Implications of Service-related Business Models on Product Development Processes

Abstract

Product-service systems (PSS) in machinery and plant engineering offer various convincing value propositions such as increased productivity and customization for industrial customers combined with environmental benefits for the overall system. Sustainability is promoted by a reduction of emissions and material use through services like recycling, refurbishment and retrofitting as well as a shared ownership or use model. In order to implement PSS, Original Equipment Manufacturers (OEM) are required to focus on several key activities with Life Cycle Engineering as one of the most important aspects. Based on the results of an in-depth literature analysis, it is possible to generically describe new service-related business models for companies in the field of machinery and plant engineering that result from offering PSS. This paper investigates dependencies and effects of these business models on the product development process by analyzing constitutive features of the business model and determining their consequences for the product development process. A domain mapping matrix is used as a method to detect influences of different business model aspects on the product development process. Research findings highlight the importance of a close integration of product and service development processes. The development of services has to be systemized. Companies need to develop a networking architecture to link their PSS components and analyze usage data. User integration into the development process is necessary in order to ensure a comprehensive fulfillment of customers’ needs. The share of IT professionals has to be raised as well as interdisciplinary work and service mentality. Networks and partnerships with various stakeholders are possible approaches to face challenges resulting from an increased system complexity.