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Jim Spohrer, Director, Services Research, IBM Almaden Research Lab, Silicon Valley, is in the thick of the future changes at the Big Blue. And he is busy inducting linguists, anthropologists and economists. What's brewing? Lots. With nearly half of IBM's $89 billion revenue now from services, CEO Sam Palmisano wants to push the service frontiers, and this means using diverse sources of expertise in thinking up tech-enabled solutions for a wide range of problems. Spohrer, who was earlier the CTO of IBM's venture capital relations group, spoke to BT Online's Vidya Viswanathan on what it is that he's really up to. Q. What will the services sciences research group do? A. The opportunity in services sciences is similar to what was available in computer sciences in the 1950s and 1960s. Look at the US economy today---50 per cent of it comprises services. Even auto manufacturers are talking about how they are creating services businesses to grow. Yet, there is no first-principles deep understanding of how to do successful services engagements quickly. In some cases, even deployment of a CRM (Customer Relationship Management) solution takes many months. With better understanding, it should take less time. Take car manufacturers today. They started with products and then moved into financial services to make money. Then maintenance got very complex and they got into that business. Now General Motors has Onstar, the online service you can access while you are driving. So as products mature, you have to grow with value added services. Different types of services get wrapped around a product. The value of the business has to evolve, and that is driven by IT. Q. Why are you hiring social scientists? A. How do you accelerate deployment of technology? Very often people resist it even if not deliberately. Why does something like Napster cascade very quickly? Essentially one has to understand how people evolve work practices. On-demand e-business (IBM's jargon for an adaptable, 24 hour technology backbone), which is what the world is moving towards, requires an adaptable workforce. We have hired an anthropologist to understand how work evolves over time as automation plays out. Q. Are you working with academia? A. Yes. We are studying work change from 1800s onwards. We need to study how quickly people can adapt to change, how to evolve the workforce to adapt to new products and new technology. We are working with universities to understand what services mean. Tom Campbell, the Dean of the Haas School of Business at Berkeley, for example, is very excited. He runs a certificate course called 'Management of Technology'. This combines business innovation, technology innovation and work innovation and is extremely popular. Q. Are you formally studying job changes? A. Yes we are studying business evolution over the last two centuries. Just 200 years ago, there were no large businesses. Technology affects business evolution. Take a look at our own lives. Our grandparents did one job throughout their lives. Our parents concentrated on climbing the corporate ladder, and got to do some more jobs. Now people are migrating from job to job instead of migrating from geography to geography. This is a new phenomena. Today's dynamic nature of business needs a dynamic worker. That is why we are hiring social scientists like anthropologists and economists to study what is happening and to aid it. In some sense, this is an evolution of IBM. Our former CEO Lou Gerstner's contribution to IBM was IBM global services. Now we have to move into the next generation of services and deploy research to make that happen. Q. You did say you wanted your group to land with a Nobel prize in economics. A. Well, IBM has several Nobel prize winners in technology and sciences. What I meant was that our contribution to research in this area will be of that level. There is far more data and computing power now to simulate economies and business models. Earlier, it had to either be analytical or be very simple models. Q. Are anthropologists going to be working on each service engagement? A. No, they have a fine-grained view of work, so we will use them at a much higher level. For example, we have been studying our own system administrators. Our earlier understanding of their work was that they worked with databases, finetuning them for performance, essentially working with a lot of technology. But guess what? It turns out that they spend 90 per cent of their time negotiating with the rest of the organization on technology changes and how it will affect applications. So where we were going to come out with next generation automation tools for data centers that would twiddle knobs faster by itself and optimise software, we now think that we should make communication and negotiation easier. We studied what they were negotiating, the time, the content of work and so on. We are looking at tools that would help a user explain his context to a systems person. Essentially what we are trying to do will touch new services offerings, new technology, innovation, work practices and business models. We also have to make the client organization more aware of return on investment (ROI) in technology. This is a new way of delivery. We are going to have to explain returns in quantifiable terms if a problem is solved as against charging per man hour for automating routine tasks. Look at what adds complexity to a service business. Even if we have very competent consultants and researchers extremely familiar with a problem, they have to work with a client organization. Hence 50 percent of the people involved are doing it for the first time. Now if the result is going to change the work practice of 5,000 people in a company that takes studying. Q. Are you studying the working of IBM Global services itself? A. Our services research is a three-pronged strategy. At one level, we are working with scientific and academic faculty. In September 2003, we held a summit with the scientific and academic community titled 'Coevolution of Technology and Business' that traced the history of both. We also had people making projections for both. At another level, we are looking at our own 170,000-man services operations as data. How can we make it better? How to run data centers or change services? We are studying all processes. For example in one case, if a group arrived at a consensus with a client in one week and in another it took six weeks, we will look at what happened. In addition, like I mentioned earlier, we are coming up with new service offerings in different areas like auto manufacturing, new ways of delivery, calculating RoI and innovations in business models.
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