“The productivity of knowledge and knowledge workers will not be the only competitive factor in the world economy. It is, however, likely to be the decisive factor, at least for most industries in the developed countries.” – Peter Drucker, 1997
Peter Drucker coined the term “knowledge worker” in 1967 and he predicted that the economic opportunities and challenges of the next century would be to improve the productivity of knowledge workers and service industries the same way we improved the productivity of industrial workers and manufacturing over the last century. Today, less than 11 percent of the U.S. labor force still works in manufacturing. More than 70 percent is employed in services. The path to success will be making the transition from an industrial model of business to a services model of business. To support this new business paradigm, we will need the equivalent of traditional industrial engineers who will be able to design and implement processes that create higher productivity rates and economic growth. The question is, how do we build a “services engineering” capability?
Industrial Engineering
Industrial engineering deals with the design and optimization of industrial processes. Industrial engineers are educated in mathematical, physical, and social sciences, as well as the principles and methods of engineering. They design plant layouts, jobs, raw materials handling, the flow of materials through the production process, inventory control, and distribution systems. Industrial engineers focus on improving productivity and quality in industrial processes.
Service processes differ from industrial processes in many ways. It is more difficult to define, document and measure service processes, which are more complex, require a much greater degree of variability and flexibility in their execution, and are multi-threaded vs. single-threaded. Service processes and their outputs have different characteristics that make measurement and control more complicated such as intangibility, heterogeneity, simultaneity, and perishability.
A New Discipline
We need a new discipline of “services engineering” that develops tools and techniques to help analyze and design improvements in service processes productivity and quality. The programs at leading schools like Northwestern are shifting from the traditional content of industrial engineering toward a more general business analysis and consulting curriculum. Yet, they still don’t provide a set of courses focused on improving and transforming service processes productivity and quality.
Last year, the first international conference on services engineering was held in Australia. It focused on a services computing discipline promoted by the IEEE Computer Society. That is only a small piece of what we need for improving business services. In my next columns, I will explore different aspects of this issue and present an approach for developing a “business services engineering” discipline to support a service business and, of course, as a framework for applying BPM.
“‘Agile’ methods and techniques for governing and improving work processes are typically better than ‘engineering’ methods where knowledge work is concerned.” – Tom Davenport, Thinking for a Living, 2005
