In the last few years, digital servitization which could be referred to as an organization’s shift from selling products to Product Service Systems (PSS) through the utilization of digital tools has gained extensive research attention (Grandinetti et al., 2020; Paiola and Gebauer, 2020; Paiola et al., 2021). Not only because digital servitization could change the company’s value proposition, value creation activities, as well as how value is captured from customers in an radical way (Parida et al., 2014; Kohtamäki et al., 2019; Suppatvech, Godsell and Day, 2019). But also since firms could economically and environmentally benefit from such an Business model innovation. On the one hand by generating a stable flow of income over the product lifecycle, thus making companies’ revenues more robust against economic downturns. (Confente, Buratti and Russo, 2015; Abdelkafi et al., 2022). And on the other hand by positively impacting the environment through re-manufacturing, extending product lifecycles, and reduces emissions (Reim, Parida and Örtqvist, 2015; Yang and Evans, 2019). However, the transition towards an digital servitization business model is an wide ranging and complex process which often could take several years, requiring significant organizational changes towards operating processes, capabilities, and platforms (Martinez et al., 2010, 2019; Baines et al., 2020). Many manufacturing firms struggle to make the transition from product-centric to services-centric businesses primarily because they don’t know how to manage the process in an meaningful way (Baines et al., 2020).
As a result manufacturing companies often experience significant challenges during the transition including embedding the mindset for integration in an organizational culture, effective internal and external communication, delivering integrated offerings, augmenting internal processes and acquiring capabilities, strategically aligning service provisions, and managing relationships with suppliers (Baines et al., 2009; Martinez et al., 2010).
Although scholars have investigated the processes and challenges of servitization from different angles since the late 1990s, so far, the servitization field lacks a clear methodology for researchers and practitioners to overcome such barriers during a servitization process (Khanra et al., 2021). Although an action research method could provide an meaningful format for researchers and practitioners to investigate digital servitization project together in order to provide tooling and intervention to achieve meaningful change to the firm at hand . Many issues in organizations such as digital servitization are processual from nature. Underestimating the processual context in digital servitization projects by the means of action research could lead to misunderstanding and misuse of tools and interventions resulting in potential wrongdoing towards the organization. In aiming to better understand the processual aspect of digital servitization projects as well as to provide more meaningful and positive interventions to process related phenomenon, in this paper we provide a methodology that combines process and action research thinking. Through different case study examples of a servitization research project in the SME context, we show how this method could lead to more meaningful diagnoses and interventions in order to create positive change to process related phenomenon.
These case studies are structured around SME’s that manufacture machines e.g. packaging machines for the food industry. A common characteristic is that these companies are internationally active. The machines (end products) are installed in quite many countries over the world. To be able to monitor the performance of the machines, these are equipped with appropriate sensor to read out machine data. A common issue for the participating SME’s is that they are looking for ways to turn the collected data into value for their customers and thus create an earning model, next to the traditional product oriented business model. The perceived outcome of this study is a transition of an existing business model. Process and action research will support and better understand the emergences of a service business model in an organization aswell as their recurring barriers. This methods thereby consonant with the continuous processes of mutual adaptation, mutual anticipation and meaning making that occurs when people have to work together to achieve goals.
Digital Servitization, Business model innovation, Process research, Action Research, Methodology
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