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The Clarion Call For Modern Services: China, Japan, Europe, and the U.S.

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  1. Introduction
  2. A Global Approach
  3. China
  4. Japan
  5. Europe
  6. References
  7. Authors

What will modern services be like? Today many services are viewed as a craft activity—individual doctors, retail sellers, programmers all doing useful things their own way. There is, however, an increasing role for an organized, analytic, and engineering approach to all these activities. Evidence-based medicine, marketing science- driven retailers, and software engineering are examples of these trends.

Automated services are a natural object of attention, since they can be observed in great detail, can be reconstructed and improved, and can be combined in new ways quickly and relatively easily. We are therefore seeing a rapid evolution toward an engineering approach to the life cycle of such services, and the application of mathematic and scientific approaches to the problems and opportunities they present. Complex service systems must be viewed at three levels: the functional attributes (what does it do and how does it do it?), nonfunctional attributes (management and control properties such as performance and security), and intentional attributes (what is the goal or purpose of the activity, such as societal benefit, private profit, or personal esteem?). Each level is susceptible to analysis, but different disciplines dominate. As computational services proliferate, new fields of study will open up, combining the computing, engineering, mathematical, management, and social sciences in creative ways.

When we look at complex B2B projects, there is a growing application of solution engineering—using the best available techniques to the multiple phases of the activity, managing the risks, increasing predictability of quality and schedule, learning from experience in a project to improve not only the results of that effort but of succeeding solutions. As we examine the stages of a single large business service project (including requirements, design, implementation, deployment, and ongoing operation), and build up portfolios and service lines, much of the work can be formalized and subjected to analysis and radical improvement through optimization, evolutionary learning, and organization improvement. Of course, applying engineering thinking to such projects is not new—without such we would not have fields with names like "civil engineering" or large facilities like airports and suspension bridges. But the confluence of information-dominated services, techniques of computer science, and increasing experience is rapidly opening up new possibilities for modern service.

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A Global Approach

Innovation is imperative to continued growth, increased productivity, and the general health of all economies. After a long history of contributions and breakthroughs to IT innovation, IBM Research is now directing resources toward innovation for the services industry:

Business Design and Implementation. How does one model, design, and instantiate optimal business functions? What tools and techniques are needed to create abstractions of an enterprise, to effect the transformation from strategy down to underlying IT systems, and to monitor the end-to-end process? The Component Business Model (CBM) is one approach under development. What is needed to build and deliver industry solutions in an efficient, reusable fashion?

Business Optimization and Management. How does one improve decision making and operations of ongoing business functions? How can business data be collected, analyzed, and exploited more optimally? How can business performance be enhanced as a result of the optimization of the underlying function, for example, supply chain? Given the importance of the work force in labor intensive services, how does one forecast, hire, allocate or shift resources to meet changing demand patterns?

Services Delivery. In IBM’s internal service delivery centers, what are the best ways to maintain desired service levels while increasing efficiency and productivity? What tools and techniques can guarantee end-to-end manageability and visibility throughout the entire services life cycle from request to delivery? Challenges include the globalization of service delivery, adoption of standardized best practices, automation, virtualization of resources including labor, and the appropriate integration of the human element.

Services Sciences Management and Engineering (SSME) applies to each of these areas [94]. IBM Research laboratories worldwide are engaging with local universities and governments on the topic of innovation in services, as described here.

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China

In the recently approved 11th five-year plan (2006–2010) by China authorities, "Promoting Modern Services Industry" has been given a significant position for the first time. This emphasis on services confirms China’s determination to expand beyond its "manufacturing center" position to a new economy with a services focus. China’s sustainable development in the coming five years will increasingly depend on two industries: Production-oriented services industries: Supply chain, logistics, financial services, and infrastructural support services in both business and IT, and consumer-oriented services industries: Retail, restaurant, hotel, real estate, and tourism plus new public services and community services focusing on quality of life.

Major universities in China have established collaborations with IBM’s China Research Laboratory (CRL) to define the roadmap and build the Modern Services Industry for China. Thinghua University and CRL are working to understand the current status of services talents in China, designing services science curriculum, and teaching the first graduate course: "Introduction to Services Science." Peking University and CRL are researching Solutions Engineering methods and tools. The second China SSME conference is also being planned. The conference will provide a platform for academic researchers and industry leaders to share experiences and findings. Topics include: SSME curriculum design, courseware, collaboration models, government roles in SSME, and SSME research projects in services modeling, analysis, services ecosystem, business design, IT, and radically simplified global services.

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Japan

Japan has been looking for new drivers to create the next stage of economic growth, building off a strong product-driven base established in the 20th century. The Japanese Cabinet, led by Prime Minister Junichiro Koizumi, adopted a 2006–2010 Policy on Science and Technology, which articulates the need for scientific approaches to realize innovation in services. This government policy was affected by several symposiums and special study groups, focusing on multidisciplinary approaches to service innovation.

The first SSME symposium in Japan, hosted by IBM Tokyo Research Laboratory in September 2005, explored a range of topics, including integration of industry-specific knowledge about complex business services and the body of scientific knowledge dealing with problem-solving and process improvement methods; existing Japanese education, which traditionally emphasizes manufacturing skill development and case studies, and should be revised to incorporate a services-oriented perspective; laws and regulations that inhibit the development of new business processes for services; and the need for scientific approaches to pricing services and measurement of customer satisfaction.

Following the SSME symposium, the Ministry of Economy, Trade and Industry (METI) formed a Services Innovation Study Group. The group proposed the formation of a Services Sciences Forum, aiming to develop service innovation leaders, explore relevant scientific disciplines, and promote collaboration. In March 2006, the Information Processing Society of Japan (IPSJ) established a Services Sciences Forum Web site. SSME-related education programs are gaining attention, including programs at Hitotsubashi University, Japan Advanced Institute of Science and Technology, and Tokyo University.

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Europe

The European Union (EU) is devoting more attention to services innovation, as evidenced in the EU Innovation Action Plan adopted in October 2005. The Community Research Framework Program 7 (FP7) is a multidisciplinary research program that will address the technical as well as the economic and social dimensions of services innovation. FP7 topics of relevance to services innovation include human capital, organizational change, education, trust, and security, ICT for networked businesses, and collaborative working environments. FP7 covers the period of 2007–2013 with a total budget of 48 billion Euros.

In 2005, the European Commission initiated the establishment of a European Technology Platform strongly focusing on services science. This industry-led Networked European Software and Services Initiative (NESSI) brings together major players in the European software and services sector and focuses on a strong collaboration with academia.

Productivity gains and economic growth from services innovation will also depend on a dynamic and open European market for services. In early 2006, the European Commission established an expert group for defining a strategy promoting innovative services in the European Internal Market. The goal is to achieve a legal and administrative framework, which allows for cross-border establishment and movement of services within the EU, ideally enabling enterprises to easily export innovative services business models beyond national borders.

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Authors

Stuart I. Feldman (sif@us.ibm.com) is the vice president of Computer Science Research at IBM T.J. Watson Research and president of ACM.

Krishna S. Nathan (KSN@zurich.ibm.com) is the vice president Services and the director of the Zurich Research Laboratory at IBM T.J. Watson Research.

Thomas Li (thomasli@cn.ibm.com) is the director of IBM China Research Laboratory.

Kazuyoshi Hidaka (khidaka@jp.ibm.com) is manager of Business Services Research, Tokyo Research Laboratory, IBM Japan.

Corinna Schulze (corinna_schulze@be.ibm.com) is a member of IBM's Government Programs team in EMEA (Europe, Middle East, and Africa).

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DOI

10.1145/1139922.1139956

July 2006 Issue

Published: July 1, 2006

Vol. 49 No. 7

Pages: 86-87

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