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Service Innovations 2
Wednesday, November 17, 2004
IBM Almaden Research Center
Service Innovations for the 21st Century
November 17-18, 2004

Jim Cortada
IBM Global Services

author of 50 books. Has been working on a 3-book series on the role of technology over the last half century

Past -- Present -- Future
all businesses are in the services business. Some just don't realize it. Services have been, are, and will continue to be vitally important. In the factory, fewer than 10% are bending metal.

All industries implement new services incrementally but continuously, borrowing from fellow companies and other industries. It's evolution, not revolution.

Speakers will have seven minutes to make a presentation. After half a dozen iterations, we'll open up to Q&A.

Tom Hein, John Deere. Plows to tractors to construction equipment, to credit ('58), healthcare ('85), and tech services ('98). Well diversified. * * * Deere offers a GPS-based reference signal that enables a farmer to position a piece of equipment within 3 cms. * * * Ag market: industrial farming and "recreational farming" (where they do it for fun: the only growth sector). * * * Business process optmization, moving innovation through established channel * * * Future needs: repeatable process for designing and implementing services.

Bill McAllister, Siemens Power Generation. 1998 acquired Westinghouse Power Generation BU. Heavy manufacturing. What's new here? The first power plant was in 1885; probably the service plan for that plant was their second sale. Bill wonders if he's just here to explain to the adolescents in the IT marketplace how a mature industry operates. Service innovation is a major focus in Bill's business.

Alec McMillan, Rockwell Automation. Automation standards and conformity. Once created, standards never go away. Think about government as a partner.

Surinder Prakash, IBM. Best practices. GE, Siemens, and IBM all focused on services from the top. Service Evolution is from traditional product to product-related services and finally to services innovation. Need execution: The Paper Jam at Xerox Gets Worse. It's all about the customer. You've got to have the skills. A robust deliver infrastructure. Solution companies are not built in a day. Execution, Execution, Execution.

Scott Matthews, The Boeing Company. Structured flexibility and management leverage: value capture with real options. Real Options. The right to start, stop, or modify a business activity at some future time. Contingent -- do what is right at the time. Options are valuable because they provide access to significant upside potential while containing downside losses.

Christian Crews, Pitney Bowes, Futures Strategy. Jim Collins, "Some of the most amazing inventions in history are not technology or products; they're social innovations." We're beyond the services economy; we're in the experience economy. Ray Kurzweil: The law of accelerating returns. Industry creation to Product Era to Service Era to Business Process Era. (Check this chart on the follow-on slides.) "We're moving to becoming experts in our customers' business so we can help them help their customers." Dator's Law: Any useful statement about the future should seem ridiculous.

A question about the impact of Service Oriented Architecture was answered by responses about the web ("We can't afford to have someone hack a power generating plant.") This strikes me as old-school thinking.

Providing the best solution probably requires more than one supplier. SOA is the road to providing joint solutions in real time. Yet Boeing, Siemens, and Deere reply with "we," as if their company is the sole provider.


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