Service Innovation: Survival of the Savviest

On May 30, a bunch of very smart people from a variety of industry and academic settings will gather in Santa Clara, Calif., to discuss service innovation in the technology industry, at a symposium organized by the recently formed Service Research Innovation Initiative (SRII). Regrettably, I won't be there (to provide balance to all that intelligentsia), but I did get a chance to catch up with Tom Pridham, Executive Director SRII, about it.Service innovation is an idea whose time has come. The service sector now accounts for 75 percent to 80 percent of the U.S. gross domestic product (GDP). Countries like India and China are also fast catching up in this measure of "development": according to the World Bank, services now contribute about 50 percent to India's GDP and about 40 percent to China's, with both growing rapidly. Yet, while a tremendous amount of research has gone into innovation in traditional sectors of agriculture and industry, the service sector has remained relatively neglected.

SRII is a non-profit organization aimed at service innovation and sponsored by renowned names in industry and academics, such as IBM, Oracle, Xerox, Microsoft, Cisco, Arizona State University, University of Maryland and the Wharton School at the University of Pennsylvania. The goal of the SRII is to create a forum where interested parties - individuals, companies, academia and governmental arms and institutions - can collaborate on funding, research and knowledge-sharing focused on service innovation in the technology industry, enabled by a "Web 2.0 environment" with communities of interest and what Pridham calls "heat maps of topics of interest." Companies can typically contribute funds, sponsor research and share knowledge; academic institutions can provide research services as well as augment academic programs in service science; and government bodies can provide funding/sponsorship as well as other forms of support.

The ultimate objective is to help technology companies strengthen their customer interaction and derive competitive benefits through innovations in customer service, such as an improved customer shopping experience or an easier self-help solution aimed at customer service issues.

I think SRII is on to a good thing, but I was particularly curious about two aspects.

First, how will fruits of the research reach the average worker in the technology field - you, me, the salesperson in the Apple showroom, the Dell customer support representative? Will SRII end up as some esoteric community, operating in its own orbit, largely oblivious to the rest of us? The answer, to me, seems to lie somewhere in the middle. For the most part, as I understand it, the immediate beneficiaries of SRII will be member organizations that choose to sponsor, participate in or build upon the research and innovation engendered through SRII. The extent to which all of us benefit from this research will probably depend on the extent to which this innovation is put to work by the member organizations.

Secondly, given the ongoing concerns about protecting American workers from global competition - which occurs through guest worker programs or offshore outsourcing (the offshore-oriented BPO sector, for example, has to be thirsty for service innovation) - is SRII primarily aimed towards raising American competitiveness in the face of global competition? The answer is no: benefits of service innovation could potentially be reaped by the call center operator in the Philippines as easily as in Philadelphia and by Sony just as much as Sun. SRII has a global perspective, and this is borne out by the SRII membership roster, which includes the Indian Institute of Management in Bangalore and the Fraunhofer Institute for Industrial Engineering in Germany.

It's also not clear to me why (customer) service innovation needs are different for technology vendors, the core focus of SRII, as opposed to, say, financial or consumer product vendors. However, these are still very early days for SRII, and much will depend on which direction and how well it steers this highly ambitious venture - and, of course, the member strength and participation it can garner. This much is clear: in matters of service innovation, there seem vast mountains left to conquer, and the SRII expedition is well-timed.

Rajan Chandras is a consultant with a global IT consulting, systems integration and outsourcing firm, and can be reached at [email protected].On May 30, a bunch of very smart people from a variety of industry and academic settings will gather in Santa Clara, Calif., to discuss service innovation in the technology industry, at a symposium organized by the recently formed Service Research Innovation Initiative (SRII). Service innovation is an idea whose time has come. The service sector now accounts for 75 percent to 80 percent of the U.S. gross domestic product.