IT and the Transformation of Services

The application of rule-based IT tools to service activities is literally transforming the services component of the economy. Service activities themselves are changed when the activities can be converted into formalizable, codifiable, computable processes—processes with clearly defined rules for their execution. The activities are changed when the information on which they rest can be developed, manipulated, and elaborated by these digital tools.  Much of the innovation in services then is around the adoption and effective implementation of IT tools.

Now, IT has enabled the reorganization of services, and business processes have become a source of dynamism in the economy.  IT tools assemble and process information, permitting patterns to be extracted, and store and transmit information, changing when and where tasks can be performed.  Likewise, sensors and sensor-based networks change many personal services.

As a result, new business models are being generated throughout the economy; information is used in radically new ways to create new services.

John Zysman and his colleagues at UC Berkeley have two research foci. First, they examine the services transformation by exploring how it changes the competitive dynamics of sectors and the strategies of firms. They are looking at the development of a set of sectors in global competition and their parallel national development.  As part of that, CITRIS strategic partners have emphasized that, since services are embedded in rules and regulations, the researchers examine the pace and direction of this transformation as shaped by choices about those rules. Business decisions from technology development through the effective application of tools to process often turn on the broader choices about the rules in and organization of, for example, the health or financial sectors. Second, they study the service transformation as it is facilitated by and drives evolving IT tool sets.

Chang Kon Kim, President of Korea’s National Information Society Agency and ProfessorJohn Zysman at a Signing Ceremony involving CITRIS and the NIA.