Adopting a platform approach in servitization: Leveraging the value of digitalization

Abstract

This study explores how a platform approach facilitates the implementation of advanced service offerings in manufacturing firms. Understanding servitization through a platform approach is important because many manufacturing firms fail to manage the service paradox, that is, the challenge of simultaneously enriching the value proposition by adding services while maintaining cost levels. This study focuses on how adopting a platform approach leverages the value of digital and information technologies (e.g., smart and connected machines) for advanced service offerings. It is argued that a platform approach based on a modular architecture can enable manufacturers to pursue both customization and operational efficiency. Based on multiple case studies, the findings highlight the importance of information modules replacing product and service modules as the core modules for successful servitization. More specifically, the findings illustrate the journeys of manufacturing firms as they leverage value from information modules to facilitate the orchestrating role of back-end units and the builder role of front-end units.