Capturing and enhancing provider value in product-service systems throughout the lifecycle: A systematic approach

Abstract

Although the transition from product seller to product-service system (PSS) provider implies fundamental changes in both value creation for customers and value capture by the provider, prior research has largely focused on the investigation and enhancement of customer value through PSSs. In contrast, a discussion of the changes in how providers attain value and support to enhance this in industrial practice is lacking at this time. This article presents a systematic, empirically-based approach to analyze and enhance PSS providers’ value capture throughout the lifecycle. This is achieved by two methods provider value analysis (PVA) facilitates a structured assessment of the value capture during the provision of PSSs in the use phase of the lifecycle, while provider value evaluation (ProVa) operationalizes the results of this analysis in the design phase to facilitate an improved value capture in the coming iteration. As the approach was developed in close collaboration with a large-scale PSS provider, the article further reports the results of its application in a case study spanning two years. As a result of using PVA, value dimensions of broad relevance for PSS providers are presented, supported by findings of applying the method at an additional PSS provider. Through the approach presented and case study results attained, the article points out how the design and management of a PSS, focusing on the provider’s value and available benefits throughout the lifecycle, can be enhanced in industry, while extending the academic body of knowledge on the value capture of PSS providers and its implications for PSS design and provision.