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Product companies continue to struggle with transitioning from product-centric to servitized business models delivering product-service-software systems (PSSS). While the literature on digital servitization continues to grow, practitioners gradually infusing their business with servitized and digitized elements are still keen to understand the underlying value creation and delivery. Our study examines the complex dynamics of PSSS value architectures in light of existing value networks. Combining a longitudinal single case study spanning over three years in the construction industry with a cross-industry multiple case study approach, we collect insights from product companies, value network actors such as distributors, and customers. In an interdisciplinary approach, we integrate marketing and channel management perspectives to derive collaboration archetypes to deliver PSSSs in existing value networks and address the question of which player can contribute to the value proposition in which way. For managers, this study offers an overview of relevant change drivers shaping PSSS value architectures and their implications on essential capabilities and processes.

Despite the demonstrated opportunities for revenue enhancement through digitalization, companies often experience a digitalization paradox. This paradox suggests that although companies may invest in digitalization, they often fail to achieve the expected revenue enhancement. In reporting research on 52 companies, we make the following four contributions: First, we focus on industrial companies in the business-to-business context, which largely have been neglected in previous research on digitalization. Second, we introduce the digitalization paradox as an important phenomenon in the discussion of revenue enhancement through digitalization. Third, we describe three growth paths: (1) commercializing digital solutions, (2) utilizing product connectivity, and (3) establishing an IoT-platform-based application business. For each growth path, the article takes a dynamic perspective on business models, highlighting triggers and modifications in business-model components (including value proposition, value-creation activities, and profit equation). Fourth, while the described modifications require initial investments to let these growth paths develop, we highlight how growth traps can prevent investments in business-model modifications from leading to revenue enhancement and how they can ultimately lead to the digitalization paradox.

The present study investigates the effect of the interaction between digitalization and servitization on the financial performance of manufacturing companies. We challenge the simple linear assumption between digitalization and financial performance with a sample of 131 manufacturing firms and hypothesize a nonlinear U-shaped interaction effect between digitalization and servitization on financial performance. From low to moderate levels of digitalization, the interaction effect between digitalization and high servitization on company financial performance is negative and significant. From moderate to high levels of digitalization, the interplay between digitalization and high servitization becomes positive and significant, improving companies financial performance. The results demonstrate the need for an effective interplay between digitalization and servitization, the digital servitization. Without this interplay, a manufacturing company may face the paradox of digitalization. For managers of manufacturing companies, the study provides insights into the complex relationship between digitalization and financial performance, emphasizing the value of servitization in driving financial performance from digitalization. Thus, the study demonstrates how manufacturing companies can become data-driven by advancing servitization.

Ein Hersteller von Mess- und Prüftechnik steckt mitten in der digitalen Transformation, doch seine Produkte und Services finden bei den Kunden nur wenig Resonanz. Der CEO betreibt Ursachenforschung.

The provision of basic services is falling short in informal settlements of cities in the Global South. In particular, public utilities have had difficulties expanding their services to the urban poor. Why is this the case despite utilities having improved their capabilities substantially over the last years? This paper investigates how innovation strategies of utilities are aligned or misaligned with the broader contexts in informal settlements, which are populated by different socio-technical regimes. We propose a framework to identify new capabilities needed by utilities to deal with these different regimes. The paper reconstructs pro-poor initiatives of a water and sewerage utility in a large East-African city and explains why they tended to fail in terms of livelihood improvement. We show how the alignment between capability portfolios and specific regime structures have set limits to the success of pro-poor innovation strategies in informal settlement contexts.

This study extends the discussion of digital servitization business models by adopting the perspective of the theory of the firm. We use four theories of the firm (industrial organization, the resource-based view, organizational identity, and the transaction cost approach) to understand digital servitization business models of firms in the context of ecosystems. Digitalization transforms the business models of solution providers and shapes their firm boundary decisions as they develop digital solutions across organizational boundaries within ecosystems such as harbors, mines, and airports. Thus, digitalization not only affects individual firms' business models but also requires the alignment of the business models of other firms within the ecosystem. Hence, business models in digital servitization should be viewed from an ecosystem perspective. Based on a rigorous literature review, we provide suggestions for future research on digital servitization business models with in ecosystems.

Servitization describes the addition of services to manufacturers' core product offerings to create additional customer value. This study aims to identify the key themes and research priorities in this body of literature over thirteen years from 2005 and 2017, based on four major research streams (general management, marketing, operations, and service management). Prior multi-theme literature reviews have focused on operations journals, overlooking important work in other streams, particularly marketing. Informed by a systematic literature review of 219 papers, the study identifies five main themes: service offerings; strategy and structure; motivations and performance; resources and capabilities; service development, sales, and delivery. Within each theme, gaps in the literature are identified and eleven research priorities presented. The review shows that the literature has evolved significantly in recent years, becoming increasingly diverse. A recent noteworthy topic is the use of digital technologies, which indicates the increasing relevance of technological developments to manufacturers' service activities. Our review highlights that there are still some fundamental aspects of servitization that warrant further research, primarily the need to replace the focal-manufacturer perspective with a multi-actor perspective that highlights the important role of relationships with existing and potentially new actors as a result of technological developments. Funding agencies: Riksbankens Jubileumsfond (The Swedish Foundation for Humanities and Social Sciences) [P15-0232:1]

By studying servitization processes and service competencies in the wind-to-energy industry in European regions, this paper provides a framework for territorial servitization. The framework resonates with the concepts of knowledge-intensive business services (KIBS) and industry life cycles, and its elements can be embedded into concepts of regional development (e.g., lead-market models, sustainability transitions, territorial innovation models). The framework suggests that regions benefit from servitization processes via the interplay of generating employment opportunities, enabling an efficient allocation of technology resources, opening up new markets, strengthening territorial competitiveness, raising the odds of securing employment in the consolidation period and enabling technological leaps.

People in Base of the Pyramid markets still face difficulties when it comes to sanitation. Container-based Sanitation (CBS) services represent a promising advanced sanitation service. Despite the observed outcomes of CBS services, organizations face obstacles when providing these services. To overcome these obstacles, digital transformations of these services are being carried out. We rely on multiple case studies to understand these digital transformations. Our findings highlight (1) the challenges these case organizations faced before engaging in the digital transformation, (2) their individual digital transformation pathways, and (3) a general framework for digital transformations in BoP markets. Funding Agencies|Eawag discretionary fund

Pay-per-use services are an interesting phenomenon, both empirically and theoretically. Despite the alleged benefits, companies still struggle to succeed with pay-per-use services. Theoretically, it is common sense that existing service capabilities cannot easily be converted into organizational capabilities for pay-per-use services. Based on multiple case studies, the present article narrows down the existing empirical and theoretical gaps through an inductive research approach. Our findings make the following contributions to the field of services in product-oriented companies and to the servitization literature. We describe the organizational capabilities necessary for pay-per-use services (e.g., financing such services, aligning costs with equipment usage, and collaborating with custom ers). We reveal that companies should convert these capabilities into three core competencies (strategizing pay-per-use services, utilizing technologies for pay-per-use services, and de-risking pay-per-use services), in order to achieve competitive advantages.

The toilets used most in informal urban settlements have detrimental consequences for the environment and human health due to the lack of proper collection and treatment of toilet waste. Concepts for safe, sustainable and affordable sanitation systems exist, but their feasibility and acceptance have to be investigated at an early stage of development, which is difficult due to the high costs of building working models. In this paper, we present an approach to estimate acceptance in a valid and representative form with only one working model, and apply it to test an innovative zero-emission toilet with recycling of wash water. Four basic principles were specified for investigation and nine hypotheses formulated to test the feasibility and acceptance of these principles: source separation of urine and feces with subsequent collection for resource recovery; provision of wash water in a separate cycle with on-site recovery through a membrane bioreactor; a convenient and attractive overall design; and a financially sustainable business plan. In Kampala (Uganda), in 2013, data was collected from 22 regular users, 308 one-time users and a representative sample of 1538 participants. Qualitative data was collected from the users, who evaluated their likes, perceived benefits, social norms and expected ease of use based on verbal and visual information. Most of the hypotheses were confirmed, indicating the feasibility and acceptance of the basic principles. Source separation and on-site water recovery were found to be feasible and accepted, provided users can be convinced that the emptying service and water recovery process work reliably. In the survey, the toilet was evaluated favorably and 51% of the participants agreed to be placed on a bogus waiting list. However, some design challenges were revealed, such as the size of the toilet, hiding feces from view and improving the separation of urine and water., Science of The Total Environment, 576, ISSN:0048-9697, ISSN:1879-1026

Services in product-oriented companies have become one of the most active research areas in the service domain. Practitioners have become advocates for service business development. Research domain on services in product-oriented companies remains open to a variety of conceptualizations and interpretations such as hybrid offerings, solution providers, transition from products to services, system suppliers, product-service systems (PSS), servitization. In this article, we reflect on the past, present, and future of service research in product-oriented companies. We explore the way in which the literature on services in product-oriented firms has been evolving and taking shape, expose the underlying key concepts, and describe future research directions.

Both academics and practitioners emphasize the importance for product firms of implementing service-led growth strategies. The service transition concept is well established, namely a unidirectional repositioning along a product-service continuum—from basic, product-oriented services towards more customized, process-oriented ones—ultimately leading to the provision of solutions. We challenge this service transition assumption and develop alternative ones regarding how product firms should pursue service-led growth. Using ‘problematization methodology’, and drawing on findings from thirteen system suppliers, we identify three service-led growth trajectories: (1) becoming an availability provider, which is the focus of most transition literature; (2) becoming a performance provider, which resembles project-based sales and implies an even greater differentiation of what customers are offered; and, (3) becoming an ‘industrializer’, which is about standardizing previously customized solutions to promote repeatability and scalability. Based on our critical inquiry, we develop two alternative assumptions: (a) firms need to constantly balance business expansion and standardization activities; and (b) manage the co-existence of different system supplier roles. Finally, we consider the implications for implementing service-led growth strategies of the alternative assumptions.

Forlagets e-utgave er tilgjengelig fra www.magma.no Det er en ny trend blant ledere og markedsførere å involvere kundene i tjenesteproduksjonen og leveransen. Fenomenet kalles blant annet «co-production » og «co-creation». I denne artikkelen kaller vi det for kundedelaktighet. Fenomenet har vist seg effektivt for å redusere kostnader ved at kundene i større grad blir trukket inn i produksjonsprosessen og på den måten blir gratisarbeidskraft. Men det har også vist seg effektivt for å skape høyere verdier for kundene ved at de gjennom sitt engasjement i større grad tar eierskap for sluttresultatet, eller i større grad får en løsning som er bedre tilpasset deres behov. Utsiktene til bedre marginer og høyere kundetilfredshet og lojalitet har fått en rekke ledere og markedsførere til å «ansette kundene» i langt større grad enn før. Men i jakten på å skape verdier sammen, er det noen oppgaver som er mer attraktive enn andre for kundene? Det er dette spørsmålet vi besvarer i denne artikkelen. Vi viser gjennom en studie at kundene ikke ønsker å engasjere seg i å rette opp en feil, og at de nyttebaserte oppgavene verdsettes høyere av kundene enn de mer underholdende oppgavene. For ledere har dette store implikasjoner med hensyn til hvordan de vil engasjer kundene og innen hvilke områder de bør innovere for å gjøre det enklere, billigere, fortere, eller morsommere for kundene å bidra. 1, OA

The sanitation concept Blue Diversion (www.bluediversiontoilet.com) was developed as a possible answer to the sanitation crisis in urban slums. It is based on two main elements: (1) diversion of urine, feces, and water at the source as the basis for efficient resource recovery, and (2) linking different scales (family toilets and semi-centralized resource recovery). Our objective was to develop an attractive grid-free (i.e. functioning without piped water, sewer, and electrical grid) dry urine-diverting toilet, which provides water (through recycling on-site) for flushing, personal hygiene (anal cleansing and menstrual hygiene), and hand washing. This service, including the entire sanitation value chain, should eventually be made available as a profitable business with total user fees of 5 ¢/p/d. The results presented in this paper are (1) a toilet design model, (2) the development of a new type of membrane bioreactor for treating flush and wash water, (3) main results of a geographic information system-based stochastic service model to link the family-scale toilet to a community-scale Resource Recovery Plant, and (4) a business model that yields maximum profit for the local community. We conclude that the approach is feasible, but challenging from a technical as well as an organizational point of view. A firm's competitive advantage originates increasingly from absorbing external knowledge. Absorbing external knowledge and the underlying learning processes are referred to as a company's absorptive capacity. In this article, we outline research trends on absorptive capacity. We apply a bibliometric analysis to describe the concept's historical development, define the intellectual core of the absorptive capacity concept, and discuss recent conceptualizations. Then, we identify two prominent streams in the absorptive capacity literature and provide a new approach on how to integrate them. Finally, we provide an outlook on possible themes in future research on absorptive capacity.

The study at hand explores the influence of value-added services offered in addition to a motor insurance product on the customer's preference structure. It addresses the need of insurance companies to extend their core business with different types of supplementary services. A choice-based conjoint analysis is conducted which considers the price for the insurance product, the insurance franchise, the non-claims bonus as well as post-accident services and value-added services. Based on the results from the conjoint study among 1053 car drivers in Switzerland in August 2009, Hierarchical Bayes estimation is applied in order to assess individual preference values. In addition to a significant influence of the value-added services on the overall Preference structure, different customer groups are found in an adjacent cluster analysis which is based on the individual preference values. While two clusters represent the traditional price-driven customers, two further clusters are identified, which are dominated by the presence of the supplementary service offerings. The results provide evidence that customer segments exist which are strongly influenced by the provision of value-added services. The findings challenge the perspective of insurance companies on their customers which they believe are almost purely driven by price.

To really fulfill the ambitious goals for a sustainable public transit, innovations should aim on innovating value-configuration spaces through re-inventing the way value is created between service providers and customers. Solving the upcoming traffic challenges in urban regions, research can either focus on advancing single provision of public transit services, or it could use the perspective of value-configuration spaces. Value-configuration spaces consist of value creation and value networks. We applied the perspective of value-configuration spaces to multiple urban regions in industrialized and newly-industrializing countries. Our findings replicate theoretical contributions of elements for conceptualizing value networks and value cocreation. Theoretical extensions refer to the value-configuration spaces for public transit services in urban regions, which seem to evolve through five distinct stages: (1) establishment of reliability of single transportation modes, (2) integration of different transit modes, (3) regional integration, (4) service extension, and (5) individual mobility. Interestingly, whereas these five stages are relatively stable across urban regions in industrialized and newly-industrializing countries, value network and value creations differ according to whether urban regions are located inindustrialized and newly-industrializing countries

Die Studie «Wachstum durch Dienstleistungen» wurde gemeinsam von Swissmem und dem Institut für Technologiemanagement der Universität St. Gallen anfangs 2005 durchgeführt. 187 Fir- men (20% der Verbands-Mitglieder) haben auf eine Umfrage geantwortet. Die wesentlichen Kernaussagen der Studie können wie folgt zusammengefasst werden: Die steigende Nachfrage der Kunden nach Dienstleistungen, das hohe Ertrags- und Margenpotenzial von Dienstleistungen und die Differenzierungsmöglichkeiten im Vergleich zum Wettbewerb sind die hauptsächlichen Treiber für den Ausbau des Dienstleistungsgeschäfts. Diese Treiber führen dazu, dass einzelne Unternehmen bereits heute intensiv in den Dienstleistungsbereich investieren. Die Investitionen werden in der Zukunft weiter gesteigert. Durch Investitionen können Unternehmen den Erfolg im Dienstleistungsbereich steigern. Die Swissmem Mitglieder verfügen heute durchaus über ein umfangreiches Dienstleistungsangebot. Zukünftig wird das Dienstleistungsangebot nochmals selektiv ausgebaut. Grössere Unternehmen konzentrieren sich stärker auf Dienstleistungen, die Kunden in ihrem Geschäft unterstützen. Kleinere und Mittlere Unternehmen geben an, zukünftig mehr Service- und War- tungs-Dienstleistungen sowie verkaufsbegleitende Dienstleistungen anzubieten. Die Verrechenbarkeit von Dienstleistungen ist insgesamt relativ gut. Bei kleinen und mittleren Unternehmen besteht jedoch ein wesentlicher Bedarf, die Verrechnung von Dienstleistungen zu steigern. Der Erfolg im Dienstleistungsbereich ist bisher zufrieden stellend. Sowohl bei der Profitabilität als auch beim Dienstleistungsumsatz können einige Unternehmen Erfolge aufweisen. Trotz dieser ersten Erfolge müssen die Unternehmen jedoch den Gewinn- und Umsatzbeitrag von Dienstleistungen weiter ausbauen. Um den Erfolg weiter auszubauen, sollten Unternehmen folgende Faktoren beachten: Dienstleistungen müssen ähnlich wie Produkte systematisch entwickelt und intensiv vermarktet werden. Eine klare Dienstleistungsstrategie ist zu erarbeiten, die weltweite Dienstleistungsorganisation ist weiter auszubauen. Im Vergleich zu den Erfolgen beim Ausbau des Dienstleistungsgeschäfts in Europa ist der Erfolg in China signifikant geringer. Der bisherigen China Euphorie steht somit die Realität von unzureichendem Umsatz und Profitabilität von Dienstleistungen gegenüber. Ursächlich hierfür ist, dass bisher die Unternehmen noch nicht über eine Systematik zum Ausbau des Dienstleistungsgeschäfts in China verfügen.

Arbeitsbericht

Purpose: The aim of the study is to provide insight into the competences and management of manufacturers’ salespeople selling advanced services and hybrid offerings Design/Methodology/Approach: An exploratory research design was adopted, using interview data from sales managers in seven firms in the Information & Communication Technology (ICT) sector Findings: Five competences and management practices were identified: salespeople’s knowledge; creation of productised offerings; adaptive selling; teamwork/internal networking; sales control/reward systems. Originality/Value: Sales is one of the key challenges for manufacturers looking to become more servitized. This study extends and refines previous research in this field by identifying a number of competences and management practices required by manufacturers to enable the salesforce to become more effective at selling advanced services and hybrid offerings.

Purpose: Multiple studies identify servitization challenges and some explore firm responses to them. These challenges appear difficult for manufacturers to overcome; possibly because servitization is a complex change process/journey with multiple business logics and trajectories. Four main types of servitization challenge (and responses) are recognised in the literature, and work has explored many of these challenges in more detail, but without necessarily exploring whether the challenges are interconnected. This paper explores the inter-relationships between servitization challenges, identifying a sequential series of challenges and the responses adopted to overcome these challenges. Design/Methodology/Approach: We use a case study methodology, exploring the servitization challenges and responses at four manufacturers.Findings: We find that manufacturers face layered challenges, that they appear to solve in order. As manufacturers overcame the first challenge they increased attempts to respond to subsequent sets of challenges.Originality/Value: The notion that challenges are hierarchically layered may go some way to explaining why servitization was historically envisaged to involve a journey from a product- to a service-focused state. We challenge the majority of extant literature, in that while the transformation process might be a journey, not all firms become fully servitized - some retain a product-focused mind-set, and their transformation journeys differ.

Purpose: The aim of this paper is to develop a model, which illuminates the transformation journey towards servitization in the manufacturing context. Design/Methodology/Approach: This is a theoretical paper based on extensive review of literature on organisation change and transformation, and servitization. This was followed by a series of structured engagement workshops with senior executives of 10 multinational manufacturers in order to synthesis the propositions and further inform the development of the framework. Findings: Our analysis demonstrates that the organisational transformation can be explained as four stages of development, which the manufacturers proceed through according to the impacts of five forces. Originality/Value: Previous studies on servitization succeed at identifying different stages towards servitization. However, the stages are loosely defined and struggled to demonstrate the relevant transformation pathways. This paper has, therefore, addressed this issue.