R Gary Bridge's the future of services #quis2013

R. Gary Bridge, PhD Copyright © 2013, G. Bridge. All Rights Reserved

The Future of Services Technology will create more and better services in more places at better prices… New winners and losers will emerge

What causes change…

Economy

Technology

Demographics

Copyright © 2013 , G. Bridge. All Rights Reserved

…the ways in which social groups provide themselves

with the material objects of their civilization

Technology matters…

Fire used to cook food

Source: www.bronze-age-reenactment.com/page3


Gut shrank

Image: www.nature.com/.../images/4441009a-f1.2.jpg

Source: A. Gibbons, Science, 2007; Gill et al 2006

1013 – 1014 organisms in gut. Microbiome has

100X more genes than human genome

(24,500 genes). “Thus, humans are

superorganisms whose metabolism

represents an amalgamation of microbial and

human attributes.” Gill et al , 2006


Source: Science, 2007 Image: Chloe Tam

Brain consumes 60% of baby’s energy

Brain Volume (and Energy required) grew…

Source: Cornelia Blink

TIM

E (M

illio

ns

of

Year

s A

go

)

Percent of Resting ENERGY Devoted To Brain

Adult at rest = 25%

2% body mass 1350 cc 1350 g

The Internet is changing our Brains now…

Memory for Content

Memory for Content

Memory for Location of Content

• How we use memory is changing, based on search costs

• Multi-task switching capabilities are growing

High Search Costs

Low Search Costs


World Population

Source: Combines data from two different -1000 to 1950 and 1950 to 2050 Census Bureau databases

Po

pu

latio

n (

Mill

ion

s)

Time

0

1000

2000

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10000 -1

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00

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30

19

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19

90

20

20

20

50

If population had followed the trend of the last 10,000 years…

1 B

World Population

Source: Combines data from two different -1000 to 1950 and 1950 to 2050 Census Bureau databases

Po

pu

latio

n (

Mill

ion

s)

Time

Actual Forecast

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000 -1

00

00

-50

00

-20

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-40

0

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90

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20

20

50

INDUSTRIAL

REVOLUTION

+ Source: World Bank Population Clock, July 2011

7 Billion 31 Oct. 2011

INFORMATION

AGE

The world’s information doubles every year…

Service innovation depends on information

World Storage Capacity (2007)

PC Hard Drives

DVD and Blu-ray

Digital Tape

Servers, Mainframes

Source: Hilbert and Lopez, Science, 2011

Analog

Storage

Optimally compressed MBs of Storage

2002, first time more digital information in world than analog… five years later, digital dominates knowledge

90% data that exists today was created in the last 2 years… Source: IBM, Big Data, 2013

World Communication Capacity Trends

http://www.martinhilbert.net/WorldInfoCapacity.html

10X

Internet Penetration (30 June 2012)

Source: www.internetworldstats.com/stats.htm, March 2011

No. America

Oceania/ANZ

Europe

Latin America

Middle East

Worldwide

Asia

Africa

http://www.internetworldstats.com/stats.htm

Priorities… if you could have only one,

what would you choose?

or


Priorities… if you could have only one,

what would you choose?

Global population about 6.88 B in 2011 Source of plumbing statistic: United Nations Human Development Report, 2006 Source Mobile phone penetration statistics: mobithinking.com, 2011

60%

4.3 Billion

77%

5.3 Billion

Fact:

Communication is more

important than convenient

and safe sanitation


Growing Productivity Raises Living Standards

Book Publishing Value Chain

$.06

Data Centers

Service Providers Networks

Store on Server

Download to Device

Consumer Electronics

Devices

Author creates

Publisher finds, edits

Print Books

Distribute Books

Retailer stocks,

sells

Customer

reads

Paper

Industry

Shipping

Industry

Real Estate

Industry

Author creates

Publisher finds, edits

Customer

reads


Amazon Sales: e-Books vs. Print Books

2007 2008 2009 2010 2011

Kindle e-Reader Introduced

e-Books outsell

Paperbacks

e-Books outsell Print

Books

3 ½ Months

42 Months


Market Transitions are underway in almost

every Industry… new winners and losers

News

Music Movies

Books TV

MEDIA

Pharma

Utilities

Autos

Service Providers

Healthcare

Public Sector

Retail

Airlines

Most

Stressed

Less

Stressed 1 2 3 5 6 7 8 9 10


Insurance

4

Manufacturing

Banking Education?

Technology-driven Service Trends

Automation of service tasks, including complex tasks

Delivery-at-a-distance -- remote services

Co-creation of value

1

2

3

Personalization – personal service, mass market prices 4

Context

• Location awareness • Needs / Tasks • Emotional State • Decision Style / Preferences • Health Status / Genetics • Social Network

Mobile Mobile and Wearable Platforms

Google glass Health Monitors

Technology-driven Service Trends

Automation of service tasks, including complex tasks

Technology drives all five Service trends

Personalization – personal service, mass market prices

Delivery-at-a-distance -- remote services

Co-creation of value

1

2

3

4

“Servicization” of product companies 5

Technology fosters Services Productivity and New Business Models… and disrupts Markets

RFID Chip Simple case: Identifying objects

Passport Baggage Tag Passive RFID Tag

Internet of Things (IoT) P

assiv

e R

FID

A

ctive

RF

ID

Responds with code when power applied

Carries own power source

and actively broadcasts code

Poker Chip

Reader

Hitachi RFID

.05 mm X .05 mm

2000 bytes

.05 X .05 mm

Managing Beverage Self-Service

Less labor required

Enforces meal plan entitlements automatically

Can capture Customer’s preferences…

Radio Frequency ID (RFID)

Disney World MagicBand+

Copyright © 2013, G. Bridge. All Rights Reserved

RFID Event Reader RFID badge

Room access

Package entitlements

Capture Customer data

Park access

Cashless payments

Reserve ride times

Personalized experiences

Personalized Experiences

Technology creates new, highly-valued services…

new revenue, higher margins from existing assets

Parents’

Input

Tracking visit

experiences

Guest Data

Internet of Things (IoT)

Sense physical parameters -- light, motion, chemicals, proximity, biometrics

Apply user-defined policy logic -- sampling, summarizing, reporting events

Communicate data over a network -- automatic meshing and routing

Sensors

Battery/

Power

Mote:MicrocontrollerStorageRadioClock

Enclosure


Self-Checkout App: Walmart Scan and Go

Scan items with

iPhone camera

Pay at Self-

checkout kiosk

Go!

Mobile

Payments No Credit Card

or Cash Needed

Source: WMT CFO Charles Holley, Reuters, 7 March 2013

Walmart saves $12 Million p/year for every second cut from mean checkout time.

Mobile ^

Bring your list

Progressive Insurance Personalization

1. Time of Day

2. Speed

3. VIN#

(No GPS)

1. Acceleration

2. Braking

3. Driving 12 AM–4 AM

4. Miles Driven

1. Fewer miles

2. Safest times 3. Smooth starts/stops

Install under steering wheel in OBD II port

Sense Calculate Reward

30 Days data collection Day 31, get 0 – 30% discount Return device at 6 months

Auto Industry earns more from Services

than from Manufacturing

VEHICLE = 100% car price, earns 1% margin

SERVICES = 22% car price, earn 10% margin

Net Profits Sales

69%

31%

18%

82%

Source: Cisco IBSG analysis

OEMs capture only 25% of these Service revenues

BMW’s Personnalisation Innovation

Build-to-order system, customized 6 days before production

Source: Cisco IBSG analysis

Innovation

Benefits

Solution

Higher customer satisfaction, reduced discounts, and reduced inventory costs

100% plant utilization rates

Operating margin at 8% vs. ~2% industry average

Flexible production, e.g. X5 SUV and Z4 Roadster on same line. Globally integrated production

Information Technology integrates the supply

chain, manufacturing and dealers

North

America

Japan

China

Europe

Other Asia

+ Australia

2012 Inventory Multipurpose Industrial Robots

1,235,600 Operational Units

2012: 1 Robot : 5,668 People 2014: 1 Robot : 3,111 People

2012: 1 Robot : 2,428 Workers 2014: 1 Robot : 1,342 Workers

Healthcare Robots today and tomorrow

Hospital robots deliver drugs and maintain accountability

By 2020, robot helpers will understand emotions and provide human-like service

Da Vinci Surgery System

• Less invasive

• More precise

• Faster recovery time

Surgeon’s

Expertise

Delivered at

a Distance

Remote Surgery is feasible…

When will the first

Remote Surgery

be performed on a

European patient?

Project Lindberg – 7 September 2001

Dr. Jacques Marescaux in New York performed

a cholecystectomy on a 68-year-old female

patient 6,230 km away in Strasbourg, France

How much do you trust technology?

1

Would you ride in a self-driving automobile

with no driver at the controls? YES

NO

2

Would you undergo robotic surgery with

a surgeon working a distance away? YES

NO

Would you ride on a train that had no operator

on-board – a train that was self-driving?

YES

NO

3

Would you fly in a plane that had no pilot

on-board – a plane operated by a pilot on

the ground?

YES

NO

4

Mobile phones and

Texting involved in

23% all US traffic

accidents

Source: National Safety Council, 2011

1,200,000 Mobile Phones

100,000 Texting

Google Self-driving Car

Martin Cooper, Motorola DynaTAC, 1973, first mobile phone call from NYC street

Care-at-a-Distance: HealthPresence

AMD 3700 Telephonic Stethoscope Welch Allyn Spot Vital Signs Lxi AMD 2015 ENT Scope AMD 2500 Examination Camera

Ingestible Sensors: Networked Pill

Proteus Ingestible

Sensor (“raisin”)

How do you assure

meds compliance in

high risk cases? Sends Report delivered to iPhone

Body water activates sensor, transmits electrical signal throughout body

Reader Detects

Med Levels, Med Type

1 2 3

Source: Proteus Biomedical

Med = Risperidone, anti-psychotic used to treat schizophrenia, bi-polar


Network Architecture: Med Monitoring

Home

Network

Data

Center

Contact

Center

Patient’s

Doctor

Patient’s

Choice

Internet

Provider

Payer


Servicization Case: Adobe

Creative Suite 6 Creative Cloud subscription service

Adobe shifts from packaged products

to subscription cloud service

$385 - $1184

Caterpillar Mining Equipment

Super Pit gold mine, Kalgoorlie, Western Australia is Australia's largest

open-pit mine

CAT 930X

Autonomous Load, Haul, Dump

One driver on networked site

Load: 345 Tons

Tires: $42,500 X 6


http://wapedia.mobi/en/Super_Pit_gold_mine

http://wapedia.mobi/en/Kalgoorlie,_Western_Australia

http://wapedia.mobi/en/Western_Australia

http://wapedia.mobi/en/Open-pit_mining



Traditional Supply Chain

Device breaks

at remote mine

Dealer ships

part to site

Replenishment

production

at factory

3-7 days

of lost work

3-7 days

shipping

Lost

Productivity


Networked Supply Chain

Sensors monitor

performance

Ops Center

predicts failure

and checks

inventory

Closest part is

shipped to site

proactively

Signals new

production

at factory

Inventory

Replenished

Monitoring


Labor required to produce the

ith unit

Labor required to produce the

first unit

Cumulative units made

so far

The Learning Rate

Time Period Y = a X

-b

i .

i

Organizational Learning (Progress Curves)

Scale Matters


Healthcare Transportation

Manufacturing Pharma Entertainment

Food Service Retail

Publishing

FS Insurance

Trends X Cases Matrix

Beverage Management

Disney Magic RFID

Walmart Mobile App

Insurance Claims Mgt.

Progressive Snapshot

BMW Configurator

Military robots

Healthcare robots

Robotic surgery

HealthPresence

Self-driving auto

Aviation, evolution of

Cancer genetic analysis

Proteus Biomed pill

Caterpillar supply chain

Personalization

Adobe Software

Automation Distance Servicization Co-creation

Innovation requires three successful steps

Very few organizations have all three capabilities

Invent

New

Concept

Adopt

Idea Execute

Innovation Involves Three Steps . . .


“Fumbling The Future”

1973 Xerox Alto I

Mouse pointing device

GUI

Touchpad

Ethernet

High Invention + Low Adoption = Failure


Questions About Your Decision Style

• What is your strength – your “natural

tendency?” Invention – create entirely new concepts and

ways of doing things

Adoption – find the best choice

Execution and scaling – make it happen

• What is your second best skill?

• How “fluent” are you in all three phases

of innovation?


Invent Adoption Execute

What Role for Service Researchers?

Most failures happen here

1. What skills does a successful Adoption leader need?

2. Which current discipline, if any, comes closest to these

requirements?

3. What training should Adoption leaders complete – who

should do it, and what curriculum should they follow?


Fundamental Adoption Tasks

Scanning Visioning Experimenting Protecting

Killing Bad Ideas

Evangelizing Segmenting & Targeting

Justifying

Searching for new ideas and ways of doing things

Painting a picture of what is possible

Perfecting the idea in demonstrations, prototypes, and lighthouse accounts

“Flying air cover” during development, before the idea is proven

Abandoning poor ideas (after fair testing)

Infecting others with passion for the idea

Locating best initial markets and lining up the “bowling pins” for expansion

Building a business case and competing for investment


1. Technology matters in the human journey…

2. The future promises:

• More and better quality Services

• in more places (often a distance from where created)

• Lower costs (so more people can participate)

3. But to create these future services, one must master

the three phases of practical Innovation

4. Service Researchers have an opportunity to improve

the Adoption phase of Innovation

Comments, corrections, amplifications?

Please contact:

60

[email protected]

R Gary Bridge's the future of services #quis2013

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