1. Zaheer Travadi - IBM General Business Geo Expansion
Mar 03, 2012
2012 Towards Smater Services
Views presented here are individual and may not be endorsed by IBM
IIM -UDAIPUR 2012
3. Smarter Services
Why have Services become Predominant?
Need for trade
in services
Complexity
Specialization
Productivity
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4. Smarter Services
Economy has reached a New Era
A SMARTER PLANET
PEOPLE
INSTRUMENTED
COMPANIES, INSTITUTIONS, INDUSTRIES
INTERCONNECTED
MAN-MADE SYSTEMS
INTELLIGENT
NATURE’S SYSTEMS
Network Ubiquity
More than a billion Internet users today
Open Standards
Widely-adopted technical and transaction specifications
New Business Designs
Horizontally-integrated operations
+ +
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5. Smarter Services
The Nature of Innovation is Changing
Business Models Science
& &
Processes Technology
People
&
Culture
The marketplace requires innovation that combines
people, technology and business value
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6. Smarter Services
Enterprise Pressures & Opportunities
commoditization pressures CEOs: Extent of fundamental
change needed over next two years
new/increased competition
Moderate
global market opportunities
22%
adjacent market opportunities A lot
Little or no
65%
13%
global volatility & disruption
competing business models
IBM Global CEO Study 2006
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7. Smarter Services
It’s time to take advantage of…
smart objects
the connectedness of everything
supercomputing for everyone
information put to work
collaboration & co-creation
the marketplace for expertise
the virtual corporation
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8. Smarter Services
It’s time to innovate
CEOs’ View:
Primary Responsibility for
Innovation Leadership
products
services
27%
business processes No Owner 35%
CEOs/Leaders
business models
14%
Division
management and culture Mgrs 24%
Functional
Mgrs
policy and society
IBM Global CEO Study 2006
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9. Smarter Services
Agenda - 1
- Conversation Starter
1. 4Is – The 4 Is of Services
2. D4D
3. I2I
4. R=G; n=1
- TMTCu Ver.2
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10. Smarter Services
Goods Vs Services Innovation
All the smart people in our field, work We must collaborate with smart
for us people outside & inside
To profit from R&D we must discover, We need not originate research to
develop & distribute benefit
We have get to market first to win if Building better business model more
we innovate important than first to market
We must control our IP and clearly We can profit from others’ use of our
define our Firm’s boundaries IP and benefit from theirs
Learn by “using” & “doing” Learn continuously through
Feedback loops and client linkages
Consumer Insight Consumer Experience
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11. Smarter Services
Goods Vs Services Innovation
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15. Smarter Services
Service User Experience Design – Honeycomb Model
Courtesy: Semantic Studios
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17. Smarter Services
Democratization of Design
Increasingly capable & cheaper tools that require less skill and training to use
Make it easier for user-innovators to gain access to rich libraries of modifiable
components that have been placed in the public domain
– Today users design sophisticated new products, services, music and art
– Open source software movement
– Web 2.0 explicitly recognizes users add value
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18. Smarter Services
Agenda - 3
- Conversation Starter
1. 4Is
2. D4D
3. I2I – Idea to Implementation
4. R=G; n=1
- TMTCu Ver.2
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19. Smarter Services
Deciding on your Services Innovation
1. Check for Heuristic Affect – Has the team fallen in love with its proposal?
2. Check for Groupthink – How were the dissenting opinions in the team handled?
3. Check for Saliency Bias – could the diagnosis be overly influenced by an analogy?
4. Check for Confirmation Bias – Are credible alternatives proposed?
5. Check for Availability Bias – What if you had to make this decision later in time?
6. Check for Anchoring Bias – Do you know where the numbers came from?
7. Check for Halo Effect – Would a best practice replication be as successful?
8. Check for Sunk Cost Fallacy - Is the proposal based on a history of past decisions?
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20. Smarter Services
Typology of Services Innovation
Business model Process/system Asset
innovation: innovation: innovation:
Substantial Changes in how Introduction of
organizational information entirely new
changes in how exchanged between services as an Asset
revenues and profits customer and (service product)
are earned service provider
In reality all 3 are interrelated as an iterative process
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21. Smarter Services
Many efforts to transform services have often been hampered
Service Innovation Barriers
Getting alignment across organizations 73%
Obstacles to Improving Customer Experience
Implementing technology 60%
Trying to change employee behavior 57%
Defining our customer experience strategy 49%
Measuring customer experience 49%
Understanding the needs of our customers 38%
Designing usable interfaces for customers 35%
Gaining executive commitment 27%
Trying to change customer behavior 23%
Identifying our target customers 16%
None of the above 4%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Source: Forrester Research % of Respondents
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22. Smarter Services
Services Innovation Framework
“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.
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23. Smarter Services
“Outside In” - Most Successful Areas for Services Innovation
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24. Smarter Services
Approach to Services Innovation
Venture
Capitalists
ISVs Business
IT Analysts
Partners
Media Alumni
Legal University &
Academia
Organization Thought Leaders
Keystone
Clients
Community
Relationships
Investors
Country
Gov’t General
Standards
Programs Managers
Bodies
Multi-disciplinary
Globally Collaborative Open
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25. Smarter Services
Agenda - 4
- Conversation Starter
1. 4Is
2. D4D
3. I2I
4. R=G; n=1 – Business Model Innovation
- TMTCu Ver.2
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27. Smarter Services
Assessing current and desired positions to create path
Moving from current to target position
• Are there ways to reconfigure / re-
allocated sources of revenue in your
business?
Revenue Model • How can you sell elements of your
services / offerings differently?
• How can you leverage new / High • How can you reconfigure value
emerging business models in your elements in your business?
industries? From other industries?
• How does new/emerging technology
change the parameters?
• How can you select and leverage
• Are you a leader of follower when it unique assets & capabilities in your
comes to industry change? business that provide competitive
differentiation?
Low • What should you do vs where should
you partner for optimal value?
Current Position
Target Position
Industry Model Enterprise Model
Degree of Innovation Timing of Innovation BMI Path
• How does the degree of innovation relate • Do you drive change in the industry, or is • Which business model innovation paths
to your industry? How will it change in the it imposed on you? Lead vs follow? are we / should you explore?
future? • Which ones are most aligned with our
• What are the disruptive technologies or
• Do you have the right balance? models emerging today? industry, capabilities, vision?
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28. Smarter Services
n=1; R=G
Well established Social Vision
Consistent experience to all customers
Drive excellence through Lean business processes
Collaboration to co-create value
Resources = Global
create
Engineered
Engineered
Experience
Experience
workforce
Integrated
N=1
Open doors in to
Large Opportunities
Scalability Niche
Technology Architecture
Courtesy: CK Prahlad
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29. Smarter Services
Agenda
- Conversation Starter
1. 4Is
2. D4D
3. I2I
4. R=G; n=1
- TMTCu Ver.2 – Too Much To Confuse You!!
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30. Smarter Services
Where does Six Sigma fall short in Services Innovation
Six Sigma Thinking Customer-Experience Led Innovation
1. Introduce variability when it creates
1. Eliminate variability (reductive)
preference
2. Eliminate waste 2. Allow the customer to judge what is waste
3. Minimize cost 3. Tolerate additional cost as when it creates a
preference
4. Map processes 4. Map customer journeys
5. Test hypotheses 5. Explore important questions to create new
hypotheses
6. Rely on large numbers to create certainty
6. Rely on numbers to uncover new possibilities
7. Use process capability as final arbiter for 7. Use demonstrated customer behavior as the
decision making final arbiter
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31. Smarter Services
Are there “scale laws” of service innovation?
Moore’s Law underlies much of the information technology and business capability growth over the last half century.
Are there analogous “predictable capability doubling laws” that apply in the realm of services?
It seems three improvement or learning curve laws that might be applicable in services:
1. The more an activity is performed (time period doubling, demand doubling) the more opportunities there are to
improve the process
2. The better an activity can be measured (sensor deployment doubling, sensor precision doubling, relevant
measurement variables doubling) and modeled the more opportunities there are to improve the process
3. The more activities that depend on a common process (doubling potential demand points), the more likely
investment can be raised to improve the process
Example: Amazon’s Book Buying Recommendation Service Quality
–The quality of the recommendations depends on accurate statistics – the more purchases made, the better the statistical estimates
for recommendations
Example: Call Centers Query-Response Productivity and Quality
–The speed and quality of call center responses can be improved significantly given accurate statistics about the kinds and number
of queries that are likely to be received.
Example: New Service Offerings
–The viability of new service offerings often depends on the scale (amount of demand) in adjacent market segments where service
satisfaction is low enough to result in sufficient critical mass of defections to bootstrap the new offering.
Example: Predictable Education Gains (Student Knowledge, Teacher Satisfaction)
–If eLearning can be used to shift 20% of routine teacher activities into automation that can be covered in half the normal time,
freeing up 10% of teacher time each year to innovate and add new content or exploratory activities to the curriculum, then each year
students will be learning more and teachers will have time to try new things
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32. Andragogy from IBM
IBM Institute for Business Value
– http://www.ibm.com/iibv
IBM University
– http://www.ibm.com/university
IBM Services Science Management & Engineering
– http://www.ibm.com/university/ssme
IBM INNOV8 Game
– http://www-01.ibm.com/software/solutions/soa/innov8/full.html
IBM CityOne Game*
– http://www.ibm.com/software/solutions/soa/innov8/cityone/index.jsp
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33. Smarter Services
Thank you!
Zaheer N Travadi
IBM India General Business
Manager - Geo Expansion
Phone: 91-97404-00211
E-mail: zaheer.travadi@in.ibm.com
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