Service transformation: How can it be achieved?

Abstract

Service transformation calls for a revolutionary strategic mindset within service firms. Service firms aspire to achieve a distinctive vision through service transformation, often engaging technology and digitalization as critical partners in creating long-term firm success in the market by nurturing enhanced customer and stakeholder benefits. Therefore, it is imperative for us to examine, understand, and seek ways in which transformation can be utilized effectively by service firms. A new conceptualization is proposed that highlights how service transformation can follow many strategic paths, ranging from a relatively minor linear evolutionary reformation of service offerings to a cyclical and ongoing complete creative destruction and reincarnation of the firm. This manuscript first proposes an organizing framework to understand the internal and external factors that have the potential to render service transformation achievable, as well as the range of internal and external outcomes that can result from successful transformation. We then draw upon theories of evolution to delineate the process of transformation over time in service contexts, resulting in a conceptual model of service transformation that articulates three viable pathways to service transformation, which we call the “3Rs of Service Transformation” – reformation, renovation, and reincarnation. We define and provide examples of these three paths of service transformation and identify situations and contexts in which each approach may be most appropriate for certain firms. We conclude with a discussion of future research directions.