Creating multi-vendor solutions: the resources and capabilities required.

Purpose – The purpose of this paper is to investigate the resources and capabilities required by manufacturers to develop and deliver multi-vendor solutions. Design/methodology/approach – A multi-case design comprising six UK-based manufacturers: two from each of the aerospace/defence, information technology and telecommunications sectors. Findings – Manufacturers can be characterized by their propensity to include products from other vendors in their solutions; single vendor solution providers (SVSPs) focus on solutions comprising their own products, while multi-vendor solution providers (MVSPs) fully embrace products from other manufacturers. Three capabilities were identified which distinguish MVSPs from SVSPs given the complexity of multi-vendor solutions (expertise specifying the solution, engineers trained in implementing/supporting the solution, partnerships with component suppliers of the solution). These capabilities are underpinned by both technical capability and impartiality in solution specification. Research limitations/implications – MVSPs need to be impartial when specifying customer solutions. They should be guided by the best interests of the customer rather than the interests of the product-based SBUs. Achieving impartiality can conflict with some manufacturers' product heritage. The research has focused on three sectors; further research is needed to test whether the findings are applicable beyond these sectors. Practical implications – Solutions are a valuable approach in creating market differentiation, although not all manufacturers will possess the resources/capabilities to be successful. Originality/value – A continuum of solution providers is proposed; SVSPs at one extreme and MVSPs at the other. The operant resource-based capability “impartiality” was identified as being particularly important to MVSPs in creating value for customers. </jats:sec

Motivations for servitization: The impact of product complexity

Purpose – The purpose of this paper is to identify the commonalities and differences in manufacturers’ motivations to servitise. Design/methodology/approach – UK study based on interviews with 40 managers in 25 companies in 12 sectors. Using the concept of product complexity, sectors were grouped using the Complex Products and systems (CoPS) typology: non-complex products, complex products and systems. Findings – Motivations to servitise were categorised as competitive, demand based (i.e. derived from the customer) or economic. Motivations to servitise vary according to product complexity, although cost savings and improved service quality appear important demand-based motivations for all manufacturers. Non-complex product manufacturers also focus on services to help product differentiation. For CoPS manufacturers, both risk reduction and developing a new revenue stream were important motivations. For uniquely complex product manufacturers, stabilising revenue and increased profitability were strong motivations. For uniquely systems manufacturers, customers sought business transformation, whilst new service business models were also identified. Research limitations/implications – Using the CoPS typology, this study delineates motivations to servitise by sector. The findings show varying motivations to servitise as product complexity increases, although some motivational commonality existed across all groups. Manufacturers may have products of differing complexity within their portfolio. To overcome this limitation the unit of analysis was the strategic business unit. Practical implications – Managers can reflect on and benchmark their motivation for, and opportunities from, servitisation, by considering product complexity. Originality/value – The first study to categorise servitisation motivations by product complexity. Identifying that some customers of systems manufacturers seek business transformation through outsourcing

Exploring the journey to services

Firms are increasingly providing services to complement their product offerings. The vast majority of studies on the service journey, also known as servitization or service transition, examine the challenges and enablers of the process of change through cases studies. Investigations that provide an in-depth longitudinal analysis of the steps involved in the service journey are much rarer. Such a detailed understanding is required in order to appreciate fully how firms can leverage the enablers while overcoming the challenges of servitization. This study investigates what does a service journey look like? It analyzes in some detail the actual service journeys undertaken by three firms in the well-being, engineering and learning sectors. The paper offers four contributions. First, in the change literature, there are two dominant theories: The punctuated equilibrium model and the continuous change model. This study demonstrates that servitization follows a continuous change rather than a punctuated equilibrium. It shows that such continuous change is neither logical nor structured but much more emergent and intuitive in nature. Second, the study provides empirical evidence to support a contingency view of the dominance and sequencing of the different process models of change across the change journey. Third, this research shows the pace of service development and when the coexistence of basic, intermediate and complex services occurs. Finally, it contributes to the literature in the service field by presenting three actual service journeys and the associated seven stages of the service strategy model that organizations should consider when managing their service journeys