Capability Framework Implementing Pay-Per-Outcome Business Model in Equipment Manufacturing Companies

Abstract

The primary objective of this paper is to enhance our understanding of the capabilities necessary for implementing a pay-per-outcome business model and how equipment manufacturing companies can successfully implement such a business model. Based on systematic literature research, we analysed 12 research publications that discussed pay-per-outcome capabilities in the equipment manufacturing industry. We identified 36 capabilities and formulated a capability framework for pay-per-outcome business models in the equipment manufacturing industry. We also identified that pay-per-outcome business models require specific capabilities related to customer relationship and contracting, compared with other service-based business models (such as pay-per-use business models). Since earlier studies have failed to distinguish the capabilities necessary for pay-per-outcome business models from those for other types of product–service system business models or focused on some specific required capabilities for the former business models, we contribute to current business model literature by uncovering the unique characteristics of pay-per-outcome business models in the equipment manufacturing industry.