IT & The Service Economy

มนู� อรดี�ดีลเชษฐ์�ประธานูกรรมการนูโยบาย ICT

มหาวิ�ทยาล�ยศร�ปท�มJuly 18, 2009

Agenda

• Service-based technologies VS Service-based businesses

• A reference architecture of SOA• The trend toward the Service-oriented economy• The Service-oriented economy needs a “Service

System” and “Service Innovation”• IT & The Service Economy => the new opportunity

Service-based Technologies VS Service-based Businesses

• SOA is a new way of thinking about processes that reinforces the value of reuse of information and creates business value

• Service-oriented technologies have created the basis for agility so that companies can deliver new, more flexible business process that harness the value of the services approach from a customer’s perspective

Service-based Technologies VS Service-based Businesses

• Service provision has been defined as an economic activity that does not result in ownership and is claimed to be a process that creates benefits

• Service Science is an interdisciplinary approach to the study, design, and implementation of services systems – complex systems in which specific arrangements of people and technologies take actions that provide value for others

Service-based Technologies VS Service-based Businesses

• What value will a science of services and business process modeling offer to the firms that adapt them?

• How should changes in the business side (more service oriented) influence the composition of information systems (more SOA content), and vice versa

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The SOA reference architecture source: IBM

Data Architecture &

Business Intelligence

QoS, Security, M

anagement &

Monitoring Infrastructure Service

Custom Application

Packaged Application

Packaged Application

Custom Application

consumers

business processesprocess choreography

servicesatomic and composite

service components

operational systems

Business Driven

IT Driven

OO Application

Portlet WSRP B2B Other

Integration (Enterprise Service Bus approach)

Governance

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The SOA reference architecturesource: IBM

Data Architecture &

Business Intelligence

QoS, Security, M

anagement &

Monitoring Infrastructure Service

Custom Application

Packaged Application

Packaged Application

Custom Application

consumers

business processesprocess choreography

servicesatomic and composite

service components

operational systems

Business ConcernsICT Concerns

OO Application

Portlet WSRP B2B Other

Integration (Enterprise Service Bus approach)

Governance

ระบบงาน Student Service App และ Other Legacy Systems

Design a set of business processesWith a set of services

เชื่� อมต่�อโดยกลไกของ SOA

• “There are no such things as service industries. There are only industries whose service components are greater or lesser than those of other industries.”

Theodore Levitt, 1972 Father of “Globalization”, was the editor in chief of Harvard

Business Review

• The 80’s, quality revolution created immeasurable economic value

• The 90’s, the quality principles were adapted for application to white-collar processes, business process engineering

• The 2000s, innovation has become the transformative business discipline of the service-era

We need a service system

• A service system (or customer service system, CSS) is a configuration of technology and organizational networks designed to deliver services that satisfy the needs, wants, or aspirations of customers

• Service systems are dynamic configurations of people, technologies, organizations, and shared information that create and deliver value to customers, providers, and other stakeholders

The Internet as the key distribution channel

• If IT is the factory of the services, then the Internet is the trucks and roads

• The Internet is used to directly create innovative new services, or to reconfigure their value chains

The Business Value Chain

There are two perspectives1. Based on the firm’s competencies; it is

called the “Inside-out perspective”• This is the traditional understanding of value

chains• We look upon the assets and/or core

competencies a firm has and what products or services can a firm produce with them

The Business Value Chain

2. Based on the concept of customer-centric; it is called the “Outside-in perspective”

• We aim at serving customer’s needs• How a firm can construct new business models

or a new ecosystem of partnerships or external relationships to deliver the services/products to customers

The Inside-out Perspective

Process Offering

Innovation Process

Core Process

Service System

Product/Service Performance

Customer Service

How a company organizes to support innovation

Proprietary processes that add value

Basic features, performance, and functionality

Extended system that surrounds an offering

How you service your customers

Source: “Seizing the white space”, Tekes, 2007

The Outside-in Perspective

Delivery Finance

Channel Brand Business Model

Customer Experiences

Value Network

How you connect your offerings to your customers

How you express your offering’s benefit to customers

How you create an overall experience for customers

How the enterprise makes money

Enterprise structure and value chain

Source: “Seizing the white space”, Tekes, 2007

The New Opportunity

• Service business model is still evolving while ICT technologies are still the moving target– Customers are hard to catch up– The gap of knowledge leaves room for the

professionals, but must be the T-shape professionals

– Service-oriented technologies are definitely the foundation technologies supporting the Service Economy

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Current environmentServices clients perceive that the service provider is here on the learning curve ...

The services opportunity is the delta in knowledge and capability.

... while they are still here.

{

Generations of technology and evolving business models supersede each other at an increasingly rapid rate.

The New Opportunity

• The IT service business depends on rapid acquisition and deployment of knowledge

• The services business is a knowledge business;– method is captured, reusable knowledge

• Expertise and capability is at the heart of the services business, but profitability is dependent on leveraging assets, expertise and innovation.

• Client businesses are evolving rapidly into virtualized, componentized, and hybridized business ecosystems.

The Based Capability• Every services situation is unique

– if one studies individual situations we can see patterns emerge

– These patterns are the points of opportunity to create methods that can increase capability in providing service

• In order to capture these patterns one needs to be able to bridge multiple areas of knowledge. We call this situation “based capability”

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Methods play a key role in a services business

Situation applicability

Method component

Workdescription

Outcome description

Outcome instance

A complete capability includes both assets and expertise.

Product information

Technology concepts

Experience

Conclusion

• The advancement of the Service-oriented technologies (such as SOA) definitely has significant influence on the development of the Service-oriented businesses

• But we still do not quite understand the relationship between the service economy and the current IT technologies which support them

• What challenges the businesses face in regarding technology and information that support them