New skills required – enter “services science” as a new discipline

By Eamonn Kennedy and John O'Brien

Ovum has recently published the first in a series of reports on services science. This extract from that report outlines the basic reasons why we believe its stakeholders should take action now to make services science mainstream. Among other perspectives, forthcoming reports will examine the role of academia and government, and will highlight some pioneering activities by these stakeholders that will reassess fundamental assumptions about services with a view to making their provision, consumption and economic value more sustainable.

What it is and why we need it

There are some powerful drivers behind the emergence of services science, which we define in brief as an investment by government, the academic and business communities to create an evidence-based understanding of the services economy and to use that understanding to bring about more efficient service delivery and consumption.

Many developed economies today rely on services to generate in excess of 70% of their economic output. Despite the long-term historical trend towards service-led economies and a service-led IT industry, investment in understanding what this means for business and the wider economy has lagged behind. This means that developed economies have become heavily reliant on a service sector that they don’t understand as well as they should – and all the while their industrial and manufacturing base has been lost to lower-cost countries.

Increased services efficiency is of general economic advantage and offers benefits to all three of the stakeholder groups: academic institutions investing research budgets in services science stand to generate new knowledge that is in demand by industry; IT service providers and their clients can use that new knowledge to enhance their business performance; and governments stand to benefit from stronger, more resilient service provision and consumption in their economies.

Countering service portability

With some parallels to manufacturing before it, employment in IT services has moved to lower-cost countries, resulting in the meteoric rise of offshore service provision over the last ten years. The worrying aspect of this development is that it seems to be occurring in a context of limited knowledge as to what can and should be done to turn this to the advantage of developed, higher-cost economies.

This has implications across all sectors of the services economy. However, with regards to the IT services industry specifically, developed countries could find themselves relegated to nothing more than an importer and consumer of low-cost offshore services if they fail to seize the opportunity to define, understand and deliver IT services based on evidence-driven, scientific principles. Importing commodity IT services is fine, but the importing economies need to balance out those imports with the creation of economic value elsewhere.

Services science can help with all these issues by providing a rigorous and scientific analysis of the services industry, resulting in a real, evidence-based understanding of how service companies and their activities should be managed, how services should be best delivered and consumed, and how the market for services will develop over time.

If they are not to miss out on the future of that industry, Ovum believes that countries, regions, companies and universities that have enjoyed a pioneering role in the development of the IT services industry must invest in the deliberate and scientific discovery of knowledge as to how those services can best be designed, delivered, consumed and managed.

Key messages

• There are three primary stakeholder groups that can guide the development of services science: academia, government and industry. Only by investing and working together in a coordinated manner can the maximum promise of services science be realised.
  
  
• The global recession should sharpen government and industry’s focus on services science as they seek solutions to invigorate the western economy, to make business more competitive and to learn from this latest setback.
  
  
• Services science has the potential to establish a new industry of professionals (compare engineers, lawyers and computer scientists) whose expertise can be drawn upon to benefit the broader services-led economy.
  
  
• The degree of human intervention required during the lifetime of an IT services contract is too high and is consequently both too expensive to be efficient and too error-prone to be effective. These shortcomings are directly related to the absence of scientific rigour in the design and delivery of these services.
  
  
• IT is integral to services science, since modern service systems often have IT enablement heavily involved in service delivery.
  
  
• IT service providers have the potential to benefit from services science by making their offerings more meaningful and resilient in a market that will increasingly demand more efficient service delivery.
  
  
• Innovation in services delivery is at the heart of the vision for services science. The end goal should be a virtuous circle of innovation that can encourage new business opportunities and, in turn, create further innovation in the delivery of services.
  
  
• Collaboration, investment and sharing of knowledge are vital to progressing services science research and development.
  
  
• Significant challenges still need to be overcome to drive adoption of services science, not least of which is the complexity of aligning academic, business and governmental interests at a given moment in time.
  
  
• Governments, academia and the IT services industry should be prepared to value the benefits of services science over the medium to long term, as well as those that can be realised in a shorter timeframe.
  
  

The full report, entitled Services science: new skills for post-recessionary economies, can be accessed by Ovum clients through the Ovum IT Knowledge Center. Enquiries about Ovum's research programme on services science can be addressed to eamonn.kennedy@ovum.com.