Happy New Year 2011 to you and the other pioneers in the service science community world wide!

Let’s start the new year right by introducing “whole service” as an ambitious and exciting new frontier area.

Everyone knows what self service is, and some have even heard of super service, but what is “whole service?”

To begin to get a feel for what “whole service” is, imagine creating whole new cities and nations from scratch… if you keep reading, you’ll see some very serious people are working on practical approaches to creating new cities and nations from scratch. But why would anyone want to do that, you ask? Two simple reasons, first,, changing an existing city or nation is really HARD WORK, too much inertia, and second, some cities and nations are failing many of their citizens, and so within them, its an unnecessarily HARD LIFE for too many. Furthermore, as you will also see, we are beginning to have the technology to do large scale projects quickly and cost-effectively that provide a good return on investment. So starting fresh, tabula rasa, opening up new frontiers, letting people “vote with their feet” to try new social and political experiments more quickly and accelerate progress for millions is the core idea behind Paul Romer’s Charter Cities and Patri Friedman’s Seasteading Nations… but before exploring these, let’s introduce two new service science concepts: “whole service” and “holistic service systems”…

Whole Service: Some service systems provide “whole service” to the people within them. For example, a city provides “whole service” for its citizens and visitors, including flow of things people need (e.g., transportation, water, food, energy, communications), development activities for people (e.g., buildings, retail, finance, health, education), and governance (e.g., laws, security, dispute resolution, etc.). To a lesser degree, but similar in kind, a luxury cruise-ship provides “whole service” to its passengers. Even old-time homestead farms and ranches, because they had to sustain families and hired hands sometimes over multiple generations with minimal external inputs, are to some degree providing “whole service” to those people living within them.

Holistic Service Systems: To first approximation, the study of holistic service systems is concerned with how well these entities provide “whole service” to the people within them. Whole service deals with a conjunction of three types of service, namely (1) flow of things people need, (2) development activities for people, and (3) governance for individuals and institutions. A holistic service system is defined as “a service system that can support the people within it, with some level of (1) completeness (quality of life associated with whole service – flows, development, and governance), (2) independence (from all external service systems),and (3) extended duration (longer than a month if necessary and in some cases indefinitely).” Noteworthy levels of completeness, independence, and extended duration of “whole service” are the three defining properties of holistic service systems.

Starting new nations has been done hundreds of times in human history. My forefathers did it, and so did yours. Starting a new city has been done tens of thousands of times in human history. While starting new nations and cities has not been done as many times as starting new businesses (hundreds of millions of times at least), nevertheless the founders of new nations and cities are every bit as entrepreneurial as the founders of new businesses. We will see that Romer and Friedman are not Utopians, they are instead Empiricists — they see making it easier to start cities and nations, as a way of doing more experiments more quickly. Some experiments may not turn out well, but others that work may more than make up for the failures.

Slowly, but surely the world view that businesses, cities, nations are all service systems is taking hold. And what is exciting to service scientists, those who study service systems, is that like agriculture “getting good at” growing crops and like manufacturing “getting good at” producing products, finally in human-history we are “getting good at” designing service systems. What does “getting good at” mean in practice? It means better return on investment for time, money, and effort. Outcomes will never be perfectly predictable, but knowledge has been accumulated that allows us to produce results more predictably than previous generations.

When the outcomes that are possible are deemed better than before, and the probabilities of achieving those outcomes are empirically better than before – one might say “the present represents progress over the past.” Our generation enjoys more possibilities and better probabilities than previous generations of living longer lives, owning our own home, seeing our kids go to college, and the list could go on an on.

Nevertheless, “progress” is a tricky thing to define. For now, let’s just say that one measure of human progress is more knowledge of agriculture, manufacturing, cities, nations, and other complex service systems, and being able to design them better and get not only better possible outcomes, but more predictable outcomes as well.

So in today’s world, how might one go about starting a new city or new nation?

Paul Romer’s Charter Cities

Before reading further take 30  minutes and watch the following YouTube video.

As Paul Romer has said “There‘s no impediment, other than a failure of imagination, that will keep us from delivering on a truly global win-win solution.”

The Charter Cities webside (http://www.chartercities.org/) explains it this way: “Charter cities offer a truly global win-win solution. These cities address global poverty by giving people the chance to escape from precarious and harmful subsistence agriculture or dangerous urban slums. Charter cities let people move to a place with rules that provide security, economic opportunity, and improved quality of life. Charter cities also give leaders more options for improving governance and investors more opportunities to finance socially beneficial infrastructure projects. All it takes to grow a charter city is an unoccupied piece of land and a charter. The human, material, and financial resources needed to build a new city will follow, attracted by the chance to work together under the good rules that the charter specifies. Action by one or more existing governments can provide the essentials. One government provides land and one or more governments grant the charter and stand ready to enforce it. What might a charter city look like? The concept of a charter city is flexible. Consider three specific examples: Case 1: Canada develops a Hong Kong in Cuba, Case 2: Indonesians flock to a manufacturing hub in Australia, Case 3: States in India compete for the chance to build a charter city.”

Patri Friedman’s Seasteading Nations

While not as well developed or polished as the previous video, before reading further take 5 minutes and watch the following YouTube video:

As Patri Friedman has said “With a little technical innovation… we can unleash enormous political innovation… let a thousand nations bloom on the high seas.”

The Seasteading Institute website (http://seasteading.org/) explains it this way: “At The Seasteading Institute, we believe that experiments are the source of all progress: to find something better, you have to try something new. But right now, there is no open space for experimenting with new societies. That’s why we work to enable seasteading communities — floating cities — which will allow the next generation of pioneers to peacefully test new ideas for government. The most successful can then inspire change in governments around the world. We’re opening this new frontier because humanity needs better ways to live together to unlock our full potential… Currently, it is very difficult to experiment with alternative social systems on a small scale; countries are so enormous that it is hard for an individual to make much difference. The world needs a place where those who wish to experiment with building new societies can go to test out their ideas. All land is already claimed — which makes the oceans humanity’s next frontier.”

If cities and nations seem too much to bite off, let’s look at a smaller holistic service system, such as luxury resort hotels first. Each year one or more new luxury resort hotels pops up somewhere in the world…. let’s look inside one of these for lessons in creating a holistic service system.

Kim Grange’s Venetian Resort

A luxury resort hotel provides whole service, but is smaller than a city or nation, so before reading further take 3 minutes and watch the following YouTube video.

In fact, it is short enough you should watch it two or three times, and note the amazing service variety available, as well as the desire to keep the casinos – the revenue engines of these service systems going – to maintain viability, even if cut off from some of the service utilities that are provisioned by the city of Las Vegas. As Kim Grange says in the video… “Here at the Venetian, we are a city-within-a-city… we’ve got to keep the casino running, that’s our revenue…”

Many luxury resort hotels are under construction around the world today, and they resemble miniature cities. Luxury resort hotels must provide “whole service” and many amenities to their customers – or customers would not pay the premiums they do to be there. Within the service science community a great deal is known about luxury resort hotels, and so this provides a good foundation for future research on “whole service” and “holistic service systems.”  For example, see the hospitality leadership research reports at the following website http://www.hotelschool.cornell.edu/research/chr/pubs/reports/

But what does it cost to build a luxury resort hotel? According to hospitality consultants HVS, the average allocations of budgeted costs for hotels are 13% for land, 11% for development and soft costs, 61% for site improvement and building construction, 12% for furniture, fixtures, and equipment, 3% for pre-opening and working capital (see http://www.docstoc.com/docs/1604634/How-Much-Does-it-Cost-to-Build-a-Hotel). Using the room as a basic unit of measure, actually costs range from $30,000 per room for economy hotels up to $600,000 per room for luxury hotels and resorts.

Also, thanks to technological advances and economies of scale, over time the amenities of economy hotels get better and better, and the relative cost of hotels to the GDP per capita of nations is most likely going down. So changes in technology and economies of scales result in lower and lower costs over time for modular construction of hotels, cities, and nations – as holistic service systems. For example, to understand the power of modularization in lowering building costs, watching the following five minute video is well worth the time… http://www.flixxy.com/shipping-container-homes.htm
Eric Reynolds, founding director of urban space management, has shown the value of shipping containers as modules for construction projects.

Also, there is evidence to suggest the more advanced the building material, the shorter the service life of a building is likely to be. At first this seems paradoxical to most people, they reasons that more modern materials would make buildings last longer, right? Yes, but more modern materials offer advantages that make rebuilding more cost effective as well! For example, Jennifer O’Connor, a researcher at Forintek Canada Corp, did a survey on the service lives of buildings and found results that challenge many of the common assumptions about building longevity (http://www.softwoodlumber.org/pdfs/SurveyonActualServiceLives.pdf). Wood buildings were found to have longer service lives that steel and concrete buildings for example. Also, the average building service life in a survey of over 200 buildings was around 75 years. It may be reasonable to assume that the average service life of buildings is actually decreasing, as more modern building materials are used. Better knowledge and technologies, shortens the service life of infrastructure and things, because people are willing to invest to replace it more often.

So where are the modular building blocks of future cities heading? Not surprisingly, they are going green to eliminate waste, and enhance sustainability.

Harrison Fraker’s EcoBlocks

A city block can be designed as a whole system, so before reading further take 10 minutes and review these Slideshare slides:

As Harrison Fraker’s has written (http://bie.berkeley.edu/ecoblocks) “…the Qingdao EcoBlock, uses an integrated whole-systems approach to generate all its energy from on-site renewables, to recycle all of its water and to recycle over 80% of its waste for on-site uses.,. The integrated, whole-systems approach is made of proven existing technologies. The innovation lies in how the systems work together. The sustainable systems add 5-10% to the cost of typical development and have a 6-10 year payback, depending on the policy regulations of the city. The concept has the potential to be a profitable business opportunity for the developer who is also the property manager. While the systems do not depend on any change in homeowner operation and maintenance, ”

So returning to the concepts of “whole service” and “holistic service systems” we can begin to see numerous opportunities for research and practice coming into focus. Recall whole service deals with a conjunction of three types of service, namely (1) flow of things people need, (2) development activities for people, and (3) governance for individuals and institutions. Also recall that a holistic service system is defined as “a service system that can support support the people within it, with some level of (1) completeness (quality of life associated with whole service – flows, development, and governance), (2) independence (from all external service systems),and (3) extended duration (longer than a month if necessary and in some cases indefinitely).”

If the trends related to building luxury resort hotels, cruise-ship nations, ecoblocks, and cities continue, some interesting cross-over points are coming in just a decade or two. From a whole service perspective, the flow of things will become more interconnected and efficient – so independence levels will go up as the cross-over point of most materials coming from recycling rather from outside the system occurs. For example, ecoblocks link water, waste, and energy to boost independence levels. IBM has predicted that by 2015, computers will help energize your city (see http://www-03.ibm.com/press/us/en/pressrelease/33304.wss). So with respect to the flow of things people need (e.g., transportation, water, food, energy, ICT (computing and communications)) there will be more interconnectedness and greater levels of efficiency, and independence from outside systems, as a result. Also people augmented with smart phones and tied into the world’s knowledge in new ways (see http://www-03.ibm.com/press/us/en/pressrelease/33233.wss) means that development activities for people (e.g., buildings, retail, finance, health, education) are likely to include better possibilities and better probabilities as a result of enhanced capabilities. More and more information-poor decision making will be replaced by information-rich decision-making. Finally, governance (e.g., laws, security, dispute resolution, etc.) will be informed by more social and political experiments, as if becomes cost effective over 75 year time frames, then 50 year time frames, and eventually perhaps even 20 year time frames to rebuild cities with the latest physical technologies as well as government technologies.

As the service science community comes to embrace and extend the concepts of whole service and holistic service systems, the integration of service systems for reducing waste (flows), enhancing capabilities (development), and periodic rebuilding (governance) will provide a foundation for more types of experiments, run more frequently, setting the stage for accelerating progress in the design of better and better holistic service systems. Achieving better levels of completeness, independence, and extended duration, if needed.

Whole service is about the design of complex societal service systems (see for example http://rayfisk.com/docs/Glasgow2008.pdf).  Among the research priorities to advance the science of service, a global team of experts identified an area called  “improving well-being through transformative service” (see http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm).  The study of complex business and societal systems is increasingly of interest to members of the service research community (see for example, http://www.rhsmith.umd.edu/ccb/). 

Concluding Remarks

In conclusion, consider two final points:

First, in many ways, universities are the most important types of holistic service systems in an accelerating knowledge economy. Universities are mini-cities, and can become the living labs for much of the research on whole service. NYU’s John Sexton describes the coming of the global networked university (http://www.nyu.edu/about/leadership-university-administration/office-of-the-president/redirect/speeches-statements/global-network-university-reflection.html). Sexton notes that “Daniel Patrick Moynihan said nearly 50 years ago: “If you want to build a world class city, build a great university and wait 200 years.” His insight is true today – except yesterday’s 200 years has become twenty. ” In many areas, thanks to universities, we are seeing an acceleration of progress flowing from one area of the world to another. Hans Rosling makes this point for health and wealth in a four minute video that shows 200 nations evolving over 200 years (http://www.flixxy.com/200-countries-200-years-4-minutes.htm). Some of my capstone project students have been developing something similar that looks at top university education and wealth of nations (http://www.upload-it.fr/files/1513639149/graph.html). Truly, universities are the knowledge batteries of regions an essential to accelerating progress (see http://www.slideshare.net/spohrer/icsoc-20101208-v2). And yet, as Richard Larson of MIT reminds us, education remains terribly under-studied relative to its importance (http://www.sersci.com/ServiceScience/paper_details.php?id=40).

Second, not everyone shares the view that service is worthy of scientific research, nor even a worthy part of the national economy. Perhaps, it is good for us all to read some of the contrarian views. Here is another take on whole service — the view that the “whole service economy” should just go away (http://pogoprinciple.wordpress.com/2009/06/18/a-nation-of-hamburger-flippers/). “Peter Schiff: The whole service sector economy has to go away…
We have assumed, for some time now, that employment in the service sector was doomed in this crisis. We just came across this quote from Peter Schiff from 2007 which, for the first time, put into words what we have been awkwardly trying to explain on this blog to anyone who would happen by and read it.
Peter Schiff (2007): December’s larger than expected jump in non-farm payrolls is predictably being touted as evidence of a more vibrant U.S. economy. Unfortunately, the data does not support this conclusion. The bloated service sector added 178,000 jobs, while manufacturing shed another 12,000 jobs. What this means is that 178,000 more workers will be consuming goods while 12,000 fewer will be making them. The result will be larger trade deficits that merely compound already stretched global imbalances and exacerbate America’s inevitable day of reckoning. A service sector can only exist so long as it is supported by a vibrant manufacturing sector. The reason is simple. People employed in the service sector consume goods but do not actually produce any of them. Therefore they must rely on others, who presumably benefit from their services, to produce goods in their stead.”

We have our work cut out for us. We can only hope that new books, like UC Berkeley’s Henry Chesbrough’s “Open Services Innovation” (http://www.openinnovation.net/featured/to-innovate-think-of-your-business-as-a-service/) and others that are forthcoming by others, can help educate policy makers, journalists, academics, industry and government professionals, and even a few of the well-known contrarians – that sooner or later, we have to view all businesses and complex human systems from a service systems perspective.

And again – Happy New Year 2011!

Many nations include growing their financial serivces sector as part of their national service innovation roadmaps (see figure page 2 of http://www.ifm.eng.cam.ac.uk/ssme/documents/080428ssi_us_letter.pdf).   These nations may find a recent article of special interest.   Hatzakis, Nair, Pinedo (2010) have created a truly comprehensive article on operations in financial service businesses – a real “tour de force” and significant contribution to the emerging area of service science.

I especially like the summary Appendix A table that shows where research has been done, and where little research is available.   The table maps the process realm (retail banking, commercial lending, insurance, credit cards, mortgage banking, brokerage/investment advisory, asset management) for each of the operational processes (acquisition/origination, current customer portfolio management, delinquent customer) and strategic processes (product design, service/process design).

Some extracts that especially resonated for me below:

Hatzakis, ED, SK Nair, ML Pinedo (2010) Operations in Financial Services—An Overview. PRODUCTION AND OPERATIONS MANAGEMENT
Vol. 19, No. 6, November–December 2010, pp. 633–664.

“We provide an overview of the state of the art in research on operations in financial services. We start by highlighting a number of specific operational features that differentiate financial services from other service industries, and discuss how these features affect the modeling of financial services. We then consider in more detail the various different research areas in financial services, namely systems design, performance analysis and productivity, forecasting, inventory and cash management, waiting line analysis for capacity planning, personnel scheduling, operational risk management, and pricing and revenue management. In the last section, we describe the most promising research directions for the near future.” (Pg 633);

“Financial services firms are an important part of the service sector in an economy that has been growing rapidly over the past few decades. These firms primarily deal with originating or facilitating financial transactions. The transactions include creation, liquidation, transfer of ownership, and servicing or management of financial assets; they could involve raising funds by taking deposits or issuing securities, making loans, keeping assets in custody or trust, or managing them to generate return, pooling of risk by underwriting insurance and annuities, or providing specialized services to facilitate these transactions.” (Pg. 633);

“There are several unique operational characteristics that are specific to the financial services industry and that have not been given sufficient attention in the general treatment of services in the extant literature. We list below a number of these unique operational characteristics and elaborate on them in what follows: Fungible products with an extensive use of technology, High volumes and heterogeneity of clients, Repeated service encounters, Long-term contractual relationships between
customers and firms, Customers’ sense of well-being closely intertwined with services, Use of intermediaries, Convergence of operations, finance, and marketing.” (Pg. 634);

“Service systems design has attracted quite a bit of attention in the academic literature. It is clear that service design has to be as rigorous an activity as product design, because the customer experiences the service first hand, much like a product, and comes away with impressions regarding the quality of service. Although the quality of service delivery depends on a number of factors, such as associate training, technology, traffic, neighborhood customer profile, access to the service (channel access), and quality of resource inputs, the service experience gets baked into the process at the time of the service design itself, and therefore a proper service design is fundamental to the success of the customer experience.” (Pg. 638);

“Many service firms are measuring success by factors other than profitability, using such factors as customer and employee loyalty, as measured by retention, depth of relationship, and lifetime value (Heskett et al. 1994). Chen and Hitt (2002), in an empirical study on retention in the online brokerage industry, found that ease of use, breadth of offerings, and quality reduce customer attrition. Balasubramanian et al. (2003) find that trust is important for online transactions, because physical appearance of branches, etc. no longer matter in such situations. Instead, perceived environmental security, operational competence, and quality of service help create trust. In general, service quality is difficult to manage and measure because of the variability in customer expectations, their involvement in the delivery of the service, etc. In general, there may be two different measures of service quality that are commonly used: the first refers to and measures the actual service provided (e.g., customer satisfaction, resolution, etc.), the second may refer to the availability of service capacity/ personnel (e.g., service level, availability, waiting time, etc.).” (Pg. 639);

“Forecasting is very important in many areas of the financial services industry. In its most familiar form in which it presents itself to customers and the general public, it consists of economic and market forecasts developed by research and strategy groups in brokerage and investment management firms. However, the types of forecasting we discuss tend to be more internal to the firms and not visible from the outside.” (Pg. 640);

“Organizations, households, and individuals need cash to meet their liquidity needs. In the era of checks and electronic transactions, an amount of cash does not have to be in physical currency, but may correspond only to a value in an account that has been set up for this purpose.” (Pg. 645);

“Physical cash, i.e., paper currency and coins, remains an important component of the transactions volume even in economies that have experienced a significant growth in checks, credit, debit and smart cards, and electronic transactions. Advantages of cash include ease of use, anonymity, and finality; it does not require a bank account; it protects privacy by leaving no transaction records; and it eliminates the need to receive statements and pay bills. Disadvantages of cash include ease of tax evasion, support of an ‘‘underground’’ economy, risk of loss through theft or damage, ability to counterfeit, and unsuitability for online transactions.” (Pg. 646);

“In financial services, in particular in retail banking, retail brokerage, and retail asset management (pension funds, etc.), queueing is a common phenomenon that has been analyzed thoroughly. Queueing occurs in the branches of retail banks with the tellers being the servers, at banks of ATM machines with the machines being the servers, and in call centers, where the operators and/or the automated voice response units are the servers. These diverse queueing environments turn out to be fairly different from one another… ” (Pg. 647);

“An enormous amount of work has been done on workforce (shift) scheduling in manufacturing. However, workforce scheduling in manufacturing is quite different from workforce scheduling in services industries. The workforce scheduling process in manufacturing has to adapt itself to inventory considerations and is typically a fairly regular and stable process. In contrast to manufacturing industries, workforce scheduling in the service industries has to adapt itself to a fluctuating customer demand, which in practice is often based on non-homogeneous Poisson customer arrival processes. In practice, adapting the number of tellers or operators to the demand process can be done through an internal pool of flexible workers, or through a partnership with a labor supply agency (see Larson and Pinker 2000).” (Pg. 649);

“Operational risk in financial services started to receive attention from the banking community as well as from the academic community in the mid-1990s. Operational risk has since then typically been defined as the risk resulting from inadequate or failed internal processes, people, and systems, or from external events (Basel Committee 2003). It covers product life cycle and execution, product performance, information management and data security, business disruption, human resources and reputation (see, e.g., the General Electric Annual Report 2009, available at www.ge.com).” (Pg. 651);

“Financial services organizations expend serious efforts and resources on pricing and revenue management. Applications are diverse; they include the setting of: (i) interest rates (APR) on deposits and credit products, (ii) trading commissions, (iii) custody fees, (iv) investment advisory fees, (v) fund fees (which for hedge funds can be a function of assets and performance), and (vi) insurance policy premia. Pricing and revenue management are intertwined with many operations management functions in large financial services firms, because pricing strongly affects consumer demand for products and services, and customer attrition. Complicated pricing mechanisms can increase the volume of billing questions to call centers. All of these can have significant implications on how these products and services are best delivered (e.g., capacity issues, quality issues) as well as on cash (inventory) management.” (Pg. 653);

“In this paper, we have attempted to present an overview of operations management in the financial services industry, and tried to make the case that this industry has several unique characteristics that demand attention separate from research in services in general. We have identified a number of specific characteristics that make financial services unique as far as product design and service delivery are concerned, requiring an interdisciplinary approach. In Appendix A, we provide an overview table of the various operational processes in financial services and highlight the ones that have attracted attention in operations management literature. From the table in Appendix A, it becomes immediately clear that many processes in the financial services industries have received scant research attention from the operational point of view and that there are several areas that are worthy of research efforts in the future. These include each step in the financial product and service life cycle as well as in the customer relationship life cycle.” (Pg. 656);

Finally, I am keen to see what new financial instruments exist that might allow for buildings to be re-constructed every so many years… for example, luxury hotels may benefit from frequent reconstruction (see slide #25 in http://www.slideshare.net/spohrer/icsoc-20101208-v2, and the URL from the slide may be of interest in comparing asset management in luxury hotels to asset management in financial operations: http://www.youtube.com/watch?v=Hm7MeZlS5fo — some similarities dealing with a casino 🙂 ).  Recently, trying to come up with important KPI’s (Key Performance Indicators) for cities, I started researching what the service life of an average building is — what I found so far is surprising — the half-life of an average building’s service-life span is about the same as the average life-span of a person in the US, around 75 years – moreover, while technology is increasing the average life span of people, it appears to be decreasing the average life-span of buildings (more modern building materials are correlated with shorter life spans of buildings)… an interesting observation I think which can be generalized to other human-made things that are part of service systems benefiting from good ROI on investment in the technologic infrastructure supporting the service system:  http://www.softwoodlumber.org/pdfs/SurveyonActualServiceLives.pdf

Investing in run-transform-innovate of service systems will require new types of financial instruments, new processes in financial service businesses, and perhaps even new types of financial service businesses.

Creating an undergraduate minor in SSMED:
Service Science Management Engineering and Design

Today’s undergraduates face new challenges upon graduation. Employers want and expect more. Global markets and competitors are one factor. They create an unrelenting pace of change and the so-called “innovation imperative.” Students seeking employment today need more than depth in one academic discipline.  To be most successful, students must be able to problem-solve and communicate on teams that span multiple disciplines and cultures. In addition, they must be self-directed life-long learners with experience working on real-world challenges.

In response to these new demands on undergraduates, the traditional discipline majors are making changes and experimenting with accomodations that bridge silos of knowledge.  For example, schools of science have begun offering business-oriented minors and adding Professional Science Masters (PSM) programs at the masters level, engineering schools have begun offering business minors (e.g., engineering management, engineering economics, etc.), management schools have begun offering engineering minors and creating some new discipline (e.g., management of technology, management of innovation, etc.), schools of social sciences and public policy have begun customizing courses for integration into both engineering and business schools, as well as creating some new minor (e.g., social networks and complexity sciences, technology and public policy, etc.), information schools have also arisen using design as an integration focus for technology, business, and social sciences (e.g., i-schools, d-schools, etc.). Even in the schools of professional studies and vocational schools, such as medicine, nursing, law, education, government administration, greentech, search engine marketing, smart phone application development, web service and cloud application development, game design and the arts, and many other niche professional and vocational training programs, the new imperative is to show both depth and breadth (ability to communicate and work on diverse teams to solve real-world challenges in a timely and cost effective manner, often with global collaborators, while maintaining a pipeline of future projects).

Nevertheless, the bottom-line choice remains the same, what major and minor will best prepare today’s undergraduates for a brighter future tomorrow? Whether they are making the choice to follow their passion, enhance their existing areas of strength, to maximize long-term security, or attempting to quickly reach financial independence and retirement, today’s undergraduates have more options than at any time in the past.  In fact, some students and their parents have even begun to question the necessity of a college education, though pay surveys for age groups later in life still show an advantage for those with higher educational degrees.  Furthermore, at the national level, more of the population with relevant college degrees is correlated with higher GDP levels, so nations have a strong incentive to improve the innovation capabilities of their next generation of undergraduates.

Academic institutions are responding by offering more choices for majors and minors, providing incentives for faculty from different areas to offer courses that span silos, more options for semesters abroad, and working with industry to offer more capstone projects and internship opportunities.

Industry and even government institutions are responding by offering both more capstone project and internship opportunities, but also allowing their employees to spend time in academic institutions helping to prepare undergraduates as guest lecturers, adjunct faculty, and as mentors.

How is a minor in SSMED different from other minors?

In light of all these changes, how is a minor in Service Science Management Engineering and Design (SSMED) different from a business minor for engineering students, or a technology minor for management students? An SSMED minor differs in two fundamental ways from the existing patchwork approach to existing minors: (1) practical focus on service innovation (as integrative with and complementary to product and process innovation, for both entrepreneurial and large private and public enterprises), and (2) theoretical foundation in a comprehensive, globally integrated, service-oriented world-view (the growth of service, customer-focus, local system operations and global system transformations). In short, SSMED prepares undergraduates to be practical innovators (relevance) who understand global systems change (rigor) – graduates who know how to act local, and think global.

Students graduating with an SSMED minor will understand the following and more:

1. Why has the portion of service revenue been increasing even in manufacturing companies?
2. Why are many cities, states, and national governments cutting back public services and facing growing budget deficits?
3. How have search engines, social networks, and smart phones increased opportunities for service innovation?
4. How have green tech, GHG emission markets, and sustainability concerns increased opportunities for service innovation?
5. How have emerging markets, developing economics, and an aging population increased opportunities for service innovation?
6. How has cloud computing, business analytics, on-line gaming increased opportunities for service innovation?
7. What are the implications of the growing number of freelancers and individual proprietorship businesses on the global economy?
8. What are the implications of the growing number of self-service systems in the world?
9. How do service innovation methods relate to and work to enhance traditional product and process innovation methods?
10. Why do technological advances, especially information and communication technologies, increase service innovation opportunities?
11. How are academic disciplines related to each other, and what are the best ways to work on teams with people from multiple disciples?
12. How are different types of jobs and professions related, is there a “big-picture systems-view” to be understood?
13. How does outsourcing and offshoring impact the globalization policies of national governments and strategies of business firms?
14. How can service-oriented architectures in government and business make enterprises more adaptable?

In short, an SSMED minor is different at a practical level, with a focus on improving innovation capabilities as well as a theoretical level, with a focus on improving understanding of a comprehensive, integrative model of global systems change across all sectors of the economy. This would be a huge undertaking if it were not for the systems-disciplines matrix, which is at the core of SSMED and provides a way for students to visualize the scope of SSMED. As the system-discipline matrix makes its way into K-12 education over time, the SSMED minor will become deeper and deeper. The key to solving the problem of “too much to teach” lies in starting earlier and earlier with a comprehensive world-view for understanding global system change.

Systems-Discipline Matrix: See slide #17 in the presentation at http://www.slideshare.net/spohrer/icsoc-20101208-v2

Will SSMED ever become a major on its own?

Yes probably someday, but for most institutions rushing to create an undergraduate major at this time is not advised for several reasons. First and foremost, most employers would not recognize the major and therefore this would create confusion. At this stage, it is better for undergraduates to have a well-recognized major degree, and a minor in SSMED. Second, service science at the masters and doctoral level is very new, and until the field matures and is able to graduate a sufficiently large number of doctoral students qualified to be undergraduate faculty who can begin to create expanded undergraduate curriculum and textbooks, it is simply too early. PhD’s are not produced any faster today than they were created fifty years ago, so the process of creating the pool of faculty will take roughly another decade. Third, just as computer science as a separate discipline took about 30 years to be established, and depending on growing availability of computing systems, service science as a major is likely to depend on the creation of new tools for simulating service systems. Without a unique tool (service system modeling and simulation tool), it is unlikely that service scientist can successfully form a profession differentiated well from existing professions, such as business consulting.

Fourth, there is plenty of work to do at the undergraduate level in establishing an excellent minor that can work for NEARLY ALL existing majors within engineering, management, social sciences, professional studies, etc. For example, the job of establishing SSMED as a rigorous and relevant minor for engineering and management degree majors is a doable short-term challenge and a useful step in the right direction to achieve a longer-term goal of a separate SSMED undergraduate major.

In sum, service science as an undergraduate major is not advised, until there are more graduate level programs, more faculty, more textbooks, better tools, and more professionals who see themselves as practicing their profession as service scientists. Service science has the potential to become a separate discipline and profession that helps accelerate innovation and learning between service system entities, be they businesses, universities, hospitals, cities, or even nations – all viewed a complex sociotechnical systems – or service systems that are both providers and customers of service offerings within networks, or an ecology of such systems. Of course, pioneers have already experimented with undergraduate service science-related majors, and these experiments should be closely watched for best practice methods to incorporate into SSMED minors.

What is the top challenge in creating an SSMED minor?

The top challenge is “too much to teach.” One view of an SSMED minor is that it attempts to integrate all minors (e.g., engineering, management, social sciences and public policy, technology and information systems design, etc.) within themes of service growth and innovation as well as global service system change and service network dynamics.   Service innovation is an important unifying theme today in trying to understand global change.

The solution is “T-shaped professionals.” T-shaped professionals are deep in their major, and have in essence multiple minors across the major schools that exist at universities, schools of management, engineering, social sciences, information schools, professional schools, etc.   Make no mistake, I-shaped, H-shaped, Pi-Shaped, and many other shapes are also needed, but the trend overall is for more T-shaped (without sacrificing deep problem solving skills, and adding the breadth of complex communications skills).  On the job experience, transforms I-shaped into T-shaped professionals, so what can academia do to accelerate T-shaped learning – this is what employers want.

Furthermore, in order not to dilute the major, there are just two options (1) add more time (e.g., add a fifth year, more hours of instruction per week, etc.), (2) teach more efficiently (e.g., add more self-guided on-line instruction, take advantage of common content in different schools, use real-world challenges projects to accelerate learning, repackage existing content in more efficient conceptual frameworks, etc.). Both of these are good options and can be explored separately or in parallel.

Most SSMED programs follow to some degree the 50-and-five-10’s rule, meaning 50% of the content taught is the major degree program (e.g,, operations management, marketing, industrial engineering, management of information systems, computer science, etc.) and 50% comes from five component areas:

1. 10% engineering/math-science degree content
2. 10% business/management content
3. 10% social sciences/humanities/public policy content
4. 10% information school/design content
5. 10% capstone and real-world challenge project s(e.g., local small firm, global large firm semester aboard, etc)

For example, the major may be taught in four years and a fifth year added for the SSMED minor that covers the five-10’s in the context of service innovation (see below). Alternatively, the five-10’s could be constructed as an on-line self-paced minor that students must complete in the four years while completing their undergraduate major.

What service innovation content already exists?

The material for the five-10’s component of the SSMED minor can be drawn from many sources, including the following:

1. Operations Management (engineering and management)
Fitzsimmons, JA. and MJ Fitzsimmons (2007) Service management: Operations, Strategy, Information Technology. 6th Edition, McGraw-Hill Irwin, New York, NY.

2. Marketing (management – though analytics is adding more engineering and math)
Zeithaml, VA, MJ Bitner, DD Gremler (2006) Services Marketing: Integrating Customer Focus Across the Firm. 4th Edition. McGraw-Hill Irwin. New York, NY.

3. IT Service Management (engineering, management, information/design)
Hurwitz J and R Bloor M Kaufman F Halper (2009) Service Management For Dummies. Wiley. Hoboken, NJ..

4. Engineering Management (engineering, management, information/design)
Chang CM (2010) Service Systems Management and Engineering: Creating Strategic Differentiation and Operational Excellence. Wiley. Hoboken, NJ.

5. Service Supply Chain (engineering and management)
Dischinger, JS (2010) Personal communications. URL: http://www.tliap.nus.edu.sg/tliap/LES/SvcSCM/Apr2009.aspx

6.. Professional Service Business Management (engineering and management)
Ricketts JA (2007) Reaching The Goal: How Managers Improve a Services Business Using Goldratt’s Theory of Constraints, IBM Press.

7. Operations Research (engineering and management)
Daskin, MS (2010) Service Science. Wiley. Hoboken, NJ.

8. Social Sciences: Economic Geography (social sciences)
Bryson, J, P Daniels, B Warf (2003) Service Worlds: People, Organisations, Technologies. Routledge, London, UK.

9. Information Systems (as Work Systems and as Service Systems) (management and information/design)
http://www.stevenalter.com/web/Welcome.html
Alter. S (2006)The Work System Method: Connecting People, Processes, and IT for Business Results. Work System Press, Larkspur, CA.
Alter, S (2002) Information Systems: Foundation of E-Business (4th Edition). Prentice Hall.

10. Unified Service Theory (management)
Sampson, SE (2010) The Unified Service Theory: A Paradigm for Service Science. Handbook of Service Science, Editors Maglio, Kieliszewski, Spohrer, Spring, New York, NY. 107-132.

Much more is coming, and in the process of being created. Hundreds of universities already teach service science related courses and programs, so there is a growing community and body of research, practice, and curricular content to draw on in establishing an SSMED minor. For example, the “Handbook of Service Science” is available from Spinger Publishing, and contains a wealth of pointers to existing materials.

What jobs will undergraduates get when they have an SSMED minor?

The same jobs as other graduates with the same major degree, but the undergraduates with SSMED minors willl be (1) better innovators able to understand and enhance service value for and with customers, (2) better communicators on team projects requiring multiple disciplines to collaborate, and (3) better life-long learners with a framework for organizing new disciplinary knowledge about service systems. Employers are coming to appreciate an SSMED undergraduate minors, as they look to hire employees with interdisciplinary skills, able to work on real-world challenges, and better prepared to be innovative global citizens with excellent communication, problem-solving, and life-long-learning skills.

Students with a major in computer science, industrial engineering, systems engineering, management of information systems, economics, organizational design, human resources management, technology management, political science, policy management, or other standard majors that are hired into high-tech, high-talen service businesses (which are now everywhere) — the graduates with well-know majors would be especially attractive to industry if they also had a minor in SSMED based on the material above. The T-shaped professional has deep problem solving skills in the area of their major, and has broad communication skills across all areas of an SSMED minor. There is simply too much redundancy in the the material above, so creating an on-line SSMED minor that could combine “the best of the best” with a standard major, would in fact be a tremendous breakthrough in instruction.

A good place to start: Determine which of your academic institution’s existing degree programs are in most demand from industry, and survey those employers (e.g., their hiring professionals and recruitment teams) to see “what is the value add for an SSMED minor” over and above the well-known standard major. If the employers are unfamiliar with SSMED, which is likely, then ask the employers instead the following questions. How important (1 not important) to 7 (very important) the following characteristics are to them when they hire undergraduates: (1) communication skills and ability to work in teams, (2) experience working on real-world challenges, (3) technical skills in the area of their major, (4) ability to find solutions that make both technical and business sense, (5) ability to work on global projects with team members from multiple cultures, (5) ability to innovate and create new solutions, (6) sales skills and persuasiveness, (7) ability to use the latest technology in finding solutions to improve internal processes and solve customer problems, and (8) self-directed learning and life-long-learning skills. If their responses total over 32, then it is likely an SSMED minor would add value to the existing major. On the other hand, if their responses total less than 32 it is unlikely that an SSMED minor would add value and accelerate hiring decisions. Furthermore, if universities develop SSMED minors without first surveying those hiring their students, then they risk missing the mark in the programs they create.