Service Science Executive Education

For service science executive education, a case-study “crash course” approach is recommended:


Week 1: The Basics: Case Studies & Library
Day 1: IBM Case Study (B2B)
Day 2: Rolls-Royce Case Study (B2B)
Day 3: Five Short Case Studies (B2C)
Day 4: Survey More: Building Your Executive Education Library for Service Science
Day 5: Reflection: What’s Most Important to Sustain A Service Innovation Strategy?


Week 2: Working An Example: Your Business or City/State/Nation
Day 1: Introduction to Component Business Modeling of Industry And Societal Sectors
Day 2: CBM Models and KPIs
Day 3: Run-Transform-Innovate (Iterate-Imitate-Innovate) Portfolio Analysis
Day 4: Survey More: Applying CBM to Your Customers, Suppliers, Competitors, Regulators To Gain Strategic Insights
Day 5: Reflection: Governance & Sustainability of Service Innovation Strategy


Expanding Week 1:

(1) B2B Case: IBM Transformation to High Value Service & Software

Foley wrote: “When I asked how he measures the performance and effectiveness of IBM’s IT team, Hennessy pointed to its “run-to-transform” ratio. IBM’s IT department is divided into three groups: a “run” organization that’s responsible for keeping systems running smoothly; a “transform” team focused on business-process simplification and other business transformation; and an “innovate” unit that pursues leading-edge technology initiatives.  A few years ago, IBM was spending 73% of its IT budget on keeping systems and services running and 27% on innovation. This year, its run-to-transform ratio will hit 63%-37%. Roughly speaking, IBM is shifting an additional 2% of its IT budget from run to innovation each year, and Hennessy has every expectation that his group will continue moving the ratio in that direction. “I don’t see an end in sight,” he says. In fact, Hennessy says that IBM’s run-to-innovation ratio has improved more this year than last. “So it’s actually accelerating for us,” he says.”

(2) B2B Case: Rolls-Royce

(3) B2C Cases: Many examples in business-to-consumer space

(4) Many more case studies (sustaining the transformation) in these outstanding books for executives:

Chesbrough: Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era

Moore: Escape Velocity: Free Your Company’s Future from the Pull of the Past

Sanford: Let Go To Grow: Escaping the Commodity Trap

Anderson: Value Merchants: Demonstrating and Documenting Superior Value in Business Markets

Slywotzsky: How To Grow When Markets Don’t

Kim: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant

Rust: Driving Customer Equity : How Customer Lifetime Value is Reshaping Corporate Strategy

Womack: Lean Solutions: How Companies and Customers Can Create Value and Wealth Together

Cooper: Product Development For The Service Sector: Lessons From Market Leaders


(5) Finally, and this is most important, the service-transformation-strategy (to be sustainable) must include up-skilling employees of businesses and up-skilling citizens of nations year over year.   Future employees and citizens must have greater skills and competence year over year, or else the service transformation of a business or nations will not be sustainable.  Some good reads that suggest how to do this sustainably are:

Ricketts: Reaching The Goal: How Managers Improve a Services Business Using Goldratt’s Theory of Constraint
Improve-the-weakest-link and winner-take-all policy-incentives must be explicitly governed and balanced for sustainable success in service-led transformations of businesses and nations.

Spohrer: Three Frameworks For Service Research: Exploring Multilevel Governance in Nested, Networked Systems

McKinsey: Profits Per Employee

Barber: The Surprising Economics of a “People Business”

McKinsey: Help Wanted: The Future of Work in Advanced Economies

Murphy: T-shaped people and multiple systems and disciplines

At the end of the day, service innovation is about growing both the capabilities of the provider and the customer and all stakeholders.  Service innovation is most truly and fundamentally about co-elevation of capabilities of people, businesses, and nations – all the diverse nested, networked service system entities in the service ecology.



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  1. Introduction to Service Science Management and Engineering SSME

    Module 1: Welcome and Overview of Service Science, Management, and Engineering (SSME)

    ­­­­­­­­­­­­­­­­­­Supporting presentation: 1_SSMEoverview.ppt
    Table of Contents

    Module 1: Welcome and Overview of Service Science, Management, and Engineering (SSME) 1

    Table of Contents 1

    Acknowledgements 1

    Welcome 1

    Overview of Module Format 2

    Objectives 2

    Topic-specific content 2

    Summary 2

    Activities 2

    References and Additional Readings 2

    Overview Presentation Notes 3

    Slide 1: Introduction to SSME 3

    Slide 2: What is SSME? 3

    Slide 3: Why is SSME Important? 4

    Slide 4: Service Innovation 4

    Slide 5: Modules 5

    Slide 6: SSME Timeline – some history 6

    References 8

    Related web site links 8

    Services Engineering topics 9

    Services Design topics 9

    Industrialization of Services topics 9


    Many people from within and outside of IBM have (and continue to) contributed to the development of the SSME modules and academic initiative. The following list is a subset of key contributors to this effort.

    Jim Spohrer

    Paul Maglio

    Wendy Murphy

    Cheryl Kieliszewski

    Michael Maximilien

    Jakita Owensby

    Dean Spitzer

    Melissa Cefkin

    Matthew Berry

    Lisa Kreeger

    Toby Lehman

    Doug McDavid

    Sara Moulton-Reger

    David Singer

    Makoto Kano

    James Rhodes

    Sean Bell

    This group of informational modules is about Service Science, Management and Engineering (SSME) – a concept for a multidisciplinary educational foundation for undergraduates and graduates. Many variations of services education exist today within the domains of management, operations research, and economics to name a few. Most case studies and existing work has focused on business-to-consumer services. However, this set of modules is designed to not only understand business-to-consumer services, but also understand the complexities of business-to-business services. With respect to this focus on business-to-business services, a need is seen to explore and define the notion of truly multidisciplinary approach to educational offerings in the area of services. Of particular interest is the notion of the impact of technology, people, and process on how services are defined and delivered.

    The modules are intended for use by instructors where instructors can choose which module(s) might be used to enhance current courses and consider curriculum updates as time goes by. In this first iteration of the SSME modules, topics are provided as PowerPoint ™ slides and Word ™ documents with no restrictions. Instructors may download and customize these materials as needed. (If your IT platform does not support these applications, please download the Adobe .pdf ™ version.)

    The intention is to make these modules an open course (like open source code) – you are invited and welcomed to provide IBM with additional viewpoints and deeper thoughts on any area of interest. IBM is encouraging more research into service science, and as such challenges you to provide constructive criticism with respect to content, delivery, and use of the SSME modules.

    Overview of Module Format

    In general, each module is designed to discuss a topic that is thought to be relevant to SSME. Each module is formatted to contain objectives, topic-specific content, summary, activities, references, and additional readings. There may, however, be slight deviations from this formulation due to the iterative nature of review, feedback, and modification that in encouraged to fully encompass relevant materials. To help you get acquainted with how the modules are designed, each element is described in the following.

    The objectives have been written to orient the instructor and student with respect to the module topic at hand—generally stating what one should have a cursory understanding of after reading the references, performing some or all of the activities, and reviewing the topic-specific content.
    Topic-specific content

    The topic-specific content either describes and/or illustrates what is thought to be relevant and important to the current subject at the time the modules were created. It is not the intention for the modules to be fully inclusive of all material related to the topic-specific content; but, instead to provide archetypal elements that may lead to additional discussion and/or investigation on the parts of the instructor and student.

    The summary is provided to recap, connect, and provide closure to the ideas presented in the module. As with the topic-specific content, the summary is not meant to be all inclusive but instead a launching point for more in-depth study and discussion.

    The activities provided in the modules are suggested as aids for further investigation, experimentation, and comprehension of the concepts presented in the modules.
    References and Additional Readings

    The references contained in each module are listed with respect to providing direct context for the topic. It is suggested that both instructors and students familiar themselves with the reference materials. The additional readings are thought to provide considerable, yet supplemental, context for the topic.
    Overview Presentation Notes

    The presentation paired with this overview is considered to be supplemental and provide general context around the notion of Service Science, Management, and Engineering. Materials can be used as a stand-alone introductory topic or supplemental to individual topics.
    Slide 1: Introduction to SSME

    Introduction to Service Science, Management and Engineering (SSME)

    This module describes the group of SSME modules and how they fit together. Modules can be read in any order. Parts of them can be used to supplement existing courses. There is a great deal of related materials among the modules. You may find that you need to reference more than one at a time.
    Slide 2: What is SSME?

    What is SSME?

    SSME has the goal of making productivity, quality, performance, compliance, growth, and learning improvements more predictable in work-sharing and risk-sharing (co-production) relationships.

    SSME is the application of scientific, management, and engineering disciplines to tasks that one organization beneficially performs for and with another (i.e., services)

    SSME is the study of service systems—aimed at improving service systems

    Example: e-Sourcing Capability Models (eSCM) at Carnegie Mellon University can be found at (Earlier press announcement are at and html )

    The call for a service science can explored in readings such as:

    J.R. Bryson, P.W. Daniels, and B. Warf’s (2004) book “Service Worlds: People, Organizations, Technologies”

    H. Chesbrough in the Harvard Business Review (2005) article entitled, “The HBR List: Breakthrough Ideas for 2005”

    J.M. Tien and D. Berg’s (2003) article “A Case for Service Systems Engineering”

    R.K. Shelp’s (1981) book “Beyond Industrialization: Ascendency of the Global Service Economy”

    Books on SSME are beginning to be published. Recent examples include:

    Hefley, B. and Murphy, W. (Editors). (2008). Service Science, Management, and Engineering: Education for the 21st Century. (ISBN-10: 0387765778, ISBN-13: 978-0387765778). New York: Springer Science+Business Media, LLC.

    Stauss, B., Engelmann, K. Kremer, A., & Luhn, A. (Editors). (2007). Services Science: Fundamentals, Challenges and Future Developments. (ISBN-10: 3540744878, ISBN-13: 978-3540744870). Berlin: Springer.

    Spath, D. & Fähnrich, K.-P. (Editors). (2006) Advances in Services Innovations. (ISBN-10: 3540298584, ISBN-13: 978-3540298588). Berlin: Springer.

    Examples of SSME champions and leaders can be found on the IBM (2006) Research website at
    Slide 3: Why is SSME Important?

    Why is SSME important?

    The world is becoming flat and networked, dependent on information and information technology

    Science needs to provide tools and methods to study services and develop solutions to problems that span multiple disciplines

    Graduates may be solution designers, consultants, engineers, scientists, and managers who will grow into becoming entrepreneurs, executives, researchers, and practitioners

    There are several points of view about the importance of creating SSME.

    Services are the largest part of the U.S. economy and fastest growing sectors in developing countries (in fact, manufacturing includes services too)

    GDP growth depends on companies’ ability to earn revenue and make profits

    Revenue and profit increases depend on productivity and innovations

    Innovation and productivity depend on multidisciplinary skills

    Multidisciplinary skills depend on getting students and employees trained in service science

    (The notion of flat refers to writings by T.L. Friedman (2005) in “The World is Flat: A Brief History of the Twenty-first Century”)

    U.S. academic institutions are failing to attract computer science students

    Global students are either learning in the U.S. and taking their skills back home or are learning in their own countries

    IBM’s Motivation

    Need better trained people: Services professionals & researchers

    Need more knowledge about sustainable service innovation techniques: Innovation is the key to value creation and capture; hence the key to sustainable business advantage

    Need more systematic methods for studying and creating knowledge about service systems: Investment in science & research pays in new knowledge. Example: Computer Science (co-evolution of occupation, discipline, techniques, science)

    Slide 4: Service Innovation

    Service innovation is inherently multidisciplinary

    Knowledge sources driving service innovations…

    Science & Engineering—technical innovation

    Social Sciences—social-organizational innovation

    Business Administration and Management—business innovation

    Global Economy & Markets—demand innovation

    SSME = Service Science, Management, and Engineering

    Service science is multidisciplinary.

    Socio-technical systems theory – A framework for describing and explaining the relationship between technical and non-technical elements in a work organization, based upon systems theory and the observation that technology and human are interdependent in achieving organizational performance.

    Why SSME?

    The world needs more service innovation & systematic approaches to service innovation must be interdisciplinary.

    Science & Engineering = Study phenomena and create new knowledge

    Social Sciences = Study phenomena and create new knowledge

    Global Economy & Markets = Emergence of new knowledge in practice!

    Business Administration and Management = Study phenomena and create new knowledge
    Slide 5: Modules


    Services (What are services?)

    Systems (Services depend on socio-technological systems)

    Management, Marketing, and Operations (What’s the difference for services?)

    Productivity and Innovation (Do services resist productivity gains?)

    Methods (Delivery depend on methods)

    Developing Supply Chains to Support Service Operations

    Challenges, Frameworks, and Call for Participation


    This module discusses the ideas of

    The emerging importance of services in economies and movement towards a global service economy

    Customer as co-producer of value

    Locus of innovation (e.g., clients, business models, technology, people)

    How the emerging field of SSME brings together the disciplines such as computer science, operations research, industrial engineering, business strategy, management sciences, social and cognitive sciences)


    This module discusses the ideas of

    General types of systems (e.g., natural, manufactured, socio-technological)

    Services being socio-technological systems

    Co-production as the service system differentiator

    Value in a service system

    Management, Marketing, and Operations

    This module discusses the ideas of

    Management, market, and operations considerations specific to services

    Strategic planning, policies to empower, and measurements

    Differentiation is required and consider of client as co-producer

    The perception of value

    Productivity and Innovation

    This module discusses the ideas of

    Measurement challenges

    Resistance to productivity gains

    Engineering and interpretive models



    This module includes

    Considerations for the use of methods in the services lifecycle from engagement through solutions design and delivery.

    Introduction to the use of methods in services

    Discussion of the spectrum of pure invention to automation

    Why methods can be valuable

    How methods are applied

    Possible limitations

    Developing Supply Chains to Support Service Operations

    Class discussion about how supply chain principles and processes are at work in service operations.

    Challenges, Frameworks, and Call to Action

    This module reviews the motivations for creating SSME and begins to explore what could be considered interesting problems for future service research. It includes some suggestions for institutions and policy makers.
    Slide 6: SSME Timeline – some history

    Dec. 2002: Almaden Service Research established – the first IBM Research group completely dedicated to understanding service innovations from a sociotechnical systems perspective, including enterprise transformation and industry evolution.

    March 2003: IBM-Berkeley Day: Technology At Your Service!

    September 2003: Coevolution of Business-Technology Innovation Symposium.

    April 2004: Almaden Institute: Work in the Era of the Global, Extensible Enterprise.

    May 2004: IBM Research and BCS hosted faculty from prestigious U.S. universities. Professors from various academic disciplines joined IBM’s researchers and consultants to discuss the development and introduction of services science as a new academic discipline at the university level. As a result of the summit, the participants issued a report on services science. You can read the report and see the participants at:

    June 2004: Paul Horn briefed analysts on “Services as a Science” and it was highlighted in a Merrill Lynch report.

    June 2004: IBM participated in the Global Strategic Service Management Symposium held at Carnegie Mellon to explore the curriculum needs for graduate and executive education programs in service management.

    September 2004: “A failing grade for the innovation academy,” written by U.C. Berkeley professor Hank Chesbrough appears in the Financial Times.

    November 2004: Service Innovations for the 21st Century Workshop. IBM, the Management of Accelerated Technology Innovation (MATI) industry consortium, and Northwestern University’s Center for Technology & Innovation Management (CTIM) co-hosted this meeting with 140 academics, business leaders, government agencies, consultants and researchers. During the two day workshop, the group discussed services innovation from four perspectives: manufacturing companies, traditional services companies, academics and government agencies. In order to accurately understand services innovation and the academic curriculum needed to drive continued innovation, all four of these areas need to be thoroughly explored.

    November 2004: IBM’s GIO focuses on service sector innovations: government, healthcare, work-life balance.

    December 2004: IBM expands academic initiatives related to service innovations, including sponsoring SSME-related research projects at the Tannenbaum Institute of Enterprise Transformation at Georgia Tech.

    2004: IBM interacts with over 35 U.S. universities on the topic of SSME, ranging from joint workshop discussions to developing potential SSME curricula.

    January 2005: Business Week Online publishes an article by Paul Horn: “The New Discipline of Services Science.” Click here to read the article.

    January 2005: Bob Sutton and Steve Barley, co-directors (and professors) of the Center for Work, Technology and Organization at Stanford, granted IBM faculty awards for services science related research.

    January 2005: IBM grants five faculty awards to encourage and support SSME and innovation at U.C. Berkeley, under the umbrella of CITRIS (Center for Information Technology Research in the Interest of Society) and MOT (Management of Technology) programs at U.C. Berkeley.

    February 2005: Harvard Business Review touts SSME as one of the “Breakthrough Ideas for 2005.”

    February 2005: IBM researcher Paul Maglio presents SSME to a group of NYU (Stern) business school students.

    February 2005: Bay Area Services Services (BASS) kickoff at Almaden, a speaker series designed to foster relationships between researchers and consultants. Under the general theme “Energizing Services Innovations and Collaborations.” Click here for more information.

    February 2005: IBM’s Jim Spohrer presents the concept of SSME to a group of University of Virginia (Darden) business school students.

    March 2005: Bill Rouse of Georgia Tech’s Tennenbaum Institute of Enterprise Transformation speaks at IBM’s Almaden Research Center.

    March 2005: Uday Karmarkar of UCLA’s Anderson School of Management speaks at IBM’s Almaden Research Center.

    March 2005: IBM researchers Sara Moulton Reger and Paul Maglio attend the Services Leadership Institute at Arizona State University.

    May 2005: IBM will participate in an SSME workshop with Oxford University.

    June 2005: Maglio or Spohrer at Bentley DSI mini-conference and roundtable at ISSS (International Society for the Systems Sciences) in Cancun.

    Summer 2005: NCSU proposes new concentration; meetings with Stanford, UCLA, Hitachi, John Deere, visit by Dr. N. Viswanadham of the Indian School of Business, UC Berkeley, others.

    August 2005: Carnegie Mellon launches the first graduate-level IT service management program with a six course concentration in its Masters of Information Systems Management (MISM) program.

    September 2005: CSAB (Computing Sciences Accreditation Board) panel

    Fall 2005: first service science PhD fellow candidate starts. Almaden represented at CASCON in Toronto.

    November 2005: ASU symposium; Spohrer speaking at UC San Diego.

    January 2006: Maglio speaks at Las Vegas IBM’s Software University.

    January 2006: NESSI begins study on service in Brussels. IBM’s Feldman speaks at ONCE-CS Workshop on ‘Science of Services’. Oracle visits ASR.

    February 2006: Rohit Verma hosts workshop on service in Park City Utah. Magli visit Italy

    Spring 2006: first service joint project for IBM Systems and Technology group and Georgia Tech’s Tennenbaum Institute. Spohrer and Maglio speak at conferences or with government representatives in Germany, Finland, Japan, Spain, others. Fujitsu visits ASR.

    March 2006: ASR launches free introductory course materials.

    March 2006: Services Leadership Institute at ASU.

    April 2006: Workshop on Education for Service Innovation at National Science Foundation.

    April 2006: Kazuyoshi Hidaka’s (IBM TRL) article on SSME in “Science and Technology Trends – Quarterly Review”

    May 2006, Spain, workshop, Bentley’s Mark Davis.

    June 2006: Panel at 8th IEEE Conference on E-Commerce Technology (CEC’ 06) San Francisco, California;

    June 2006: Brenda Dietrich (IBM Watson) and Terry Harrison’s (Penn State) article in ORMS Today

    July 2006: Spohrer and Maglio co-chairs with University of Maryland’s Roland Rust on 15th annual “Frontiers in Service” conference.

    July 2006: CACM special issue

    October 2006: Spohrer in Maine at POPTECH Conference. CASCON 2006. Others.

    October 2006: IBM’s representatives attend Emergence Conference at the CMU school of design.

    October 2006: Conference: Education for the 21st Century hosted by ASR at Palisades NY.

    November 2006: keynote at “Global Conference on Emergent Business Phenomena in Digital Economy” organized by Tampere University of Technology, Institute of Business Information Management and eBRC,

    Fall 2006: IBM’s Feldman speaks in India, Australia, China and Israel.

    Fall 2006: Spohrer and Maglio Overview of SSME published in POMS

    Fall 2006: NCSU’s degree available. * lists of schools with offerings on SSME topics can be found elsewhere on this site:

    WIKIPEDIA entry published about SSME.

    Throughout 2006: IBM’s University Relations hosts academic days around the world SSME theme.

    MIT lecture series:

    Berkeley lecture series


    Bryson, J.R., Daniels, P.W., & Warf, B. (2004). Service worlds: People, organizations, technologies. New York: Routledge.

    Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. New York: Farrar, Straus, & Giroux.

    Harvard Business Review. (2005, February). The HBR list: Breakthrough ideas for 2005. Harvard Business Review (Reprint R0502A), 1-27.

    International Business Machines Corporation. (2006). Services Science, Management, and Engineering: SSME Leaders. Retrieved March 2006, from

    Tien, J.M., & Berg, D. (2003). A case for service systems engineering. Journal of Systems Science and Systems Engineering, 12, 1.

    Shelp, R.K. (1981). Beyond industrialization: Ascendancy of the global service economy. New York: Praeger.

    Related web site links

    IBM Institute for Business Value

    Hiding in plain sight – Service Innovation, a new priority for chief executives

    Services Engineering topics

    Service Engineering a Technion course

    Service Oriented Architecture IBM developerworks

    Aligning Business and IT with the SOA at Berkeley SSME Lecture series

    SOA realization: Service design principles

    Patterns for ebusiness from IBM developerworks
    Services Design topics

    Glusko on Service Design from Berkeley Lecture Series

    Service Design Organization wiki

    IDEO on service design

    New Service Design Harvard Business Review article

    Industrialization of Services topics

    IBV: Unlocking the value of account opening with component business modeling

    IBV: Component business modeling: Financial services firms prepare for an on demand world

    Creating Customer Value Through Industrialized Intimacy; By Peter Kolesar, Garrett van Rysin and Wayne Cutler

    © Copyright IBM Corporation 2006, 2007. All rights reserved.

    Update March 2008 (wm)

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