Abstract
The concept of servitization provides major benefits both for the performing company and for the profiting customer. Thus, during the last years many companies were heading for this well-proven direction tempted by expectations, but have been possibly even not aware of some inherent challenges. Since there are some issues even threatening the existence of companies, and some other rather easy to overcome, it is by all means necessary to consider and deal with this matter. Hence, this paper provides an insight into pitfalls in servitization named “service paradox” and addresses corresponding managerial issues. To operationalize the challenges of servitization, this paper suggests a separation among internal back-end challenges and customer-facing front-end issues, which represents the applied framework for their examination. Besides, the matter of appropriate pricing and the inherent shift of risks towards suppliers are discussed. Finally, the last part concludes the analysis outputs and gives suggestions for the future strategies in the enterprise servitization.
Highlights
Servitization is driven by overall digitalization and advanced technologies [1,2,3,4,5]
The first subsection describes the service paradox, which embodies the implications of failure, while the second one deals with managerial issues stemming from diverging beliefs and perceptions [7,8,9,10,11,12]
Besides the vast advantages stemming from the application of an adequate servitization strategy, certain challenges and drawbacks may occur, which by all means have to be taken into consideration and measures are to be applied to diminish undesired effects
Summary
Servitization is driven by overall digitalization and advanced technologies [1,2,3,4,5]. This paper attempts to operationalize the challenges of servitization faced by agile enterprises in such dynamically changing and digitalizing environment. It advocates a separation among internal back-end challenges and customer-facing front-end issues, which represents the applied framework for their examination [6]. Since there are challenges that may affect a certain business, the first section strives to give a brief introduction on the consequences of failing in servitization and its precedent triggers regarding management issues [6]. The final section will elaborate an appropriate framework in order to examine the challenges and drawbacks in detail, which will be discussed in Sections 2 and 3
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