The Last Border for Servitization

Abstract

The search for flexibility in the new product development (NPD) entails an increasing need for integration of services and products (servitization). Hence, companies aim at maximizing the customer perceived value, which may demand new capabilities development, besides marketing, engineering and manufacturing. This paper suggests that the ‘customer service’ functional area has a central role in this context, since it deals with customers’ problems in a front-end position, and its knowledge can help other functional areas to develop required capabilities for servitization. Moreover, the level of knowledge transfer (KT) among different functional areas is also proposed as an essential activity to improve the servitization process. Thus, the aim of this paper is to investigate the moderator role of both the customer service area and the KT activities in the impact of the NPD related functional areas on servitization performance. For this purpose, the paper presents a cross-industry survey with 83 Brazilian companies, analyzed by means of an Ordinary Least Square (OLS) regression. Results show that the last border to transcend the servitization barriers in NPD is the integration of the customer service area to the other main functional areas of NPD. Moreover, our findings indicate which areas are the most critical ones in order to address an intensive KT activity to enhance the servitization performance.