Research-Technology Management
ISSN: 0895-6308 (Print) 1930-0166 (Online) Journal homepage: http://www.tandfonline.com/loi/urtm20
Digitalized Product-Service Systems in
Manufacturing Firms: A Case Study Analysis
Christian Lerch & Matthias Gotsch
To cite this article: Christian Lerch & Matthias Gotsch (2015) Digitalized Product-Service Systems
in Manufacturing Firms: A Case Study Analysis, Research-Technology Management, 58:5, 45-52,
DOI: 10.5437/08956308X5805357
To link to this article: https://doi.org/10.5437/08956308X5805357
Published online: 23 Dec 2015.
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FEATURE ARTICLE
Digitalized Product-Service Systems in
Manufacturing Firms
A Case Study Analysis
Linking digital systems with physical products to create novel product-service bundles that provide services independently and
proactively can enable advanced services and promote growth.
Christian Lerch and Matthias Gotsch
OVERVIEW: The merging trends of digitalization and servitization harbor extensive and largely unexplored potential for
manufacturing firms. Digital systems can be linked with product-service bundles to build novel digitalized product-service
systems (PSS), which use digital architectures to provide services independently and proactively. This paper gives an overview of service digitalization in industrial firms and describes three types of digitalized PSS, differentiated by purpose and
by technical and organizational architecture. Each of the three types addresses a different stage of the product life cycle and
improves performance or efficiency; in the long run, digitalized PSS can help improve a firm’s overall innovation activity.
KEYWORDS: Servitization, Digitalization, Product-service systems
The term servitization has been used in recent years to describe a growing service orientation among product manufacturers, who are increasingly moving from simply selling
products to offering supportive services tailored to the product (Baines et al. 2009; Wise and Baumgartner 1999; Vandermerwe and Rada 1988). These services range from
traditional product-related services such as maintenance, repair, and training to advanced customer-oriented services
(Lay 2014; Oliva and Kallenberg 2003; Mathieu 2001). Advanced services typically take the form of product-service
systems (PSS), or physical products bundled with intangible
Christian Lerch is a senior researcher at the Competence Center for Sustainability and Infrastructure Systems at the Fraunhofer Institute for Systems
and Innovation Research ISI, Karlsruhe, Germany. He studied economics
engineering at the Karlsruhe Institute of Technology and wrote a PhD thesis
on managing interactions of product and service innovations in industrial
companies at FU Berlin. He has directed several research projects in the
field of industrial services, analyzing the causes and effects of servitization
in manufacturing and its contribution to industrial change. The results of
his studies have been published in national and international articles.
christian.lerch@isi.fraunhofer.de
Matthias Gotsch is a senior researcher at the Competence Center for
Sustainability and Infrastructure Systems at the Fraunhofer Institute for Systems and Innovation Research ISI, Karlsruhe, Germany. He holds a PhD from
Brandenburg Technical University and a diploma in industrial engineering
with a focus on industrial business, technology and innovation management
from the University of Erlangen-Nürnberg, Germany. He has expertise in
service innovations, industrial services, and innovative service-based business models and has contributed several papers and articles to the field of
service science. matthias.gotsch@isi.fraunhofer.de
DOI: 10.5437/08956308X5805357
services in a customized manner to fulfill highly individual
customer needs (Tukker and Tischner 2006; Goedkoop et al.
1999). These innovative, individualized product-service bundles increase the value delivered to the customer and hence
increase the competitiveness of the provider (Boyt and
Harvey 1997).
The move toward servitization has coincided with a rising
trend toward digitalization, with manufacturers equipping
products with intelligent digital systems that allow the products to operate independently of human intervention and
communicate with other machines. As a logical consequence
of the confluence of servitization with this trend toward intelligent machines, an increasing number of manufacturers
are using digital systems to support their services (Münster
and Meiren 2011), creating totally new industrial productservice offerings, such as comprehensive remote services that
bring digital and physical systems together to pave the way
for, for instance, availability guarantees. These new kinds of
offerings may in turn lead to far-reaching reconfigurations of
the mechanisms of value creation in manufacturing.
Thus, manufacturers cannot afford to ignore these emerging forces, which have the power to completely reshape the
industrial landscape. Companies that do not keep up with
these developments may find themselves threatened with
extinction in the near future, as competitors with more customized, responsive offerings gain advantage. Three practical
case studies from our joint research projects on servitization
show how companies can combine digital systems with PSS
to harvest value and build competitive advantage.
Research-Technology Management • September—October 2015
| 45
Digitalization significantly increases the
complexity, abstraction, and problemsolving skills needed by employees.
Services Innovation and Digitalization
Previous studies of servitization have assumed that manufacturers move from product manufacturer to solution provider
along a defined transformation path (Gebauer, Fleisch, and
Friedli 2005; Gebauer 2004). This transition path is typically
described as taking place in stages, with each stage offering
different potentials for differentiation (see, for example,
Matthyssens and Vandenbempt 2010; Gebauer, BravoSanchez, and Fleisch 2008; Matthyssens and Vandenbempt
2008; Penttinen and Palmer 2007; Oliva and Kallenberg
2003; More 2001). At the end of the path, manufacturers
offer innovative PSS, such as availability guarantees or
build–operate–transfer (BOT) models, which increase customer value on the one hand and create competitive advantage for the provider on the other (Brady, Davies, and Gann
2005; Boyt and Harvey 1997).
While PSS have been widely discussed—see Velamuri,
Neyer, and Möslein (2011) for a review of the literature—the
effect of the digital revolution on this servitization pathway
has been less well explored. Most articles have dealt with the
new challenges and impacts of digitalized services, focusing
on how they differ from more traditional product-related
services. What is missing in the literature is a comprehensive
framework bringing together the emerging trends of servitization and digitalization in one conceptual structure. The integration of digitalization with services innovation has
important implications for services. For instance, because
digital services can be provided independent of manufacturer
and customer location, traditional service characteristics like
perishability and inseparability do not apply to digital service
creation (Holtbrügge, Holzmüller, and von Wangenheim
2007). Additionally, the increasing digitalization of services
demands new capabilities, opening up opportunities to simplify, accelerate, or optimize processes and create new forms
of customer integration (Schuh and Fabry 2014).
Researchers have identified a number of factors that may
either hinder or stimulate the digitalization of industrial
services. For example, the complexity of services offered
seems to influence the degree of digitalization: the more
advanced and ambitious the services, the more support is
needed from smart ICT solutions (Lerch and Gotsch 2014;
Gebauer, Gustafsson, and Vittel 2011). The complexity of
the core product and production batch sizes also influence
digitalization. Generally speaking, companies producing
more complex products or smaller batch sizes tend to have
closer contacts with customers and offer products with a
higher degree of individualization (Dachs et al. 2013). These
complex and individualized machines and diverse systems
46 | Research-Technology Management
require a huge range of accompanying services (Seegy
2009; Rainfurth 2003; Borgmeier 2002), some of which can
be offered digitally.
The degree of digitalization of the core product influences
the degree of digitalization of accompanying services. Digitalization makes it technically feasible to connect products to
the Internet and assign them an IP address so that they can
communicate and interact, with other components and with
remote controllers, thus enabling more advanced services.
However, in order to integrate services effectively into the
communication network, the services must be digitalized in
close coordination with the physical components (Hoffmann
2014; Bauer et al. 2014).
Finally, some company attributes affect the degree of service digitalization, including company size and the share of
sales from exports. Large enterprises are more likely to have
the resources and competencies needed to create and support digital components and digital services. SMEs often do
not have IT service divisions and thus are not able to provide
individualized digital solutions (Reichwald, Krcmar, and
Nippa 2009; Rainfurth 2003).
The share of a company’s sales that come from exports
seems to be another driver of service digitalization. Companies with a high proportion of export sales benefit from new
digital opportunities because digital and remote-controlled
services allow downstream activities to be offered independent of location. Maintenance and repair services can be
provided remotely, without requiring local personnel. Conversely, high-quality products that are equipped with the
technology to support such geographically independent services encourage foreign customers to purchase (Holtbrügge,
Holzmüller, and von Wangenheim 2007).
However, delivering these services requires ubiquitous,
real-time communication networks with high data transfer
rates and the ability to move large amounts of data. Without
such a stable and reliable technical infrastructure, digital services cannot be offered economically. Only broadband networks provide the capability and stability required to allow
providers and customers to access all the advantages of digital
solutions (Bauer et al. 2014; Westkämper et al. 2013). Thus,
digitized services may face significant challenges where such
in infrastructure is not available.
Another major barrier to the digitalization of services is a
lack of qualified employees to develop and provide such services (Kagermann 2014). Digitalization significantly increases the complexity, abstraction, and problem-solving
skills needed by all employees. Further, those employees directly providing the services need a technical qualification
profile that includes knowledge of engineering, mechatronics, and IT. Special training and further professional development courses must be offered to overcome this barrier and
prepare staff to offer digital services.
Very few authors have attempted to offer a theoretical
model for the evolution from a product focus to the offering
of advanced digitalized services. Lerch and Gotsch (2014)
build on existing servitization transformation models, analyzing the role of digitalization in the transition process.
Digitalized Product-Service Systems in Manufacturing Firms
Based on an analysis of three case studies, they argue that a
more developed service orientation with more complex service offerings leads to a greater need for digital solutions. At
the same time, they argue, the integration of ICT systems
into products opens up new avenues for providing innovative services.
The interactive effect of servitization and digitalization
means that manufacturers progress along a transition path
that is influenced by both digitalization and servitization, and
shaped by the individual characteristics and activities of the
manufacturer (Lerch and Gotsch 2014). At each stage, companies reach an equilibrium point, which remains stable as
long as the company does not change its service offerings. At
equilibrium, the firm can minimize investment in innovation
processes and easily accommodate sales of existing PSS.
However, increasing competition, external forces, or internal
developments can trigger innovation, destabilizing the system and moving the manufacturer along the transformation
path until a new equilibrium is reached.
Ultimately, Lerch and Gotsch (2014) develop a transformation model that includes four generic stages (Figure 1):
1. Manufacturer: Manufacturers at the first stage provide
obligatory product-related services, such as installation
or maintenance and repair, and use standard ICT solutions to support services, including digital text files,
e-mail, and videoconferencing. ICT solutions are used
for daily work but have almost no impact on how service
offerings are differentiated in the market.
2. IT-based services: Companies at this stage use ICT solutions
to improve existing service offerings. A well-known and
widely spread example is the concept of teleservices, the
monitoring and controlling of machines over distance.
As a result, companies are able to provide services faster,
with less resource input and higher quality.
3. Pure digital services: At this stage, companies offer novel
services enabled by ICT systems, including softwarebased simulations, virtual or augmented reality applications, and digital technical analyses. These services both
extend the company’s service offerings and significantly
enhance the performance of the product or service that
is the core offering.
4. Digitalized PSS: Manufacturers at this stage not only provide complex PSS to their customers, but also incorporate
ICT solutions as a novel component in the productservice bundle, creating intelligent, independent operating systems that deliver the highest level of availability
possible and optimize operations while reducing resource
inputs.
Digitalized PSS are frequently offered via outcomes-based
business models in which revenues are tied to the efficiencies delivered by the product-service bundle (Lerch and
Gotsch 2014). Thus, digitalized PSS may be defined as an
integrated bundle of physical products, intangible services,
and digital architectures designed to fulfill individual customer needs via automated, independent operation, with
the goal to significantly improve customer outcomes. We
argue that as the final step of the transition to a services
focus, digitalized PSS move firms beyond traditional service
offerings in their high degree of automation and in their
FIGURE 1. Servitization-digitalization transformation framework (translated from Lerch and Gotsch 2014)
Digitalized Product-Service Systems in Manufacturing Firms
September—October 2015
| 47
Small and medium-sized companies can
share resources and expertise to produce
PSS that benefit all parties, extending
the portfolios of all participants.
ability to act independently and forecast product service requirements and failure modes.
Digitalized PSS in Manufacturing Firms—A Case Study
Analysis
To deepen our understanding of digitalized PSS, we conducted a series of joint research studies in German manufacturing firms in which the authors worked with companies to
help them develop new digitalized PSS to solve customer
problems and build market presence. Although the participating firms vary widely in size and specific industry, all
three have advanced service offerings that are connected
with digital systems, creating innovative product-service
bundles (Table 1). These three cases are obviously specific to
the particular needs of the firm involved; however, they represent different types of digitalized PSS and have a generic
character that allows for broadly relevant conclusions.
The primary source of data for the case studies is transcripts of workshops held with each firm to conceptualize
ideas for new digitalized PSS. The workshops, which we
organized and conducted, were held virtually or face to face
and lasted between 45 minutes and three hours. Due to their
novelty, the PSS developed in these cases are not necessarily
market-ready; therefore, these cases should be understood as
describing the development of prototypes for digitalized PSS.
Nevertheless, we believe the PSS developed in these cases are
likely to attain broad market diffusion.
Smart Service Delivery
Smart service delivery provides support for maintenance and
repair, optimizing service processes and maintenance schedules via intelligent systems that communicate their service
needs, allowing companies to act proactively to avoid breakdowns. For a small plant constructor engaged in developing,
designing, and assembling stages that are then installed in
theaters around the world, smart service delivery could help
streamline maintenance and optimize resources, for both the
firm and its customers.
The company’s current service offerings are well developed compared to the state of the art in this market. They
include maintenance and repairs, tests and verifications, the
supply of spare parts, and a 24-hour service hotline. One particular challenge for this business is the extremely long life
cycle of the stages and the appearance of service needs that
are not always foreseen. Currently, maintenance services and
checks are performed manually, which requires a lot of time
and resources and is error prone. The large distances between
the manufacturer and its clients adds further complexity,
making it impossible for the company to react quickly to
breakdowns and other customer needs. Moreover, most theaters have very few on-site resources for servicing the stages,
making the firm’s service offerings critical to the theaters’
continued operation.
Integrating digital service architectures into the technical
structure of the stages offers a way to address these challenges, by creating an intelligent infrastructure that will allow the stages to observe their status, predict when
components are likely to fail, and communicate this data to
the firm so that maintenance can be scheduled proactively.
The system will also offer recommendations for action to the
stage operator and define the financial implications of each
potential action. The autonomous nature of these systems
will allow the manufacturer to save time now spent on error
diagnostics and optimize its modest resources for maintenance. Some portion of the cost savings may be passed on to
customers, which can create a competitive advantage.
In pursuit of this solution, the company is cooperating
with a manufacturer of electronic systems to develop digital
components that can be integrated into the stages. The electronics manufacturer, which is of a similar size to the primary
firm, is located close to the firm. Its portfolio focuses on radio
data transmission and its offerings range from highly synchronized hardware components to customized wireless solutions. The development of digital services systems is a new
business area for the company.
In addition to demonstrating how a smart service delivery
PSS may work, this case also demonstrates how small or
medium-sized companies can leverage collaboration to create
powerful digitalized PSS. While large enterprises considering
developing digitalized PSS typically face the classical makeor-buy decision, small and medium-sized companies can
share resources and expertise to produce PSS that benefit all
parties, extending the portfolios of all participants.
TABLE 1. Overview of case studies
Case
Company
Firm Size*
1
Theatrical stage
manufacturer
80/n.a.
2
Enameling line
manufacturer
350/€80m
3
Machine tool
manufacturer
1,700/€320m
Service Offerings
Customers
Maintenance and repair, testing, spare parts,
24-hour service hotline
Theaters
Remote services, maintenance and repair, engineering services,
project planning and implementation, training, service hotline
Automotive manufacturers,
Consumer goods manufacturers
Technical support, spare parts, maintenance and repair,
training, inspections, upgrade and retrofit of used machines,
online help desk
Automotive manufacturers
* Firm size given in terms of number of employees/annual sales.
48 | Research-Technology Management
Digitalized Product-Service Systems in Manufacturing Firms
Smart Product Optimization
Smart product optimization deploys digital technologies such
as digital remote monitoring and supervision services to optimize the operation and function of the core product. These
kinds of services provide competitive advantage by delivering
increased value to the customer.
A manufacturer of enameling lines sought to develop
smart optimization PSS as a way to support availability guarantees for customers, thus creating competitive advantage.
The manufacturer is a specialist in surface technology applications, manufacturing products such as spray systems and
wallpaper strippers; it is also involved in the design and construction of enameling lines at customer plants and assembles
solutions for powder and liquid coatings for industrial customers, primarily in the automotive industry. The firm operates globally and has customers throughout Europe and Asia;
about 50 percent of its products are exported. This high export share presents significant challenges for the firm’s service
business, which must provide services over long distances.
In recent years, the manufacturer has steadily expanded
its service offerings, increasingly relying on remote services
to supplement traditional services performed on-site. For instance, the manufacturer has introduced a service hotline
and developed various offerings around engineering services,
project planning, and training. The digital offerings add to the
value the manufacturer delivers to all of its customers, but
they also help address the challenges presented by the geographic dispersion of customers.
Ultimately, the objective of developing and implementing
digital service concepts for this manufacturer is to offer availability guarantees for its machines and plants, which would
allow customers to avoid expensive production outages and
line shutdowns. This would require tying plants at customers’ facilities to the company’s digital architecture. Therefore,
the company’s communication network must be adapted
and upgraded to meet the robust requirements of such services and to be compatible with customers’ sites.
The company believes that the right digital architecture
and accompanying service structures to support preemptive
maintenance could increase system availability by several
percentage points, even given the non-optimal conditions
under which many of its foreign customers operate the
enameling lines. Ultimately, the manufacturer could offer
comprehensive availability guarantees for its machines and
plants under a new business model.
Digital Brain
In the most sophisticated form of digitalized PSS, the digital and physical systems come together to deliver comprehensive remote services. These sophisticated systems pave
the way for lifecycle cost guarantees and similar business
models. At the same time, and even more promising, such
systems can deliver to the service provider important information that can be fed into the innovation process and
used to improve the next generations of products and service offerings. This is the digital brain stage of services
innovation.
Digitalized Product-Service Systems in Manufacturing Firms
For a large machine tool manufacturer, a digital brain approach can help achieve long-term advantages in the form of
lifecycle cost guarantees and precise availability data. The
globally active company mainly supplies automotive manufacturers and offers a comprehensive range of services via
global service centers. Examples of such services include
technical support, maintenance and repair operations, a
spare parts supply service, training, inspections, an online
help desk, and upgrading and retrofitting of used machines.
The manufacturer is increasing digitalization of its products
with two goals in mind: First, by integrating conditionmonitoring systems into its machines, it wants to identify precise availability rates for different components and component
groups. Based on these rates, the manufacturer can then determine the availability and lifecycle costs for the various components of the machine and thus make the full lifecycle cost of
the system transparent and controllable. This would provide
the basis for a contractually defined availability and cost guarantee, providing a far-reaching competitive advantage. Second,
the manufacturer wants to feed the plant data collected as a
result of the first effort back to its product development teams,
to support systematic improvement in new products. Taking
advantage of the operational data, the manufacturer believes,
could shorten product development cycles dramatically.
Ultimately, the firm’s vision is to create an availabilityand cost-oriented PSS using a condition-monitoring system
integrated into the machine as a digital supporting component. The data delivered by the system will allow current information regarding failure behavior, failure cause, and spare
parts requirements to be evaluated and concrete values to be
identified for mean time between failures, mean time to repair, and or mean costs for replacement parts, for individual
components or entire component groups. These data will
provide the initial basis for availability and lifecycle cost guarantees. The condition-monitoring system will also support
those guarantees by allowing the manufacturer to monitor
and control the machine and proactively identify maintenance and repair needs. Thus, the manufacturer can reduce
the risk associated with offering a comprehensive PSS.
The accumulated data can also be fed back to product development to drive product improvements and new solutions.
Thus, the technological solution both enables competitive advantage in the current market, via the provision of lifecycle
cost guarantees, and feeds the company’s innovation process,
building competitive advantage for the future.
Thus, the technological solution both
enables competitive advantage in
the current market and feeds the
company’s innovation process, building
competitive advantage for the future.
September—October 2015
| 49
The Nature of Digitalized PSS
As these cases illustrate, digitalized PSS differ from traditional service offerings in their high degree of automation
and in their ability to forecast likely failures and maintenance needs. This ability arises from the fact that digitalized
PSS integrate not only tangible products and intangible services but also digital architectures. This third component—
the digital architecture—connects the physical product to
the intangible service by providing a medium of communication and provides the capability for autonomy. Therefore,
we argue that the essential attribute of digitalized PSS is
their intelligence. The intelligent character of digitalized
PSS gives them the potential to improve performance and
efficiency significantly, which can lead to far-reaching competitive advantages.
The three types of digitalized PSS explored in our case studies operate at different stages of the product life cycle (Table 2):
• Smart service delivery: Smart service delivery improves the
service process itself, to shorten the time and reduce the
resources required and hence to decrease the costs associated with the service offering. Smart service delivery is
generally associated with maintenance and repair services
and mainly improves the intangible component of the PSS.
• Smart product optimization: Smart product optimization
works to improve the performance and efficiency of the
core product. Smart optimization may save resources or
increase the output or capacity of the product during operation; hence, it mainly improves the physical component of the PSS.
• Digital brain: The digital brain product delivers important information to the provider, which is fed back
into the development process to improve products and
services in the next generation. This type of PSS affects
manufacturers’ innovation activities and becomes effective during research and development. Customers
benefit from these activities via upgrades that make
the digitalized PSS more automated or independent—
such as with a software upgrade—or more efficient or
more powerful—such as with a new or extended physical or service module. The digital brain improves not
just the physical but also the intangible part of the PSS.
These distinct types of digitalized PSS hold the potential to
revolutionize value creation in manufacturing generally.
However, these business models create new dependencies
and risks as well as revenue opportunities (Iansiti and
Lakhani 2014). This trade-off results in a number of challenges for strategic management.
Implications for Strategic Management
The merging of the trends toward digitalization and servitization has extensive and as-yet-unexplored potentials for
manufacturing firms. Concepts based on digitalized PSS
may have far-reaching consequences for industrial firms and
for the entire manufacturing industry. For instance, creating
digitalized PSS will require close collaboration between manufacturing firms and electronic equipment providers, and
delivering those services will build closer relationships between manufacturers and customers. This cross-linking offers the possibility of highly individualized, customer-oriented
solutions that offer significant improvements and real value.
This development may widely change market structures.
However, these kinds of complex, individualized services
won’t come without challenges. The processes of value creation will link the industrial economy and the digital economy, allowing them to grow together, but they will also
greatly increase the number of actors participating in the
value creation process, the complexity of the products, and
the resources and competencies required to create and support them.
To manage this shift successfully, industrial firms must
begin by identifying their service digitalization potential
firstly. This potential includes internal capabilities, of
course, but it also includes the latent needs of customers
and markets. Manufacturers contemplating a shift to services innovation must answer two questions: What kind of
digitalized PSS can the firm handle and what capabilities
must the firm develop to move in this direction? And what
are the needs of current customers and what is the potential for moving into new markets with innovative PSS
bundles? Simply asking these questions can move firms
along the transformation path.
Once the firm has identified its own capabilities to create and the market’s capacity to take up new offerings,
TABLE 2. Types of digitalized PSS
PSS Type
Lifecycle Stage
Focus
Impact
I. Smart Service
Delivery
Maintenance
and repair
Intangible part of PSS
(directly, single product)
•
Reduction of reaction, delivery time
•
Reduction in resource inputs
•
Higher service quality for customer
•
Optimization of performance (greater availability,
higher output)
•
Optimization of efficiency (fewer required resources,
less facility usage)
•
Shortening innovation cycles
•
Triggering of incremental innovation in the short run
(via upgrades)
•
Long-run improvement
II. Smart Product
Optimization
III. Digital Brain
Production
R&D and design
50 | Research-Technology Management
Physical part of PSS (directly,
single product)
Physical and/or intangible
parts of PSS (directly by upgrades,
indirectly in the next generation)
Digitalized Product-Service Systems in Manufacturing Firms
appropriate digital PSS offerings must be designed. Often,
these new offerings will require totally new competencies,
resources, and collaborations. This development process
will, consequently, have a great impact on the firm’s innovation management systems, creating a need for new instruments and processes as well as new capabilities. To be
successful, firms will have to expand their understanding of
innovation management, moving R&D away from its traditional focus on physical products and toward an approach
that integrates additional features, such as services and IT
systems, to create meaningful bundles. This shift is a necessary step for mastering the transformation to servitization.
Finally, as digitalized PSS are introduced to markets, new
management systems will be needed, powered by new
methods and management concepts. The diffusion of digitalized PSS in the market will create new challenges for
their providers. In addition to building a powerful customer
service function with the capacity and authority to handle the
requirements of automated services, firms must learn to work
with highly complex algorithms and an external digital infrastructure as it evolves. These challenges will lead to a totally
new framework for the management of product-service bundles that will affect the full range of strategic management.
Conclusion
As digitalization and servitization come together to
speed manufacturers’ evolution toward a focus on services, firms that are able to master this transformation
will integrate tangible products, intangible services, and
digital architectures to deliver novel digitalized PSS
that provide highly customer-oriented and highly customized solutions. These developments will have far-reaching
consequences for customers and for the value creation process. They will also force firms to broaden and extend their
understanding of innovation management. Manufacturers
must open up their perspective on innovation and rethink
how to manage innovation processes.
This trend will have consequences for the entire economy, creating new markets and new ways of creating and
delivering value, which may be shared by different players.
Future research should focus on a number of different aspects of this trend, to collect data around companies’ experience in delivering new digitalized PSS to market, identify
the technical and economic impact of the digitalized PSS,
and understand their contribution to industrial change.
Only a deeper understanding of the opportunities and challenges presented by digitalized PSS, built on both theoretical and empirical research, will deliver the deeper insights
needed to guide companies through this transition.
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