Towards a Smarter Planet: Sensors, Complex Service Systems & Service Science

Steve Street IT Architect, UKI New Business, IBM

Towards a Smarter Planet: Sensors, Complex Service Systems & Service Science ..

Service Science and Innovation Doctoral Colloquium 22-23 March 2010, Staffordshire University Goal

Talk about the ‘Smart Planet’ initiative, what it means and why it’s significant Talk about its connections to ‘Service Science’, why Service Science is important Discuss the current state of play for ‘Service Science’ ..and how we make the ‘Smarter Planet’ connection

40 - 70 percent of electrical energy is lost due to inefficiencies in the grid.

In one small business district in Los Angeles alone, cars burned 47,000 gallons of gasoline just looking for parking.

Consumer products and retail industries lose about $40 billion annually due to inefficient supply chains.

In a world where 820 million people are undernourished, $48 billion worth of food is thrown away each year in the US.

Our healthcare “system” can’t link from diagnosis to drug discovery, providers, insurers, employers and patients.

Financial markets spread risk but can’t track it; this has led to undermined confidence and uncertainty.

4 © 2009 IBM Corporation Here in UK …. £2.5 Billion Wasted in energy bills by UK companies due to inefficiencies such as draughty windows and leaving lights and computers switched on £7-8 Billion Estimated annual cost of road congestion to the UK economy year 8 months Reduction in life span for a UK citizen due to poor air quality 1 Third Amount of purchased food UK 76% consumers throw away Apples consumed in the UK that come from overseas traveling on averageSource: 370 Carbon0 miles Trust, to www.Energysavingtrust.org reach us © 2009 IBM Corporation ‘Human Problems’ – What is Progress ?

‘What is Progress ?’

The world is SMALLER.

The world is FLATTER.

The world is about to get a whole lot SMARTER.

30 billion 1 billion 85% By 2010, 30 billion RFID By 2010, there will be more Nearly 85% of new tags will be embedded than 1 billion camera phones automobiles will into our world and across in existence. contain event data entire ecosystems. recorders by 2010.

Instrumented Interconnected Intelligent

2 billion 4 billion 1 trillion There will be an estimated There are an estimated Soon, there will be 1 trillion 2 billion people on the 4 billion mobile phone connected devices in internet by 2011. subscribers worldwide. the world, constituting an “internet of things.”

Instrumented Interconnected Intelligent

Today, the processing power of the web is about equivalent to one human brain. By 2040, it will exceed the total processing power of all of humanity

Every day, 15 petabytes of new information are being generated. This is eight times more than the information in all U.S. libraries

80% of new data growth is unstructured content DATA INFORMATION

By 2010, the amount of digital information will grow to 988 exabytes (equivalent to a stack of books from the sun to Pluto and back)

Smart traffic Intelligent Smart food Smart Smart energy Smart retail systems oil field systems healthcare grids technologies

Smart water Smart supply Smart Smart Smart Smart cities management chains countries weather regions

Reducing the environmental impact of our energy production Environment and use – CO2 emissions, particulates and water usage

Curbing consumption growth and improving energy efficiency whilst increasing production in the face of scarce resources

Consumption Finance Engaging consumers and businesses in playing an active role in managing their energy production and use Regulation Replacing aging infrastructure and assets and rapidly maturing and scaling clean technologies to build a new, dynamic system

Changing financial mechanisms governing energy to provide efficiency incentives and improving return on “cleantech” Engagement Infrastructure Evolving regulation to cater for the changed shape of the industry and its increasing interconnection with other industries

© 2009 IBM Corporation The need, opportunity and mandate for smarter electricity are clear 32% 2016 47 GW Proportion of UK electricity to When UK electricity demand will 8 GW of new generation capacity come from renewable sources in exceed the capacity of present required to meet demand by 2020. 2020 to meet climate change power stations. 47 GW required to meet demand targets. and meet renewable generation New plants under construction targets. In 2007, only 5% came from only delay this date until 2020.(2) renewable sources.(1) Presently 9 GW under construction.(3) £100 47m 26% The amount, on top of inflation, The number of smart electricity Increase in generation if half of which an average annual and gas meters to be installed in Britain’s passenger cars were household electricity bill went up Britain’s homes by 2020. powered by electricity. by between 2004 and 2008 in Smart metering should help Meeting this demand through England and Wales. reduce domestic electricity nuclear power would require 10 This is a 44% increase in real demand by 2.3%.(5) new reactors.(6) terms.(4)

© 2009 IBM Corporation CEOs understand the challenge facing utilities in UK & Ireland Lack of Cost of Consumer investment capital debt 66% are not confident that the 91% believe that the regulator 68% are concerned that utilities necessary levels of investment may be over-optimistic in its will themselves be affected by made in water and energy in the judgement about the cost of ‘bad debt’ increasing among cash- next 5-10 years will meet future capital in the forthcoming pricing strapped consumers. needs. reviews. Reducing Smarter Government demand peaks technology led 60% believe smart networks 89% would like to see the ‘agenda 74% would like to see the UK would help smooth peaks in set’ for smart technologies, adopt the kind of Government-led demand and 55% believe it would including smart metering. investment now being made in the help allocate network capacity US. more effectively.

Reference: Market Force Survey for IBM, 2009 © 2009 IBM Corporation To deliver power more responsibly and more efficiently, energy and utilities organizations are working toward a smarter energy value chain.

TRANSFORMATION OF THE GRID Transforming the grid from a rigid analog system to a dynamic and automated energy delivery system.

ENERGY AND UTILITIES EMPOWERMENT OF REDUCTION OF CONSUMERS GREENHOUSE GAS Empowering consumers by EMISSIONS providing them with near Meeting stringent real-time, detailed information greenhouse gas about their energy usage. emissions targets while maintaining sufficient, cost-effective power supply.

CONSUMERS UTILITIES

Take advantage of variable Automatically monitor pricing by purchasing the health of the grid. electricity when it’s cheapest.

Remotely sense Generate their own damage to grid electricity and sell it assets and dispatch back to the grid. repair crews.

Decrease carbon Better predict demand emissions by choosing and manage supply clean electricity sources. accordingly.

Energy Flow Information Flow © 2009 IBM Corporation Smarter Electricity - REDUCTION OF GREENHOUSE GAS EMISSIONS Meeting stringent greenhouse gas emissions targets while maintaining sufficient, cost-effective power supply 16% Usage Pattern - IT - Data Centre Energy Efficiency Framework -

- Distributed Non-IT 24% 60% Strategy

People Information Products & Services Manage Reduce Supply Demand Measurement Devices - Gen 1 (ROM ~ ampsXvoltsX.6pf)

IT Property Operations

Gen 2

Gen 4

Gen 3

Stockholm implemented an intelligent To encourage citizens to use multiple modes toll system in the city center, which resulted of transportation and make it easier to align in 20% less traffic, 40% lower emissions the cost of transit with its impact on the and 40,000 additional users of the public environment, the Singapore Land Transport transportation system. Authority implemented fare management with smart cards that can be used to pay for buses, trains, taxis, road-use charging and parking.

‘SMS for Life’ – a pilot program in Tanzania under the ‘Rollback Malaria’ umbrella - is using simple – SMS based - technology to provide Medical Districts with accurate information for the first time re: stocks of necessary drugs

Unravelling and understanding complex systems is a foundation stone for SSME, from which better services concepts, implementation and management models and tools can be developed.

“People-Oriented, Services-Intensive, Market-Facing Complex Systems – complex systems and services – are very similar areas around which we are framing the very complicated problems of ..subject matter business and societal systems that we are trying to understand.” 22 © 2009 IBM Corporation – Irving Wladawsky-Berger, IBM VP Innovation (Oct. 9, 2006) So what’s the Connection to Service Science ?

‘Smart Planet’ is ..

Real New Problems Non-Transient – New Connections to new Value Systems / Problems of Expanding the ‘Problem Space’… Direct Interest to Business New Solutions That force a ‘multi- – Expanding the ‘Innovation Space’ dimensional’ approach to New Approaches solve them – Across the Board / Collaborative That need new ‘integrative’ New Techniques Skills – Business Analytics.. & offer the opportunity for new / ‘transdisciplinary’ techniques

..the opportunity to make a difference ..

The changing economic, political and business landscape makes service innovation an imperative.

Service innovation requires a better understanding of service systems, but the knowledge and skills required are not readily available.

Business, government and academia need to work together towards an interdisciplinary approach to research and education.

SSME is an urgent call to action to get more systematic about service innovation SSME is also a proposed academic discipline and the basis for a proposed new profession – the service scientist SSME is also a proposed research area, the study of service systems SSME is highly multidisciplinary and spans areas of science, engineering, and management To oversimplify: – Science is a way to transform data about service systems into knowledge – Engineering transforms the knowledge into new value – Management continuously improves the end-to-end value creation process and directs investment

..opportunity to build on success..

Cross-disciplinary programs and degrees

Fusing technical competency with industry-specific knowledge and business-process expertise

Success requires open collaboration Service Scientists: Adaptive Innovators among academia, government and industry Computer Science & Science Info. Systems Computer Computer Science & Science Info. Systems Computer Industrial and Systems Engineering Systems and Industrial Industrial and Systems Engineering Systems and Industrial Math and Operations Research and Math Operations Math and Operations Research and Math Operations Organizational Change & Learning Change Organizational Organizational Change & Learning Change Organizational Business Anthropology Business Business Anthropology Business Science andEngineering Science and and Engineering Science Economics and Social Sciences andSocial Economics Economics and Social Sciences andSocial Economics Business and and Management Business To transform how the pipeline of future skills is built

“Need l-shaped, T-Shaped people …” Stuart Feldman (Oct 6, 2006) So where is Service Science going ? One Theme ..

Changing Nature of STEM Education – 2 initiatives -

STEM STEM2D People

Science Natural Social Sciences Sciences

Technology Technology Technology (physical) (social) Business Service Technology Core Engineering Engineering Environment, Economics & Law Mathematic Mathematics Management Fundamental s Skills

Teach as Teach as a single integrated transdiscipline Four disciplines (2D = 2-Design improved SP service systems)

Universities as “Living Labs” / Connection Points – Industry / Academia …

Urban serving research Other cities university “tries out” innovations with urban serving that could improve the host city research universities inside connect and share innovations

Attempts to define Foundational Concepts -

Ecology Diverse types of entities: (Populations & Diversity) businesses, cities, etc.

Entities Interactions Outcomes (Service Systems) (Service Networks) (Value Changes)

Value Proposition Governance Mechanism Based Interactions Based Interactions

Access Rights Measures (Relationships) (Rankings) lose-win win-win lose-lose win-lose Resources Stakeholders (Roles) (Perspectives) Value cocreation is a possible outcome Spohrer, J. & Maglio, P. P. (2009). Service science: Toward a smarter planet in W. Karwowski & G. Salvendy (Eds.), Introduction to service engineering.

First foundational premise Physical Not-Physical of service science: Rights 1. 2. Service system entities People Organizations dynamically configure (access) four types of resources. No 3. 4. The named resource is Rights Technology/ Shared either Environment Information Physical or Formal service systems can contract Not-Physical Informal service systems can promise/commit (physicists resolve disputes) Trends & Countertrends (evolve/augment): The named resource has (feelings/patterns) Informal <> Formal (language/symbols) either (unmonitored) Social <> Economic (monitored) Rights (leaders/personal) Political <> Legal (laws/impersonal) or No-Rights (human) Cognitive Labor <> Computation (machine) (judges resolve disputes (human) Physical Labor <> Technology (machine) within their jurisdictions) (atoms) Transportation <> Communication (bits) (tacit) Qualitative <> Quantitative (explicit)

Second foundational premise Value propositions coordinate & motivate resource access of service science:

Stakeholder Measure Pricing Basic Value Service system entities Perspective Impacted Decision Questions Proposition calculate value from multiple (the players) Reasoning stakeholder perspectives 1.Customer Quality Value Should we? Model of customer: Do customers (Revenue) Based (offer it) want it? Is there a market? How A value propositions can large? Growth rate? be viewed as a request from

one service system to another 2.Provider Productivity Cost Can we? Model of self: Does it play to our (Profit) Plus (deliver it) strengths? Can we deliver it to run an algorithm profitably to customers? Can we continue to improve? (the value proposition) from the perspectives of 3.Authority Compliance Regulated May we? Model of authority: Is it legal? multiple stakeholders according (Taxes and (offer and Does it compromise our integrity Fines) in any way? Does it create a to culturally determined deliver it) moral hazard? value principles. 4.Competitor Sustainable Strategic Will we? Model of competitor: Does it put The four primary stakeholder Innovation us ahead? Can we stay ahead? (invest to (Substitute) (Market Does it differentiate us from the make it so) perspectives are: customer, share) competition? provider, authority, and competitor

Third foundational premise Competitor Provider Customer Authority of service science: S P C A

(substitute) The access rights associated with OO OO resources (customer’s and provider’s) LC LC are reconfigured by mutually SA SA agreed to value proposition PA PA value-proposition relationships change-experience dynamic-configurations Access rights time – Access to resources that are owned outright (i.e., property) – Access to resource that are leased/contracted for (i.e., service = value cocreation rental car, home ownership via mortgage, insurance B2B policies, etc.) B2C – Shared access (i.e., roads, web information, air, etc.) B2G – Privileged access (i.e., personal thoughts, inalienable kinship relationships, etc.) G2C provider resources G2B customer resources Owned Outright G2G Owned Outright Leased/Contract C2C C2B Leased/Contract Shared Access C2G Shared Access Privileged Access *** Privileged Access

Four possible outcomes from a two ISPAR descriptive model player game 1 2 5 6 Win Lose lose-win win-win Provider (coercion) (value-cocreation) 3 7 4 8 lose-lose win-lose (co-destruction) (loss-lead) 9 10 Lose Win ISPAR generalizesCustomer to ten possible outcomes – win-win: 1,2,3 – lose-lose: 5,6, 7, maybe 4,8,10 – lose-win: 9, maybe 8, 10 – win-lose: maybe 4

* = Interact-Service-Propose-Agree-Realize (ISPAR)

A focus on Key Real World Problems that need an understanding of Service Systems

An Opportunity A Driver A Challenge

The body of Practical Knowledge about Complex Service Systems will be enhanced..

Continue .. – ‘Call to Arms’ – Focus on Service Skills (Development & Curricula)

Build.. – Attempts to build Foundational Paradigms

Focus on.. – Making Practical Connections between Industry and Academia to exploit emerging Knowledge to help solve real world problems – ‘Collaboratories’ – Knowledge Networks … – …

instrumented, interconnected and intelligent. + + =

Through collaboration and co-creation building on the emerging Science of ‘Service Science’ we can start to address some of the core challenges in

The world will continue to become smaller, flatter and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet.

The question is, what will we do with it?

And what part will Service Science play ?

IT Architect Service Science Advocate IBM UKI

steve_street@uk.ibm.com Twitter: SteveDStreet

JBS Podcast - – http://www.jbs.cam.ac.uk/interactiv e/mba/2009/podcast_street_servic es.html

© 2009 IBM Corporation 7 Principles of The Way The World Works 1. 2. 3. 4. MOVING THINGS FROM MAKING THE MOST OF RECOGNIZING PATTERNS MAKING DECISIONS HERE TO THERE WHAT WE HAVE We understand that which As the planet becomes The science of moving A system of any scale - a we can see and then act on instrumented, things from here to there - team, a company, a data what we can envision. interconnected, and cargo, components in a center, a city, a nation - Recognizing patterns in a intelligent, more and more supply chain, inventory, contributes most, when it’s mountain of data gives you insight is made available. money, digital bits, optimized. An ability to new power to see what is Rather than guessing or policies, even ideas - is make more from the same truly going on - from there, acting on a hunch, this the backbone of economic elements serves as a vital you can model what is (often) real-time insight progress, and quality of imperative. likely to happen next. Do we gives us the choice of how everyday life. want the pattern to to make decisions - and continue? Change? when to make them.

5. 6. 7. CONSERVING TIME PREVAILING OVER PARTICIPATING IN AND ENERGY OPPOSING FORCES SYSTEMS of SYSTEMS *Note:

Ambition is greater than The world is filled with The success of virtually any These principles are a the resources available. opposing forces, and endeavour of scale requires first articulation. The planet now requires virtually every system has understanding how these They will, and should, that we conserve opposing forces that systems interconnect and evolve by tapping into energy of all types - keeps it vital. These forces interplay. Your place, your IBM’s community of human energy, use of cause the tensions that role, your contribution experts on these topics. time, natural resources. help any system evolve. depends We must take waste That said, prevailing over on how clearly you see and inefficiency out of these forces can be those systems. our systems. complex.