The New Software Industry: John Zysman

John Zysman, a professor of Political Science at UC Berkeley, immediately followed Maglio with a related discussion on Services Transformation. The expectation was that Maglio and Zysman have diametrically opposed views and that their joint question period will degrade into fisticuffs — or at least a lively debate — but it turns out that they’re pretty closely aligned on many issues.

A generation ago, services (within a software product company) were seen as a sink hole of productivity, but are now considered to be sources of productivity. It’s not that the service sector has grown or has changed from agriculture to IT, it’s that the sector has been reorganized in significant ways. In order to navigate this, we need to understand three things: strategy and organization; tools; and rules and roles (social-political dynamics).

An example of this sort of transformation is what Zysman referred to as the “American Comeback”, driven by the new consumer electronics, with a shift from electro-mechanical to digital (think Walkman to iPod) as well as modularization and commoditization within the supply chain. He listed stages of service transformations, although I can’t do justice to an explanation of these:

  • Outsourcing
  • Changes in consumption patterns
  • Outsourcing household work
  • The algorithmic transformation: from revolution to delusion

Most of this transformation is based on a change in how services are performed and the application of technology to allow services to be performed in different ways and locations. I heard an interesting example of this last night while having dinner with some of the TIBCO people who I’ll be seeing at TUCON later this week: two of them were from the U.K., one of those two now living in the U.S., and we had a discussion about healthcare in the U.K., U.S. and Canada. One of them made the point that in the U.K., patients sit in the waiting room until the doctor comes out and calls them in, where as in both Canada and the U.S., multiple patients are taken simultaneously to separate examination rooms and prepped by medical assistants, then the doctor just goes from one room to another to do a more specialized part of the work. What’s really interesting is that U.K. and Canada both have socialized medicine, which would tend to favour the less efficient but total service U.K. model, except Canada has a shortage of doctors so has moved to the more efficient U.S. service model.

A couple of random ideas from his talk that I want to capture here for later thought:

  • Should we conceive a services stack?
  • Automating the codifiable parts of a process is the first step in the transformation.
  • By commoditizing a service, you may be “moving the whiteboards of innovation”, i.e., disabling the ability to have innovation in a service.

In discussing rules and roles, Zysman talked about how services are embedded social processes, and how we need to change the way that processes work. How did we end up talking about business process reengineering? I thought that I was taking a break from process today, but as it turns out, there is no escape.

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