Digital Servitization Research Articles

An exploration of digital servitization business models in manufacturing SMEs

ABSTRACT Digital servitization, the integration of digital technologies into service-based business models, has gained significant traction in the industrial manufacturing sector. However, there is limited understanding of the conditions under which small and medium-sized enterprises (SMEs) develop specific digital servitization business models, owing partly to the lack of an appropriate business model typology. In this study, we develop a generalizable and operationalizable classification of digital servitization business models and identify the environmental and organizational factors that drive such business model innovation. We apply a multinomial logistic regression framework to analyze a dataset of 326 responses from UK manufacturing SMEs, providing insight into how the seven studied factors differentiate among SMEs following different digital servitization business models and more traditional ones (pure product or “just” servitized). The study contributes to the scarce empirical research on digital servitization in SMEs and provides implications for policy and practice.

The role of transformational leadership in navigating digital servitization

The role of transformational leadership in navigating digital servitization

Analysis of the Interaction Between Digital Servitization and ODA on Global Supply Chain Performance: Focusing on the Domestic Materials, Components, and Equipment (MCE) Industry

Analysis of the Interaction Between Digital Servitization and ODA on Global Supply Chain Performance: Focusing on the Domestic Materials, Components, and Equipment (MCE) Industry

The co-evolution of actor engagement and value co-creation on digital platforms

Increasingly, digital platforms connect suppliers, customers, and other ecosystem parties, facilitating the introduction of various Platform-as-a-Service (PaaS) offerings. This study examines the co-evolution of actor engagement (AE), reflecting actors’ dispositions to invest resources in interactions, and value co-creation (VCC), demonstrated through reciprocal resource integration. The focus is on PaaS initiatives in the asset management industry. Using a comparative case study approach, we analyze two fintech-generated PaaS offerings: a freemium model and a subscription-based model. Our findings reveal distinct pathways for platform development and scaling, driven by the interplay between AE and VCC. The freemium model fosters a “viral” community-building path, where early VCC serves as the engine for AE-VCC co-evolution. Conversely, the subscription model follows a “controlled” ecosystem-building path, with AE driving the process. We observe a gradual involvement of additional ecosystem partners, leading to upgraded solutions, expanded PaaS offerings, and platform upscaling. We identify key factors influencing these dynamics, including business model characteristics, actor roles, and feedback loops. Our study contributes to the literature on digital servitization and platform ecosystems by highlighting the importance of integrating AE and VCC practices to enhance platform utilization and scalability. We propose a framework and research propositions to guide future studies on PaaS development in complex, institutionalized industries. These insights also provide implications for managers aiming to implement effective PaaS strategies and foster innovation in the financial services sector.

Pivoting B2B Platform Business Models: From Platform Experimentation to Multi-Platform Integration to Ecosystem Envelopment

The landscape of digital servitization in the manufacturing sector is evolving, marked by a strategic shift from traditional product-centric to platform business models (BMs). Manufacturing firms often employ a blend of approaches to develop business-to-business (B2B) platforms, leading to significant reconfigurations in their BMs. However, manufacturing firms frequently encounter failures in their B2B platform development initiatives, leading them to abandon the initial efforts and/or pivot to alternative platform strategies. Therefore, this study, through an in-depth case study of a leading wind turbine manufacturer, articulates a three-phase pivoting framework for B2B platform BMs with corresponding platform development and strategic orientation. Initially, a manufacturer focused on asset-based product sales, supplemented by asset maintenance services, follows an emergent platformization strategy, characterized by the rise of multiple, independent B2B platforms catering to diverse functions. Next, focusing on the imposed customer journey strategy, the firm shifts towards an imposed and strategic multi-platform integration into an all-encompassing platform supported by artificial intelligence (AI), signaling a maturation of the platform BM to combine the wide range services into an energy-performance-based contract. Finally, the last step of the firm’s platform BM evolution consists of a deliberate open platform strategy to external stakeholders and enveloping its offerings in a broader platform ecosystem. The study showcases advanced AI applications that process wind farm, wind turbine, and blade data, signifying a transformative leap toward value capture via platform ecosystem. The paper advances B2B platform BMs and digital servitization literature, highlighting a progressive approach's efficacy and strategic pivoting.

Digital servitization in digital enterprise: Leveraging digital platform capabilities to unlock data value

Existing research has not clearly defined digital platform capabilities or explained how they unlock data value, limiting the understanding of digital servitization in digital enterprises. Therefore, our study draws upon the Dynamic Capability Theory and employs an exploratory, in-depth single case study approach to bridge this research gap. We identify three key digital platform capabilities: data integration capability, data analytics capability, and data productization capability. Our results demonstrate that these capabilities function as “reservoirs,” “catalysts,” and “pipelines” in a specific iterative sequence to unlock data value, thereby facilitating the successful implementation of digital servitization in digital enterprises. Furthermore, these capabilities are interconnected, collectively forming a dynamic capability—digital platform capability—that unlocks data value by integrating and reconfiguring data resources. Additionally, we delineate the differences in digital servitization between digital enterprises and traditional manufacturers across three dimensions: motivation, key service design activities, and benefits. Our findings enrich the existing literature on digital platform capabilities and data value while expanding the research scope of digital servitization from the perspective of digital enterprises.

Innovation and competitiveness in the industry 4.0 era: the SYNCHRO framework for digital servitization

PurposeThis study aims to develop a theoretical and practical framework to guide manufacturing companies in their transition towards digital servitization (DS), identifying relevant elements in implementing a digital servitization (DS) strategy.Design/methodology/approachWe use a mixed-methods approach combining qualitative interviews and quantitative surveys. Data were collected from 98 manufacturing companies in Spain to understand their DS strategies and outcomes.FindingsThe SYNCHRO framework, encompassing seven components: Stakeholder environment, Yield through co-creation, New capabilities, Connectivity through Industry 4.0, Handling challenges, Restructuring internally and Organizational adaptation, is presented. The results indicate that companies can advance towards DS autonomously, without necessarily relying on co-creation with customers. However, the implementation of Industry 4.0 technologies and internal adaptation are critical for success.Research limitations/implicationsFuture research should expand the sample size and explore the implementation of the SYNCHRO framework in different industrial and geographical contexts to validate its effectiveness.Practical implicationsThe framework provides a structured approach for companies to integrate digital technologies and reconfigure their business models, ensuring improved competitiveness and adaptability in the Industry 4.0 landscape.Social implicationsBy promoting sustainable business practices and enhancing competitiveness, the SYNCHRO framework can contribute to economic growth and stability within manufacturing sectors.Originality/valueThe SYNCHRO framework offers a comprehensive guide for DS, highlighting the importance of internal innovation and organizational flexibility. This framework contributes to the existing literature and provides a tool for companies to enhance business competitiveness and sustainability.

Digital servitization strategies and business model innovation: The role of knowledge-intensive business services

Several studies on digital servitization strategies highlight that their implementation is closely associated with some form of business model innovation. In order to engage in these innovation projects, firms need to expand their internal knowledge and skills while leveraging external organizations that support them in their servitization journey. To date, little is known about the intra-organizational factors accounting for the activation of new relationships with such knowledge-intensive service providers. This paper adopts a configurational approach for investigating the role of knowledge-intensive relationships in digital servitization strategies. Findings are founded on a multi-method investigation based on a structured survey and semi-structured interviews to Italian B2B manufacturers. The study contributes to the digital servitization literature showing the conditions that lead firms to develop relationships with different types of external providers of knowledge-intensive services, highlighting the role of firm’s size, digital readiness, internal commitment, and specific hiring programs in digital servitization paths.

Exploring the landscape of digital servitization: A systematic review.

Digital servitization is a strategic transformation where companies adopt a service-focused approach in response to the prevailing trend of digitalization. Utilizing digital technology, businesses manage product and service operations and develop new value propositions. Further research into digital servitization is essential for maintaining competitiveness and meeting evolving market demands globally. This study aims to comprehend the evolution of digital services from theoretical and practical viewpoints and examines how these challenges are tackled. Utilizing a systematic literature review methodology, the study adopts the PRISMA approach to identify 26 pertinent articles from a pool of 340 papers obtained through a SCOPUS database search. These papers were published between 2019 and 2024 and were retrieved using the keywords ('digitalization OR digital AND servitization OR servitization'). The selection process involved scrutinizing titles, abstracts, and keywords based on predefined criteria. The findings reveal that current digital servitization research emphasizes five determinant variables: digitization, servitization, manufacturing servitization, process innovation, and product innovation. Additionally, response variables influenced by digital servitization were identified, including firm competitiveness, firm performance, financial performance, firm profitability, and sustainable performance. The results of this review point to inconsistencies, underscoring the necessity for additional research into the factors influencing digital servitization across companies beyond the manufacturing sector. This highlights the importance of gaining a deeper understanding of digital servitization strategies and their impacts across various industries. By expanding the scope of research to include a broader range of sectors, researchers can provide more comprehensive insights into the complexities and nuances of digital servitization adoption. This broader perspective enables a more thorough examination of the challenges and opportunities associated with implementing digital servitization strategies, ultimately contributing to a richer understanding of its implications for businesses across diverse industries.

Data-related tensions in digital servitization ecosystems: A systematic literature review

This article investigates data-related tensions and their corresponding coping strategies arising from inter-firm collaboration in digital servitization ecosystems. We conducted a systematic literature review based on thematic and network analyses, covering a sample of 191 articles on digital servitization. The findings offer a set of 11 tensions organized into six dimensions: (i) data strategy, (ii) data partnership governance, (iii) data reliability, (iv) data security and privacy, (v) data interoperability, and (vi) data lifecycle. Additionally, we identify seven coping strategies to address these tensions, which we categorized into three approaches: (i) governance, (ii) technology, and (iii) organization. These tensions and their corresponding coping strategies are arranged and presented in a conceptual framework, leading into five propositions. We also provide a research agenda outlining future research opportunities to expand knowledge on the tensions arising from inter-organizational relationships when creating and providing data-driven services. For practitioners, we offer insights into how to manage ecosystem relationships by suggesting strategies to cope with these tensions, and for policy makers we shed light on crucial matters for future data governance policies and laws.

Servitization and product service system: A literature review on value creation

In recent years, the concept of servitization has been widely applied in the management of enterprises. However, changing customer demands and competitive pressures of the market have compelled enterprises to seek innovation. Simultaneously, in the context of the Industry 4.0 trend, the rapid development of digital technologies has led to an increasing number of studies on the integration of servitization and digitization. Therefore, this study, based on VOSviewer, Gephi, Scimago Graphica, and Histcite, analyzes the current state and development trends of research on servitization and product service system innovation from the perspective of value creation. Initially, basic statistical characteristics such as the influential author, geographical cooperation, and highly cited papers are presented by collecting relevant data from the Web of Science core collection database. Subsequently, this study explores the research hotspots and evolutionary trends in servitization and product service system innovation through keyword co-occurrence analysis and cluster analysis. Lastly, from a literature analysis perspective, the application of advanced technologies in servitization, digital servitization from an ecosystem perspective, and the innovative use of microservices architecture in product service systems are summarized and forecasted as research directions, providing theoretical guidance for future research in servitization.

Exploring configurations of digital servitization capabilities for value creation: An fsQCA approach

Digital servitization is the process by which manufacturing firms transition from offering products to offering solutions that integrate products with services and digital technologies. Although previous studies have looked into the capabilities necessary for this transition, several topics need further exploration to advance the research field. The central issue is how digital servitization capabilities create value for the firm, followed by the need for a comprehensive and updated perspective on digital servitization capabilities to properly explain this relationship. Moreover, the effectiveness of different service delivery capabilities, the role of manufacturing capabilities in the offering of digital services, and how digital servitization capabilities evolve are topics that also need to be clarified. To address these issues, the present study developed a theoretical framework comprising four digital servitization capabilities (Integration, Provision, Orchestration, and Manufacturing) and conducted a multiple case study involving 24 Brazilian manufacturing firms. Employing a configurational approach, fuzzy-set Qualitative Comparative Analysis (fsQCA) was used to analyze the data. The findings reveal that two configurations of digital servitization capabilities enable value creation: Integration, Provision, and Manufacturing or; Integration, Orchestration, and Manufacturing. The study demonstrates that each configuration represents a different way of operationalizing the same digital servitization strategy, advancing the knowledge on the relationship between digital servitization and value creation.

Unfolding the resource configuration and interaction in digital servitization: an exploratory two-stage research design

PurposeThis article aims to unfold digital servitization by exploring the key resources and resource orchestration (i.e. resource configuration and interaction).Design/methodology/approachThis article conducted an explorative two-stage research strategy of Chinese servitized manufacturers using a preliminary case study and fuzzy-set Qualitative Comparative Analysis (fsQCA) design. The data collection was conducted between 2016 and 2021.FindingsThis article identifies five key resources – radical, complex technological resources, complementary, specific market resources and digital resources – and their configurations – leveraging market opportunities, leveraging innovation integration and leveraging resource advantages – to facilitate servitization in the digital age. The findings underscore the interaction between technological and market resources as well as the role of digital resources in promoting the servitization journey.Originality/valueThis article contributes to the understanding of servitization in the digital context by examining the key resources and their interactions involved. It builds upon the configurational logic of servitization, expanding the existing framework in the digital context and highlighting the significance of technological and market resource orchestration and interaction in servitization research. Moreover, the paper contributes through its exploratory two-stage approach, going beyond a conceptual understanding of servitization by focusing on both the factors that enable servitization (WHAT) and the configurations that lead to servitization (HOW). Additionally, the article investigates the attributes of resources as lower-level components, addressing the need to explore the micro-level practice of resource realignment. By providing clarity on the configurations of servitization, the paper offers practical guidelines for practitioners on how to effectively utilize resources and benefit from digital servitization.

Unpacking Digital Servitization, Digital Service Offerings, and Firm Performance

Unpacking Digital Servitization, Digital Service Offerings, and Firm Performance

Pathways for the Implementation of Digital Servitization: Effects on Firm Performance (WITHDRAWN)

Pathways for the Implementation of Digital Servitization: Effects on Firm Performance (WITHDRAWN)

Insights on the role of performance measurement systems in the digital servitization landscape: a longitudinal case study

PurposeThe purpose of this paper is to investigate the role of performance measurement systems (PMS) within the context of digital servitization (DS), especially in collaborations involving multiple actors. The paper adopts a bottom-up ecosystem perspective to gain insights into how companies can effectively manage the complexities of digital transformation in the servitization domain.Design/methodology/approachThis research draws upon a longitudinal case study within the wine and spirit supply chain. It focuses on a logistics company, “GR”, which has promoted a DS strategy to offer advanced services and enhance the competitiveness of the entire ecosystem.FindingsThe study offers valuable insights into the evolution of PMS roles throughout the DS journey, promoting cooperation, coordination, collaboration and control among ecosystem actors, thereby facilitating the development of a DS strategy.Research limitations/implicationsThe study is focused on a logistics company with unique capabilities and networks. Future research should include a broader range of contexts. Furthermore, our analysis focuses on the initial stages of ecosystem emergence, particularly the initiation and momentum phases. Further research should explore how DS impacts organizations in the following ecosystem phases.Practical implicationsThis research offers valuable insights for managers, particularly in the development of DS strategy. It underscores the significance of PMS as key facilitators in crafting DS strategy and in the broader ecosystem evolution. The findings demonstrate that PMS is instrumental across different phases of the servitization process, improving aspects such as performance monitoring, resource allocation, collaboration and communication. Moreover, this study emphasizes the importance for small and medium-sized enterprises manufacturers and logistics firms to build and nurture collaborative relationships with various supply chain stakeholders to successfully implement a servitization strategy. In the wine industry, embracing a multiactor perspective is crucial. The delivery of advanced services necessitates a wide spectrum of knowledge and skills on one hand, and adaptability and flexibility in developing relationships on the other.Originality/valueThe study contributes to the literature on management accounting by exploring the role of PMS in DS. It reveals that PMS acts as a fundamental enabler, promoting seamless coordination and collaboration among various actors involved in DS. This sheds light on the transformative potential of PMS in creating a collaborative environment, where multiple organizations work together to offer value-added services.

Smart circular economy as a service business model: an activity system framework and research agenda

The circular economy is a new sustainability paradigm and a major driver of innovation in industrial firms. Digital servitization, enabled through smart products and their embeddedness in Internet of Things networks, represents a significant lever to generate product life cycle information and achieve collaboration between actors in the value cycle. Empirical studies on how product‐service system business models enable smart circularity are bourgeoning, but a gap exists regarding their microfoundations. Against this background, we adopt an activity system perspective to explore boundary‐spanning and interdependent business model activities. We conducted a qualitative interview study in business‐to‐business industries, from which we derived a funnel framework of smart circular systems (SCS) that spans three layers of the activity system. This contributes to theory in three ways: First, we identify 20 distinct microlevel activities. Second, we explain their interdependencies by classifying them based on the product life cycle into smart use, smart circular, and cross‐strategy activity sets. We also order these activity sets by their data transaction frequency, environmental and economic value, and a firm's typical learning pathway, as well as link them back into circular product design. Third, we highlight increasing servitization to develop the activity system across multiple circular activity sets. Managers can use the funnel as a template to drive circular business models on multiple levels, from adopting individual activities to redesigning the entire activity system.

Exploring the landscape of digital servitization: A systematic review

Background Digital servitization is a strategic transformation where companies adopt a service-focused approach in response to the prevailing trend of digitalization. Utilizing digital technology, businesses manage product and service operations and develop new value propositions. Further research into digital servitization is essential for maintaining competitiveness and meeting evolving market demands globally. This study aims to comprehend the evolution of digital services from theoretical and practical viewpoints and examines how these challenges are tackled. Methods Utilizing a systematic literature review methodology, the study adopts the PRISMA approach to identify 26 pertinent articles from a pool of 340 papers obtained through a SCOPUS database search. These papers were published between 2019 and 2024 and were retrieved using the keywords (‘digitalization OR digital AND servitization OR servitization’). The selection process involved scrutinizing titles, abstracts, and keywords based on predefined criteria. Results The findings reveal that current digital servitization research emphasizes five determinant variables: digitization, servitization, manufacturing servitization, process innovation, and product innovation. Additionally, response variables influenced by digital servitization were identified, including firm competitiveness, firm performance, financial performance, firm profitability, and sustainable performance. Discussion The results of this review point to inconsistencies, underscoring the necessity for additional research into the factors influencing digital servitization across companies beyond the manufacturing sector. This highlights the importance of gaining a deeper understanding of digital servitization strategies and their impacts across various industries. By expanding the scope of research to include a broader range of sectors, researchers can provide more comprehensive insights into the complexities and nuances of digital servitization adoption. This broader perspective enables a more thorough examination of the challenges and opportunities associated with implementing digital servitization strategies, ultimately contributing to a richer understanding of its implications for businesses across diverse industries.

An integrated ISM fuzzy MICMAC approach for unfolding the digital servitization implementation

PurposeThis paper aims to identify the interrelationships among critical factors for digital servitization (DS) implementation.Design/methodology/approachA multi-method research was used. Critical factors for a successful DS implementation were identified using a systematic literature review and expert interviews. The interpretive structural modeling (ISM) method was used to develop a hierarchical model of the identified factors, followed by the fuzzy Matrice d’Impacts Croisés Multiplication Appliqués à un Classement (MICMAC) analysis to assess their dependence and driving powers.FindingsA total of 23 factors for DS implementation were identified, and the ISM model was developed. Based on MICMAC analysis, the factors were also grouped under four categories (dependent, driving, autonomous and linkage). A conceptual framework is proposed, highlighting that DS implementation relies on three main layers of critical factors: crafting alignment, scaling the change and achieving results.Originality/valueThe ISM and fuzzy MICMAC methods used in this study provided valuable insights into the interrelationship among the identified DS factors through a conceptual framework. To the best of the authors’ knowledge, the study is one of the first to identify critical factors influencing DS implementation and develop hierarchical relationships among them.

Benefit distribution and stability analysis of enterprise digital servitization ecosystems from the perspective of value cocreation

PurposeA digital servitization ecosystem (DSE) is a cooperation model based on the concept of value cocreation. However, capability asymmetry among enterprises can lead to unfair benefit distribution and hinder value cocreation and digital service transformation. This paper aims to investigate the impact of the varying capabilities of enterprises (manufacturers, service providers and digital technology providers) on revenue distribution when these enterprises collaborate on digital servitization transformation. This analysis is performed from an ecosystem perspective to facilitate the stable development of DSEs.Design/methodology/approachThe rise of DSEs has engendered extensive literature, and the distribution of benefits within DSEs is in dire need of new mechanisms to adapt to the new competitive environment. The importance of investment contribution, digital servitization level, digitalization level, risk-taking ability, digital servitization effort level and brand awareness is determined by combining the expert scoring method and the entropy value method to determine different weights for manufacturers, service providers and digital technology providers. The Shapley value is used to design the benefit distribution mechanism for stable cooperation among DSE enterprises, thus providing a more scientific basis for the development of cooperative relationships.FindingsDigital servitization is a collaborative process that involves multienterprise activities, and it is significantly affected by digital servitization level and digitalization level. Moreover, constructing the modified Shapley value benefit distribution mechanism according to the relevant capabilities of digital servitization can promote the stable development of DSEs and value cocreation among members.Originality/valueThe main contributions of this study are as follows: First, it summarizes the stability-influencing factors of DSEs on the basis of empirical and literature research on the demand for enterprise digital servitization capabilities and transformation difficulties, delves deeper into the capability composition and cooperative relationship of DSE members and combines the expert scoring method and the entropy value method to determine the weighting to design the benefit distribution mechanism. Second, it reflects system stability and development by studying the revenue distribution of DSE members, thereby expanding the ecosystem construction and business model transformation of digital servitization in the existing research.