Talk: Irene Ng at IBM Almaden Research Center (Jan 14,15)

Talk 1 of 2 (Monday):
Monday January 14th 11-12noon, at IBM Almaden.
Main Talk:  “Outcome-based Contracts as a New Business Model: Research Insights from Aerospace/Defence contracts”
Speaker: Professor Irene Ng,  Professor of Marketing & Service Systems, University of Warwick, Warwick Manufacturing Group (WMG)
Contact: Cynthia Farmer (, 408-927-1268) for Jim Spohrer (host,, 408-829-3112)

Abstract:   Equipment-based services have traditionally been contracted on the basis of revenue-generating activities, materials and time required to maintain, repair or overhaul equipment such as engines and elevators. This often results in provider opportunism since the very activities that disrupt the customer’s use of the equipment are those that generate revenue for the firm, and the firm has less incentive to ensure the long-term care of the customer’s equipment. We present our investigations into outcome-based contracts (OBC) in equipment service particularly in the aerospace and defence sector, where some of these contracts are outcome-based (e.g. Flying hours of jets, power-by-the-hour for engines), aligning the incentives of customer and provider. We present our findings on the service system design, delivery and performance of outcome-based contracts as new business models through the case study of OBC contracts between BAE Systems (jets), MBDA (missiles) and Rolls Royce (engines) with the UK Ministry of Defence.


Bio: Professor Irene Ng

Irene Ng is the Professor of Marketing and Service Systems and Director of the International Institute of Product and Service Innovation (IIPSI) at WMG, University of Warwick, UK. She holds a PhD specialising in pricing and economic models for service and an undergraduate degree in Physics, both from the National University of Singapore.

For 16 years, Irene was an entrepreneur. In 1989, with very little capital, she took over an ailing SA Tours, one of the largest tour operators in Southeast Asia and turned it around by diversifying into cruises. In 1994, she pioneered year-round cruising in the region, and went on to start up Empress Cruise Lines (ECL) with USD5 million of private equity. By the time she sold ECL in 1996, she had built it into a venture of USD250 million annual turnover.

Her change of career to become an academic in 1997 has led to global recognition for her work in value, new business models and service systems with more than 22 international journal articles, two books and over 50 conference proceedings in the domain of engineering, management, marketing, information systems, economics, education and sociology. As a business academic, she has held more than £7.8m worth of multi-disciplinary scientific grants since 2008 as a Principal and Co-Investigator. Her new book ‘Value and Worth: Creating New Markets in the Digital Economy’ has just been released on Amazon Kindle ( She is also one of the 4 investigators of NEMODE, (New Economic Models in the Digital Economy) a £1.5m initiative under the Research Councils UK (RCUK)’s Digital Economy (DE) Network+ programme.She is also the author of The Pricing & Revenue Management of Services: A Strategic Approach published by Routledge, and the lead editor of Complex Engineering Service Systems: Concepts and Research published by Springer

Irene received recognition for her work when she was appointed one of six UK ESRC Advanced Institute of Management (AIM) Research Services Fellows in 2008, and when she became the ESRC/NIHR Placement Fellow and academic advisor to the Cambridge University Health Partners in 2009. She was also appointed a Visiting Fellow of Wolfson College Cambridge in the same year. Irene joined WMG at the University of Warwick in September 2011, where she is tasked to grow WMG’s capability of impactful and cutting edge research and leading practice in the business and management of service systems and digital innovation. She was appointed the Director of IIPSI in September 2012.

Irene continues to work actively with industry, small and large. She has collaborated with organisations such as GlaxoSmithKline, Rolls-Royce, BAE Systems, IBM, and the Ministry of Defence, and she advises start-ups on new pricing and economic models. As Director of IIPSI at WMG, Irene combines her research in value and markets with her entrepreneurial practice experience to focus on scaling IIPSI’s capability as an innovation ecosystem to create new jobs and start-ups in digital technology.

To access Irene’s institutional pages, please visit For her personal research papers, please visit:


About WMG and the International Institute for Product and Service Innovation (IIPSI) (

WMG is an internationally leading group focused on improving competitiveness of organisations through innovation, technologies and skills, and bringing academic rigour to organisational practice. An independent, interdisciplinary academic department of the University of Warwick, WMG has over 300 staff and a research grant and contracts portfolio (primarily EPSRC, TSB, EU and industry) of £52m (live projects), including an EPSRC Industrial Doctorate Centre. WMG Digital is an Innovation ecosystem platform to achieve impact in the digital economy with activities from cutting edge research through to pre-incubation of start-ups and commercialisation of technology. IIPSI is the newest institute of WMG. It is European Regional Development Fund (ERDF), and university- funded state-of‐the‐art facility, a building showcasing the technology demonstrators of WMG’s core research areas: Digital Innovation; Polymer Innovation and Experience Led Innovation.  A unique feature of IIPSI is the presence of a business research team focusing on value, service systems and new business models, headed by IIPSI director Professor Irene Ng. Professor Ng’s team is engaged in cutting edge business research for publications but also serve to transfer knowledge of its research to bootstrap IIPSI’s 3 technology-focused research andassist increating unique business and market-led propositions. IIPSI has 7 dedicated knowledge transfer SME team focused on boosting R&D capacity and competitiveness within small businesses; since the initiative began 2 years ago, it has created 12 new high tech start‐up businesses, directly generated 70 new jobs, and trained over 450 small business in a range of digital technologies over the last four years.

Talk 2 of 2 (Tuesday):
Tuesday January 15th 11-12noon, at IBM Almaden.
And foreshadow of coming talk at Almaden: “Creating New Markets in the Digital Economy”
Speaker: Professor Irene Ng,  Professor of Marketing & Service Systems, University of Warwick, Warwick Manufacturing Group (WMG)

Abstract: The talk introduces Irene Ng’s latest book ‘Value and Worth: Creating New Markets in the Digital Economy’. It looks at how digitisation is changing the way we buy and use products and services. It considers what individuals value about what we have around us and the way we use them, in order to understand how value is created.   Crucially, the book looks at how markets are converging between exchange (when we pay) and experience (when we use). This convergence, accelerated by greater digitisation, means there is a need to understand contexts of value creation within lived lives. This will enable firms to innovate and design future products and services to take advantage of the connectivity between them and emerge horizontal or systemic business models instead of deriving revenues from the traditional vertical industry value chains.



Also update on Centers & Center work…
And a discussion of NEMODE: New Economic Models by Roger Maull
Professor Roger Maull, University of Exeter Business School (Principal Investigator, NEMODE)

New Economic Models in the Digital Economy (NEMODE)  is an initiative under the Research Councils UK (RCUK)’s Digital Economy (DE) research programme to bring together communities to explore new economic models in the Digital Economy. The project, which began in April 2012, has funding of £1.5 million over the next three years.  NEMODE focuses on New Economic Models, one of four RCUK DE Challenge Areas (the other three being IT as a Utility, Communities and Culture, and Sustainable Society). It aims to create a network of business people, academics and other experts who will identify and investigate the big research questions in new economic models that have arisen as a result of the digital economy’s fast-paced growth.


Bio: Professsor Roger Maull

Professor of Management Systems at the University of Exeter Business School. He is one of the co-directors of Exeter’s Centre for Innovation for Service Research, and is co-editor of the 3* International Journal of Operations and Production Management. Since April 2012, Roger has been the lead investigator on RCUK’s £1.5m Digital Economy funded network+ on New Economic Models in the Digital Economy (NEMODE) and is currently leading two research calls on platforms and big data. He has received over £2.5m of RCUK funding for systems related research and has been Principal Investigator on commercially-funded projects with Vodafone, Microsoft, IBM and the South-West Strategic HealthAuthority.

Professor Maull’s research challenges and extends the traditional boundaries of Operations Management research. He has written in numerous publications about managing processes in sectors such as computing, banking, telecoms and logistics. Professor Maull has developed and delivered a wide range of process modelling courses for companies such as Vodafone, Woolwich, IBM, ICL, Rank Xerox, GKN/Westland Aerospace, LloydsTSB, Scottish Amicable Scottish Power, British Aerospace, Motability Finance Ltd, DuPont, Fujitsu, Prudential and Sprint PCS. He has been awarded international grants to work with industry in the USA, Australia, Germany and Italy. He regularly acts as a BPM advisor for a wide ranging group of companies and public bodies including Vodafone, LloydsTSB, Britannia Building Society, Compaq, IBM, hospital trusts, Society of British Aerospace Companies (SBAC), Met Police.


Very important:
Cynthia Farmer (cc-ed) will need each visitor to send the following information in advance:
…so there is a badge for the visitor at the IBM Almaden Lobby, and so that IBM Security has their name when they arrive at the gate.
Also, those who want can buy lunch and join Irene Ng and Jim Spohrer in Almaden Cafeteria for lunch and discussion.

Directions to IBM Almaden:




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