.com/news/w3news/top_stories/2011/02/chq_watson_wrapup.html
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What does IBM do?
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Most people say, “IBM makes computers”
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What IBM really does is help build a Smarter Planet…Smarter = System of systems that work better togetherService = Applying knowledge to co-create value
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The need and opportunity exists…
Big Four Crises– Financial
– Healthcare
– Education
– Government
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Smarter Planet = Improve Quality-of-Life
INSTRUMENTED
We now have the ability to measure, sense and see the exact condition of practically everything.
INTERCONNECTED
People, systems and objects can communicate
and interact with each other in entirely new
ways.
INTELLIGENT
We can respond to changes quickly and accurately, and get better results
by predicting and optimizing
for future events.
WORKFORCE
PRODUCTS
SUPPLY CHAIN
COMMUNICATIONS
TRANSPORTATION BUILDINGS
IT NETWORKS
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California Human Development Report 2011:Measuring quality-of-life…. http://w
ww
.measureofam
erica.org/docs/AP
ortraitOfC
A.pdf
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What improves Quality-of-Life? Service System Innovations
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. 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 & 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
2/7/42/1/1
7/6/11/1/0
5/17/27
1/0/2
24/24/1
2/20/247/10/3
5/2/2
3/3/10/0/0
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)”
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T-shaped professionalsdepth & breadth
BREADTH
DE
PT
H
(analytic thinking & problem solving)
Many culturesMany disciplines
Many systems(understanding & communications)
Deep in one d
iscip
line
Deep in one sys
tem
Deep in one cu
lture
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Two Generations of Change: Past & Future
Born: 1988Graduated College: 2011
Born: 2012Enters College: 2030
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2030 Transportation: Self-driving cars
Steve Mahan:Test “Driver”
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2030 Water
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2030 Manufacturing
Ryan Chin:Urban Mobility
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2030 Energy
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2030 ICT
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2030 Buildings: Recycled to be stronger, safer, cleaner
China Broad Group:30 Stories in 15 Days
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2030 Retail & Hospitality
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2030 Finance & Business
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2030 Health
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2030 Education: Watch one, do one, teach one…
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2030 Government
Four measures
Innovativeness
Equity– Improve
weakestlink
Sustainability
Resiliency
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2030 and Beyond…. Government
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A Framework for Global Civil Society
Daniel Patrick Moynihan said nearly 50 years ago: "If you want to build a world class city, build a great university and wait 200 years." His insight is true today – except yesterday's 200 years has become twenty. More than ever, universities will generate and sustain the world’s idea capitals and, as vital creators, incubators, connectors, and channels of thought and understanding, they will provide a framework for global civil society.
– John Sexton, President NYU
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In Conclusion: Two Books To Help Us All Prepare To Change
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Thank-You! Questions?
Dr. James (“Jim”) C. SpohrerInnovation Champion & Director, IBM University Programs worldwide accelerating regional development (IBM UPward)[email protected]
“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“Universities are major employers in cities and key to urban sustainability.” – Coalition of USU
“Cities learning from cities learning from cities.” – Fundacion Metropoli“The future is already here… It is just not evenly distributed.” – Gibson
“The best way to predict the future is to create it/invent it.” – Moliere/Kay“Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer
“Today’s problems may come from yesterday’s solutions.” – Senge“History is a race between education and catastrophe.” – H.G. Wells
“The future is born in universities.” – Kurilov“Think global, act local.” – Geddes
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IBM operates in 170 countries around the globe
IBM has 426,000 employees worldwide
2011 Financials Revenue - $ 106.9B Net Income - $ 15.9B EPS - $ 13.44 Net Cash - $16.6B
22% of IBM’s revenue in Growth Market countries; growing at 11% in 2011
Number 1 in patent generation for 19 consecutive years ; 6,180 US patents awarded in 2011
More than 40% of IBM’s workforce conducts business away from an office
5 Nobel Laureates
9 time winner of the President’s National Medal of Technology & Innovation - latest award for Blue Gene Supercomputer
“Let’s Build a Smarter Planet"
The Smartest Machine On Earth
100 Years of Business & Innovation in 2011
IBM’s Leadership Changes
55% of IBM’s Workforce is New to the company in the last 5 years
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The New Normal: Smarter Systems
Computational System
Smarter TechnologyRequires investment roadmap
Service Systems: Stakeholders & Resources
1. People 2. Technology3. Shared Information4. Organizations
connected by win-win value propositions
Smarter Buildings, Universities, CitiesRequires investment roadmap
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University: Four Missions
Knowledge– 1. Transfer (Teaching)
– 2. Creation (Research)
– 3. Application (Benefits)
• Commerce/Entrepreneurship• Governance/Policymaking
– 4. Re-Integration (Challenge)
• Innovativeness, Equity• Sustainability, Resilience
Nested, Networked Holistic Service Systems– Flows
– Development
– Governance
Nation
State/Province
City/Metro
UniversityCollege
K-12
Cultural &ConferenceHotels
HospitalMedical
Research
Worker(professional)
Family(household)
For-profits
Non-profits
U-BEEJob Creator/Sustainer
Third Mission (Apply to Create Value) is about U-BEEs = University-Based
Entrepreneurial Ecosystems
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Regional Competitiveness and U-BEEs: Where imagined possible worlds become observable real worldshttp://www.service-science.info/archives/1056
Nation
State/Province
City/Region
UniversityCollege
K-12
Cultural &ConferenceHotels
HospitalMedical
Research
Worker(professional)
Family(household)
For-profits
Non-profits
U-BEEJob Creator/Sustainer
U-BEEs = University-Based Entrepreneurial Ecosystems, City Within City
“The future is already here (at universities),it is just not evenlydistributed.”
“The best way topredict the futureis to (inspire the nextgeneration of studentsto) build it better.”
InnovationsUniversities/RegionsCalculus (Cambridge/UK)Physics (Cambridge/UK)Computer Science (Columbia/NY)Microsoft (Harvard/WA)Yahoo (Stanford/CA)Google (Stanford/CA)Facebook (Harvard/CA)
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Cities: land-population-energy-carbon
Carlo Ratti:Senseable Cities
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Measuring Impact
SSME: IBM Icon of Progress & IBM Research Outstanding Accomplishment– Internal 10x return: CBM, IDG, SDM Pricing & Costing, BIW COBRA, SIMPLE, IoFT, Fringe, VCR
• Key was tools to model customers & IBM better• Also tools to shift routine physical, mental, interactional & identify synergistic new ventures• Alignment with Smarter Planet & Analytics (instrumented, interconnected, intelligent)• Alignment with Smarter Cities, Smarter Campus, Smarter Buildings (Holistic Service Systems)
– External: More than $1B in national investments in Service Innovation activities
– External: Increase conferences, journals, and publications
– External: Service Science SIGs in Professional Associations
– External: Course & Program Guidelines for T-shaped Professionals, 500+ institutions
– External: National Service Science Institutions, Books & Case Studies (Open Services Innovation)
Service Research, a Portfolio Approach– 1. Improve existing offerings (value propositions that can move the needle on KPI’s)
– 2. Create new offerings (for old and new customers)
– 3. Improve outcomes insourcing, outsourcing, acquisitions, divestitures (interconnect-fission-fusion)
– 4. For all three of the above, improve customer/partner capabilities (ratchet each other up)
– 5. For all four of the above, increase patents and service IP assets (some donated to open forums)
– 6. For all five of the above, increase publications and body-of-knowledge (professional associations)
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Who I am
Director IBM Global University Programs since 2009– Global team works with 5000 university world wide (http://www.ibm.com/university)
– Research (Awards), Readiness (Skills), Recruiting, Revenue, Responsibility
– Transform “IBM on Campus” brand awareness (“Smarter Planet/Smarter Cities”)
– Create “Urban Service System” Research Centers & U-BEEs Founding Director of IBM's first Service Research group from 2003-2009
– Almaden Research Center, San Jose, CA
– 10x ROI with four IBM outstanding and eleven accomplishment awards
– Improve existing offerings, create new, portfolio synergies, partners, patents, publications
– I know/work with service research pioneers from many academic disciplines• I advocate for Service Science, Management, Engineering, and Design (SSME+D)
– Short-term: Curriculum (T-shaped people, deep in an existing discipline)– Long-term: New transdiscipline and profession (awaiting CAD tool)
• I advocate for SRII (“one of the founding fathers”)• Co-editor of the “Handbook of Service Science” (Springer 2010)
Other background (late 90’s and before)– Founding CTO of IBM’s Venture Capital Relations group in Silicon Valley
– Apple Computer’s (Distinguished Engineer Scientist and Technologist) award (90’s)
– Ph.D. Computer Science/Artificial Intelligence from Yale University (80’s)
– B.S. in Physics from MIT (70’s)
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What is the future? We can imagine many possibilities…
Kurzweilai.net