1. Service Science – Enabler of Taiwan’s Next Miracle Why, What, How CC Fan Senior Managing Consultant IBM, Global Business Services [email_address] +886 935264538

2. “ Service” Does Matter …. Europe NESSI (2005) Networked European Software and Service Initiative Japan SPRING (2007) Service Productivity & Innovation for Growth

20. Exemplar Model Cutting Corners and Working Overtime: Quality Erosion in the Service Industry By Rogelio Oliva • John D. Sterman Harvard Business School, Morgan Hall T87, Boston, Massachusetts

21. Example of Mathematical Model Partial Model Estimation : The estimation minimizes the sum of squared errors between simulated and actual time per order given the structure of the model and driven by the data for actual service capacity (SC) and customer orders (CO) Service Delivery [ Customer orders (so) accumulate in a backlog (B) until they are processed. ] Service Capacity [Effective service capacity (c) is determined by adjusting the total labor force (L) by the effects of personnel experience (e) and fatigue (f )] Employee Responses [Work pressure (w), a measure of the balance between service demand and capacity, is defined as the gap between required service capacity and effective service capacity as a fraction of current capacity,] Service Quality [The satisfaction or quality customers experience (q) is a nonlinear function of the performance gap—the normalized difference between the time allocated per order (T) and customers’ expectations (Zeithaml et al. 1990)]

27. Industry Response – SRII - Service Research & Innovation Initiative

29. SSME curriculum Design – There are different approaches to design SSME courses Organization Theory Services Sciences, Management, and Engineering (SSME) and Solutions Engineering Service & Solutions Excellence Centers (Information Science & Technology Management) Institutional Economics Experimental Economics Economics School of Social Sciences Labor Psychology (Human Capital Mgmt) Psychology Transformation & Integration Selection & Aggregation Evolution & Revision Discipline School Service Marketing Marketing School of Management Service Operations Operations Service Accounting (Activity-Based Costing) Accounting Service Sourcing (eSourcing) Contracts & Negotiations Service Operations Operations Research School of Engineering and Science Service Engineering Industrial & Systems Engineering Service Computing, Web Services, SOA Computer Science Medical School, Law School, Education School, Hotel & Restaurant School, Media & Communications, etc. Professional Schools Business Anthropology Anthropology Management of Innovation Management of Technology Service Management Management Science

34. 2. IBM – IBM has transformed from manufacturer into service provider 55% 25% 20% SYSTEM AND FINANCING SOFTWARE SERVICES 2007 年 IBM 營收比重 27% 56% 17% SYSTEM AND FINANCING SOFTWARE SERVICES 1993 年 IBM 營收比重 IT Maintenance Services IT Server Room Outsourcing R&D Services (FOAK, ODIS) Application Maintenance Service Business Consulting Services (GBS) Business Transformation Outsourcing Services

35. 2. IBM – R&D services is setup to align R&D to market demand Standard Solutions Repeatable engagements Consulting and systems integration Vision and invention Science and basic research Supports product development for IBM brands or OEMs Global Technology Outlook (GTO) "Bleeding edge" First-of-a-Kind (FOAK) Projects - building new prototype solutions Leading-edge innovation Application of mathematics, science and fresh thinking Solving complex or difficult problems Application of invention to produce innovative solutions for clients On the horizon 2 to 10 years to practical application Tomorrow's technology today Business as usual ODIS

39. For Service Vendors – 1. Focus on specific sub-sectors 1. 產值： 1.5 兆元 2. 就業人數： 42 萬人 1. 產值： 1.2 兆元 2. 就業人數： 40.6 萬人 金融 2 觀光總收入： 4,483 億元 旅客人數： 境外市場： 520 萬人次 ( 含第 1 類大陸觀光客 ) 國民旅遊市場： 1.2 億旅次 觀光總收入： 3,800 億元 旅客人數： 境外市場： 352 萬人次 國民旅遊市場： 0.53 億旅次 # 觀光 4 總產值 4,300 億元 1. 行動 2,607 億元 2.Internet 及加值 717 億元 3. 電路出租 307 億元 4. 國際 260 億元 總產值 3,770 億元 * 1. 行動 2,202 億元 2.Internet 及加值 494 億元 3. 電路出租 268 億元 4. 國際 258 億元 電信 5 1. 產值： 7,724 億元 2. 受雇人員： 24.2 萬人 1. 產值： 6,962.1 億元 2. 受雇人員： 21.4 萬人 醫療 3 1. 批發零售產值： 2.6 兆元 2. 批發零售就業 人數： 183 萬人 1. 批發零售產值： 2.2 兆元 2. 批發零售就業 人數： 176 萬人 流通 1 編號 1. 營業額： 3,180 億元 2.CMMI 認證家數累計 85 家，全球排名第 5 3. 出口： 640 億元 1. 營業額： 2,386 億元 2.CMMI 認證家數累計 50 家，全球排名第 9 3. 出口： 325 億元 資訊 2009 年（量目標） 2006 年（現況） 業別

42. Leading to the next economic miracle Taiwan Economy Ages Manufacturing Post-manufacturing Knowledge economy 1973 1980 1986 1950 1960 1970 1980 1990 2000 5000 10000 15000 GNP(US Dollar)

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46. Definition of " Services " Note: Customer as to Service Provider is like “Yin” to “Yang”, they interact, grow with each other… Customer Service Provider

48. Product company R&D Production Sales HR Equipment Maintenance Payroll Processing Application Development

49. Business Componentization Example: Auto Industry Business Administration Corporate/LOB Strategy & Planning Organization & Process Policies Alliance Strategies Human Capital Management Legal & Regulatory Business Performance Intellectual Property Building/ Facilities & Equipment IT Systems & Operations Knowledge & Learning Financial Management Capital Appropriation Planning Financial Planning & Forecasting Risk Manage- ment & Internal Audit Treasury Tax Management Accounting & General Ledger Cost Management Product/ Process Portfolio Strategy & Planning Research & Development Design Rules & Policies Program Management Configuration Management Design Validation Change Management Mechanical Design In-vehicle System Design Process Design Tool Design & Build Supply Chain Supply Chain Strategy & Planning Demand Planning Supplier Relationship Planning Supply Chain Performance Monitoring Supplier Management Logistics Management Inventory Management Transportation Management Procurement Marketing & Sales Customer Relationship Strategy Sales & Promotion Planning Brand Management Relationship Monitoring Demand Forecast & Analysis Dealer Management Customer Relationship Management Order Management Lease Management Direct Control Execute Production Production Strategy Production Rules & Policies Master Production Planning Production Scheduling Quality Management Plant Operations Maintenance Management Production Monitoring Service & Aftersales Post Vehicle Sale Strategy Warranty Management Quality Management End-of-Life Vehicle Vehicle Service Parts Management Strategic Differentiation Competitive Parity Basic Strategic

56. Intersection of Services Management and Services Engineering