Boosting servitization through digitization: Pathways and dynamic resource configurations for manufacturers

TLDR: In this article, the importance of digital technologies for services in manufacturing has often been posited, but current literature has neglected to explain how companies can leverage digital methods to increase their service offering.

About: This article is published in Industrial Marketing Management.The article was published on 2017-01-01 and is currently open access. It has received 437 citations till now.

Figures

Figure 3: case companies’ pathways

Figure 2: this study’s interpretive framework

Table 2: data collection

Table 3: comparative table of case companies according to servitization pathway

Table 1: company cases

Figure 1: the servitization pyramid

Frequently asked questions

Q1. What contributions have the authors mentioned in the paper "Boosting servitization through digitization : pathways and dynamic resource configurations for manufacturers reference:" ?

In this article the authors contribute to current theory by examining how digitization can enable servitization for manufacturers. By performing a multiple-case study at four manufacturing SMEs, the authors provide evidence for a priming and a capability effect. Through a dynamic resource-based lens, the barriers, dynamic resource configurations and competitive benefits specific to each pathway are discussed. Finally, this paper offers managers insight on successfully reaching higher service levels through development of digital assets, and on the skills necessary to further integrate into customers ’ processes. 

Q2. What are the future works in "Boosting servitization through digitization : pathways and dynamic resource configurations for manufacturers reference:" ?

Beyond their contributions to existing literature, the authors do note a number of limitations to their work that call for further research. Though the three pathways offer distinct possibilities for reaching the first and second level of the pyramid ( to provide a certain input or agree on a performance metric ), providing customers with a solution entails other changes. Further research is needed on the specific capabilities necessary for manufacturers to reach this highest level of service offering. Further quantitative research is needed to develop and test hypotheses regarding, for example, the impact of different dynamic resource configurations on service growth, and the relative success of various digital investments as far as their actual “ return on investment ” is concerned. 

Q3. What is the main argument of Day?

Day (1994) furthermore asserts that the creative use of ICT enhances capabilities that support distinct inside-out, outside-in and boundary-spanning processes. 

Q4. What is the role of the customer interface in the development of a hybrid offering?

In addition, involving and engaging users (Kindström & Kowalkowski, 2014) during the development of such customer interfaces is often crucial to a successful implementation. 

Q5. What is the definition of the hybrid offering?

In addition, companies need to possess the ability to continuously balance both frontoffice customization and back-office production and delivery processes, otherwise known as the hybrid offering deployment capability (Ulaga & Reinartz, 2011). 

Q6. What is the main reason why Alpha is still negotiating with potential customers?

negotiation with potential customers still mostly takes place with the Purchasing Manager, slowing the decision-making process at potential customers. 

Q7. What is the strategic relevance of distinct resource configurations?

The strategic relevance of distinct resource configurations comes from supporting distinct strategic options (Borch, Huse, & Senneseth, 1999) or paths (Black & Boal, 1994), as is already established for product-oriented servitization strategies (Raddats & Easingwood, 2010). 

Q8. What is the need for a hybrid offering sales capability in both companies?

In terms of dynamic capabilities, the need for a hybrid offering sales capability is observed in both companies, emphasizing a capacity to reach key decision makers and sell value-based (Ulaga & Reinartz, 2011). 

Q9. What are the main reasons Alpha has run into these barriers?

Despite this success, Alpha has run into a number of barriers when deploying such services for the customer, such as the company’s sales force requiring more advanced skills to better engage with the customer. 

Q10. Why did Beta not implement the new web app within the foreseen timeframe?

For instance, Beta was unable to implement the new web app within the foreseen timeframe due to a lack of customer involvement in the early development stages, while Gamma chose to work closely with one specific key customer, opening the door for other customers to follow suit.