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Service Science: A New Expertise for Managing Sociotechnical Systems Michael E. Gorman and Jim Spohrer Introduction There are three main characteristics of services (Davis and Berdrow 2008): 1. Services are actions rather than goods; 2. Customers are involved in the production of value; 3. When the customer relationship ends, so does the value, unless lessons are captured from the experience for the next service exchange. Service systems, including government, health care, education, retail, and professional consulting, are the fastest growing sector of the global economy—especially information and business services (Spohrer et al. 2007). The service component of the major industrialized economies is greater than 50 percent and growing, and developing nations are close behind (Paulson 2006). Services comprised 80 percent of U.S. economic activity as of 2003 (National Academy of Engineering 2003, 8). What is true of the overall economy is also true of the businesses that make up the economy. Companies such as GE and IBM, which initially focused on manufacturing, now realize more than 50 percent of their revenues from service activities. This trend illustrates the growing market for figuring out what a subset of clients need and creating highvalue , custom solutions. Governments, businesses, and individuals all need help managing complexity in a time of accelerating technological change (IfM and IBM 2007). These conditions create the need for a new kind of expertise in service sciences, management, and engineering (SSME) (Chesbrough 2004; Chesbrough and Spohrer 2006). A good working definition of “service” is the co-creation of value via client-provider interactions. Note the emphasis on the collaboration between provider and client. Service systems are sociotechnical networks: human beings, technologies, and organizations are closely coupled (Elzen and Enserink 1996). A service actor, whether client 5 76 Michael E. Gorman and Jim Spohrer or provider, may be an individual (person), machine (owned by a person or business), business, organization, or other service system. The service actor is therefore part of a dynamic network of both human and nonhuman participants. Human actors differ from nonhuman participants in their ability to reflect and make choices (North 2005). If the object of the service is a person or organization, the service may achieve an immediate goal of that actor or ensure future achievement (“a promise”), instill a new goal in the actor, transform a capability of the actor, or instill a new capability in the actor. Thus, service interactions typically transform some state or attribute of the client actor. The provider may also be transformed by the process. Mutual benefit or value is co-created via relationships that share work, risk, information , assets, and/or decision making. Often, service providers have unique or specialized knowledge that allows them to perform the service better, faster, and cheaper than the client could possibly do it on their own. As demand for such “asymmetric knowledge” services grow, businesses may embody the knowledge in special tools or organizations to achieve scale efficiencies. Ultimately, if the tools become easy enough to use, the provider may make the tools available to the clients, resulting in eService or self-service systems. Consider, for example, the way in which the Lego toy company lets its customers propose new designs and share them for modification by other users, creating a kind of open source design environment ( Lego engineers then implement the designs. Here customers provide the designs, within familiar constraints—the customers have built Lego models, and thus know what is and isn’t possible. The coevolution is in the collaboration between users and designers, and the IT needed to facilitate it. After playing a key role in founding computer science, IBM now believes that there is a need for a new kind of expertise in SSME, where the engineering component would include design as well. Obviously, such a broad effort requires a multidisciplinary approach that spans academic silos. Interdisciplinary efforts can lead to generalists who eventually become specialists in a new field (Spohrer, McDavid, Maglio, and Cortada 2006). Something like this happened in computer science, which combined software and algorithm complexity theory, as well as hardware and logic design, into a new specialty that increases our understanding of computation in technological systems. Participants in a recent symposium (IfM and IBM 2007) from multiple disciplines and organizations concluded that “Service science has the potential to be as important as the foundation provided by physics, chemistry, biology, cognitive science and computer science for the modern world.”1 Other companies are picking up on A New Expertise...


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