Next week,  Professor Irene Ng,  Professor of Marketing & Service Systems, University of Warwick, Warwick Manufacturing Group (WMG),  will be giving two talks at IBM Almaden Research that may be of interest to you.  For more background and how to attend or listen in, please check the Service Science blog.

Here is the abstaract for the one on Monday January 14th 11-12noon PST – ”Outcome-based Contracts as a New Business Model: Research Insights from Aerospace/Defence contracts”

Equipment-based services have traditionally been contracted on the basis of revenue-generating activities, materials and time required to maintain, repair or overhaul equipment such as engines and elevators. This often results in provider opportunism since the very activities that disrupt the customer’s use of the equipment are those that generate revenue for the firm, and the firm has less incentive to ensure the long-term care of the customer’s equipment. We present our investigations into outcome-based contracts (OBC) in equipment service particularly in the aerospace and defence sector, where some of these contracts are outcome-based (e.g. Flying hours of jets, power-by-the-hour for engines), aligning the incentives of customer and provider. We present our findings on the service system design, delivery and performance of outcome-based contracts as new business models through the case study of OBC contracts between BAE Systems (jets), MBDA (missiles) and Rolls Royce (engines) with the UK Ministry of Defence.

And the abstract for the one on Tuesday January 15th 11-12noon PST  “Creating New Markets in the Digital Economy”.  This is based on Irene Ng’s latest book “Value and Worth”.

The talk introduces Irene Ng’s latest book ‘Value and Worth: Creating New Markets in the Digital Economy’. It looks at how digitisation is changing the way we buy and use products and services. It considers what individuals value about what we have around us and the way we use them, in order to understand how value is created. Crucially, the book looks at how markets are converging between exchange (when we pay) and experience (when we use). This convergence, accelerated by greater digitisation, means there is a need to understand contexts of value creation within lived lives. This will enable firms to innovate and design future products and services to take advantage of the connectivity between them and emerge horizontal or systemic business models instead of deriving revenues from the traditional vertical industry value chains.