2Openwater Personalized Customer Servicerequirements, and quickly solving problems when they come up. This is really hard, which is why it may verywell be the most important way for a business to stand out from its competitors."The focus on the customer, on delivering a personalized customer experience is also at the heart of CEOCastro-Wright’s strategy to transform Wal-Mart. A recent article
on Wal-Mart highlights the fundamental shiftCastro-Wright is making. “The Company's cult-like focus on supply-chain logistics grinds away at costs butdoesn't allow it to know the neighbors. The new strategy tries to make that connection – editing for the area,offering a point of distinction. "It's going to tell the customer that we understand what they need,” says CEOCastro-Wright. "We not only understand what you need, we respect your point of view. We want to be yourstore of choice because we understand you better than anyone else in the marketplace." Said another way –they’ve done a great job at their transaction systems – their challenge is how to use information to drive anexperience that is personal to you.
So how are Mittal and Castro-Wright going to achieve their business vision? In 2002 IBM launched an initiativethey call Service Science. Service Science came from an observation that IBM could double the size of theirservice business (which is over 50% of IBM’s revenue), but without an investment in technology their marginswould erode. Starting with a team of 20 researchers Jim Spohrer has grown the group to over 400. IBM chosethe name Service Science because they believe this work is as important as Computer Science was in the 20thCentury.Service Science is a hybrid field that seeks to use technology, management, mathematics, and engineeringexpertise to improve the performance of service businesses like transportation, retailing, and health care — aswell as service functions like: marketing, design, and customer service that are also crucial in manufacturingindustries. Today universities around the world including the University of California at Berkeley, Arizona State,Stanford, North Carolina State University, Karlstad University, Peking University, Universidad Federal de Rio deJaneiro and University of Sydney are experimenting with courses, degree programs or research programs inthe field. Jim has challenged the community by saying: ''Computer science has benefited from Moore’s Law(where the capabilities of computer chips double about every 18 months). Could a Moore’s Law of servicescience be possible?''In January 2007 he and a group of colleagues published a paper entitled: Steps Towards a Science of ServiceSystems
. In the paper they outline their basic approach to developing and cultivating an interdisciplinaryeffort called Service Science—“the application of scientific, management, and engineering disciplines to tasksthat one organization (service provider) beneficially performs for and with another (service client). ServiceScience aims to understand how an organization can invest effectively to create service innovations.”They go further to define the basic idea of a service system as a “value co-production configuration of people,technology, other internal and external service systems, and shared information (such as language, processes,metrics, prices, policies, and laws). Service systems comprise service providers and service clients workingtogether to co-produce value in complex value chains or networks.” The science of service systems relies
Restoring Wal-Mart, Time Magazine, November 12, 2007
Steps Toward a Science of Service Systems, Jim Spohrer, Paul P. Maglio, John Bailey and Daniel Gruhl, IEEE Computer,January 2007.
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