5th Science Service Forum - 2009
The 5th Service Science Forum was held on September 17th 2009. Hosted by IBM at their London Southbank offices, the forum brought together 20 delegates from a diverse range of service industries including defence, consultancy, finance, engineering and public service.
For those whom are new to the Service Science Forum initiative, the forum sets about to bring together practitioners from government and organisations interested to understand and grow service businesses, and address the challenges faced in service innovation. Service has seen increasing attention in government policy and research agendas in recent years and rightly so. Services now dominate economic activity, accounting for around 70% of aggregate production and employment in the UK. However, the growth of the service sector is changing the nature of the organization, and it is becoming apparent that there is a lack of research and knowledge in service innovation. As a consequence the ability of firms based in the UK to develop and maintain leading positions in highly competitive and globalised service industries is under threat.
The focus of the 5th Service Science Forum was innovation in services. Represented at the forum were practitioners from UK organisations including Rolls Royce, Selex Galileo, Atkins, Lloyds TSB Cardnet and CapGemini
Presentations and Breakout Session
After a brief introduction by Professor Roger Maull and Professor Irene Ng, the 5th Service Science Forum opened with presentations from four of the forum’s delegates; Host Charles Loving, of IBM UK; Terry Mahoney of Selex Galileo; Keith Bissett of Bourton Group and Nigel Leacock of Lloyds TSB Cardnet. Each presented their personal take on innovation in services and its outlook for their respective industries.
Professor Irene Ng wrapped up the delegate presentations with a discussion of the ‘Henderson-Clark model’ of architectural Innovation* and its relation to innovation in services. Professor Ng recognised from the delegate discussions a need to move away from component innovation in services, which creates an improvement in the capabilities of the individual components in a system, and is responsible for such innovations as more powerful processors in computers. The suggestion was made that services should move towards architectural innovation, which creates an improvement in the ways in which components, at least some of which may not in themselves be innovative, are put together. For example, flexible manufacturing systems and networked computer systems. The point was made that it is architectural innovation which is more radically driving innovations for delivering value in use. Delivering superior customer value has long been acknowledged as a primary source of competitive advantage. This value is perceived and determined by the consumer on the basis of “value in use” and so the delivery of superior utility is an important competitive lever for organisations.
In a breakout session participants formed four smaller groups to discuss what knowledge might be useful for promoting innovation and suggestions of prevalent issues for future research agendas on innovation in service. The following issues were raised:
- The nature of end user value, particularly;
- How to assess/measure what customers value services for (i.e. functions/benefits)
- Whether or not levels of end user value be used for differential pricing
- Whether or not there is substantial benefit for producers in delivering ‘value in use’
- Whether it is possible to develop use/value models for individuals, which can be used in practice
- Several difficulties were also acknowledged including issues in assessing end user value given that customers themselves may not be aware of their true value for an offering.
- It was recognised that the development and collaboration of T-shaped people are important for innovation
- It was also recognised that it is organisations that often impede innovation through their rigidity and bureaucracy. As such organisations need a better understanding of the following:
- Social networks, cottage industries, and flexible workforces
- Delivering value in dynamic service environments
- Systems, in particular evidence of business models working in the wider system
- With firms transforming from material to information intensive, smart systems are required in order to collate and analyse dynamic data
- Optimal service design
View the proceedings of previous forums:
*More information regarding the Henderson-Clark architectural innovation model can be found in the following journal article: Henderson, RM. and Clark, KB. (1990) ‘Architectural Innovation: the reconfiguration of existing product technologies and the failure of established firms’, Administrative Science Quarterly Vol. 35, 1990.