In the last couple of weeks I have been immersed in complex systems, services and related subjects. First, on Tuesday, September 26 I gave a talk entitled "At the Threshold of a 21st Century Business Revolution" at the 2006 MIT Engineering Systems Conference – the theme of which was Complex Systems, Complex Times: Reflections on the 21st Century Enterprise. Later that same week, I participated in a two day workshop on Complex Engineered, Organizational and Natural Systems sponsored by the National Science Foundation (NSF).
A week later, on October 6 and 7, IBM sponsored a conference on Education for the 21st Century focused on the emerging discipline of Service Science, Management and Engineering (SSME). My role was that of wrap-up speaker at the end of the first day.
In my comments I recapped not just the IBM SSME conference but what I had heard at the three meetings I attended in the previous two weeks. In particular, I said that the two main themes of these meetings - complex systems and services - are very similar areas around which we are framing the very complicated problems of business and societal systems that we are trying to understand.
These two areas overlap and differ in interesting ways. For example, at the NSF Workshop, one of the three complex system topics we analyzed in order to come up with a common research agenda was biology, in particular bacterial scale systems - most definitely a complex system, but one that does not involve services. And the IBM SSME conference included talks on understanding customer requirements in order to grow revenues, which is not a topic one typically associates with systems, complex or otherwise.
We can see the overlap clearly when we study market-facing complex systems. Their key objective is systems design – including the creation of new applications for industry, government, health care, education, entertainment and so on. By their very nature, such market-facing systems involve services - that is, people and organizations performing tasks for each other, such as providing medical treatment, selling products and solutions and making sure customers are satisfied. In most organizations and economies, front-office activities involving people - i.e., services - are the largest and fastest growing components, especially as we continue to standardize and automate back-office operations. Thus, the study of services-intensive, people-oriented, market-facing complex systems is critical to innovation and economic competitiveness, as well as to job growth and the new skills that are required.
Market-facing systems are intrinsically collaborative and interdisciplinary. They require people with very solid technical competence. But they also require them to have a good understanding of business and management, so the technologies can be successfully brought to market. Furthermore, because of their complexity and interdisciplinary nature, most such problems can only be attacked with a team of people possessing a variety of skills. So it is essential that the people working in such teams have good communications and interpersonal skills. MIT professor Richard Larson presented a very good paper, “Holistic Trinity of Services Sciences: Management, Social and Engineering Sciences”, which discusses the need for integrating engineering, management and social sciences to address this new breed of market-facing systems.
Whether viewed through the complex systems or services lens, design lies at the heart of market-facing systems. We want to study supply chains, hospitals and government institutions not just to understand them better, but to design them better in the future. This is the approach engineering has taken through the years in discipline after discipline, from building bridges and skyscrapers, to cars and airplanes, to microprocessors and software. Because of advances in information technologies, the Internet, and open standards, we can now bring such an engineering-oriented approach to the design, development, operation and management of market-facing systems. We can also develop better CAD-like tools to assist business architects and engineers, as well as all kinds of highly visual simulation capabilities to help them test and optimize their system designs.
Market-facing systems need to evolve continuously to respond to changing market conditions. In that sense, designing a business and its processes is different from designing a physical object like a bridge or a microprocessor. Businesses and societal institutions need to be able to change and adapt to whatever is going on in the marketplace, and those changes are coming at an increasingly rapid pace. Biological systems clearly exhibit these properties of flexibility, adaptability and continuous evolution, which is why biology is such an inspiration for the study of dynamic, complex engineered systems. At the NSF Workshop, Cal Tech professor John Doyle gave a very interesting presentation on complexity in engineered systems and their links to natural systems, especially systems biology.
I believe that the most exciting new ingredient in services-intensive, market-facing systems is the inclusion of people in all aspects of the design. The presence of people as key components in a system accounts in large part for its dynamic, unpredictable nature – including many kinds of failures, i.e. "human error." At the same time, it is only through the presence of people to handle many of the tasks and processes of the system that we are now able to deal with the plethora of unanticipated events that we should expect in dynamic, unpredictable, rapidly changing systems.
In the end, we can only automate those tasks that we understand well and that are predictable or deterministic. Those tasks that we do not fully understand or that are intrinsically unpredictable should be handled by people. We now also have at our disposal far better technologies and tools to help those people make better decisions: access to huge amounts of online information, sophisticated analytical technologies to help us deal with all that information, advanced communications capabilities and social networking tools and platforms that facilitate collaboration. A good system design is one that holistically integrates those tasks that should be standardized and automated with those tasks that are best handled by humans armed with good tools and information.
As I said in my talk at the MIT Engineering Systems conference, I really do believe that we are at the threshold of a major, technology-based 21st century business transformation, if not an outright business revolution. It is particularly gratifying that while technology is the catalyst enabling such a transformation, our biggest breakthrough is our newfound ability to integrate people into all aspects of our systems designs.