Companies with an eye for the future are turning their focus to the emerging field of Services Sciences. This is an interdisciplinary approach to the study, design, and implementation of services systems made up of people and technology to create and deliver value.
The services sector makes up 70 to 80% of GDP in advanced economies, with services accounting for over 80% of employment here in the UK. In short, up to approximately 75% of wealth in industrialised countries is created not by growing food or making things, but by performing services: teaching, designing, delivering health care, banking, retailing, consulting, delivering IT services and so on.
A service process is a series of unique states involving the co‐production of the provider and the consumer. Each “transaction” is a new product in itself, and the customer is a co‐producer of the value rendered.
Too often, when we think of a service process, we think of what the provider must do, but such thinking results in frustration for the customer – who will defect in an instant. When we think of service processes, think of the customer as a co‐producer of value. Think of migrating from transaction chains to information chains, and then on to knowledge chains (or peer‐to‐peer knowledge webs to be more precise). Moreover, think about the Cloud and Cloud computing technologies. The automation of business processes is a key enabler of the Cloud phenomena.
All of the thoughts and ideas around quickly assembling Cloud‐centred applications to support business services simply won’t happen without process technology. An intrinsic part of the Service‐Oriented Enterprise is “Process on Demand”, which means having the capability to call up Services when needed to change or augment a process that is already being executed.
By taking service process management into the Cloud, services from multiple knowledge sources can be delivered with maximum flexibility and adaptability to meet the requirement that “most services must be customised.” On‐demand service processes aren’t sequenced as in many traditional workflow systems. In contrast they are asynchronous and peer‐to‐peer, with the high‐level process providing the choreography.
Let’s turn our attention to the very core issues of providing services. When it comes to service forms of business processes, they reside in the domain of human‐to human interactions. That is to say, services processes cannot be predefined or “flowcharted” in advance. In short, such collaborative human processes are “organic.” They represent “emergent processes” that change not only their state, but also their structure as they are born, and then grow and evolve. Such processes deal with case management and each service renders a unique process instance centred on human to human interactions.
We’ve already discussed open innovation in the previous blog on The Innovation Economy, but nowhere is the concept more vital than in delivering services. Let’s turn to an example of “open services innovation.” Think “prosumer”(producer–consumer) and the coproduction of value. The role of producers and consumers begin to blur and merge. Giants from Coca‐Cola to Wal‐Mart Stores have tried to set up Web sites where customers can share their interest in the brand. But many of these sites don’t attract enough visitors to form a real community or have been slammed by critics.
However, Intuit, a UK small business accounting software provider, seems to have figured out a way to benefit from social media. Rather than inviting the whole world, Intuit funnels only diehard users of QuickBooks to a site where they can exchange truly helpful information. For customers, that means quicker answers to problems. For the company, this volunteer army means less need for paid technicians.
Intuit chose this ‘narrowcast‘ approach after it heard what was going on at the Web site of its popular TurboTax product. Customers were not only asking technical questions, they were often outshining Intuit’s own tech support staff by answering 40% of the queries themselves.
This approach is ingenious in the sense that the only people that can contribute are those that really have had actual exposure to and used the product first hand. However, by inviting the public to a truly open forum where the advice may or may not apply, a company can hurt its reputation or that of its product if a customer continuously subjects themselves to incorrect or inconsistent tips and advice. Therefore mob‐rule constructionism must be managed carefully to ensure a company’s reputation is not damaged by incorrect information.
Services innovation has to be treated as an organic process, where value is co-produced by the consumer. It is not something which can be predefined or mapped out, but instead businesses must have the capability to call up services as and when they are needed. Each service requires a unique process instance centred around human to human interactions, and by utilising the cloud businesses can deliver these services with maximum flexibility and adaptability, to meet the demands of the customer.
