Measuring Servitization Progress and Outcome:The Case of ‘Advanced Services’

The purpose of this paper is to establish a framework for assessing the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’ – a complex bundling of products and services, whereby manufacturers offer capabilities and outcomes instead of products alone. ‘Advanced services’ represent the most complex offering in the current servitization trend among manufacturers. However, current performance measures lack the breadth and focus to assess progress or outcomes, and so support research and practice of organisational transformation efforts required. To address this gap the paper investigates how a manufacturer’s efforts to become an ‘advanced services’ provider can be comprehensively measured, and develops a framework for assessing the transformation journey towards becoming an ‘advanced services’ provider. The research method is based on (1) a systematic literature review process to create a comprehensive set of service-related performance measures that are available to assess a manufacturer’s servitization efforts, followed by (2) an engagement with an expert panel to synthesise the identified measures and create a set of ‘advanced services’ performance measures. The proposed framework is presented as a scorecard that can be used in practice to assess the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’

Servitization Transformation Process, 2018-2020

The concept of servitization is getting established in the literature, and yet the processes of organisational transformation that manufacturers undergo to compete through advanced services has received much less attention. Therefore, the objective of this data set was to (i) develops a model that enables a description of the servitization processes, (ii) the principal stages of organisational change, and (iii) the forces impacting these processes. It is based on a series of 14 case studies of the process of servitization over time in multinational manufacturers. Evidence and analysis from these cases are used to establish that manufacturers undergo four stages of organisational maturity (Exploration, Engagement, Expansion and Exploitation), through which an organisation progresses according to the pressures of five principal forces (customer pull, technology push, value network positioning, organisational readiness, and organisational commitment). This progression can be characterised as a business growth model with multiple crises or tipping points. This contributes to our understanding of the process of servitization and proposes a model which can be used to explain progression. It also forms the basis to better prepare manufacturers as to what to expect as they embark on a servitization journey.Manufacturing organisations in developed western economies are increasingly shifting from traditional product-based offerings towards service-oriented business models. Firms such as Rolls Royce, GE, Xerox and Siemens are remaining competitive by creating additional value to their customers through the services they provide, and taking a share of this value. Over the years, providing services embedded within products' offerings has gradually become a fundamental business constituent for manufacturing organisations. Understanding the organisational transformation required to operate in this way has been an enduring challenge to both researchers and practitioners, and only a few notable contributions address the topic. Some prominent scholars have set out the benefits of, and barriers to, undertaking the transformation , while others describe the state of being a 'servitized' manufacturer and the impact this delivers, but few really deal holistically with the dynamics of the process of transformation itself, or distinguish what is particular about servitization over general organisational change. Although there are significant literature and theoretical frameworks in the general field of organisational change, no models exist to explain the servitization transformation process. This project addresses this gap by consolidating the servitization knowledge base from the perspective of organisational change. Our integrative approach in this project will complement our goal of conducting a broad and inclusive study of the servitization transformation, which leads to identifying the stages of transformation, the key factors and forces that influence such transformation, and the key tasks and decisions in each stage. The purpose of the project is, therefore, to document the transformation of a manufacturing organisation as it moves towards competing through advanced services. In order to do this, the following research questions will be addressed: (i) What stages might an organisation expect to go through as it progresses towards servitization? What are the critical decisions and activities that occur in each stage? (Process) (ii) What are the principal factors and forces that affect progression through these stages? (Context) (iii) How do these stages and forces interplay as a model to demonstrate pathways towards servitization? (Content)</p

Digital Servitization: The Next “Big Thing” in Manufacturing Industries

Part 8: Designing and Delivering Smart Services in the Digital AgeInternational audienceManufacturing firms increasingly produce and provide services along with their traditional physical products. This process, better known as servitization, is a mature theme in the literature, flourishing in recent years. Digital disruption is propelling manufacturers to move on towards digital transformation and deliver digital services. Prior research investigated the impact of servitization measured by the traditional services. However, the role of digital technologies in manufacturing is neglected. This paper intends to shed light on the impact of digital service portfolio antecedents on firm performance. Our analysis used the Serbian dataset of 240 manufacturing firms from the European Manufacturing Survey conducted in 2018. The empirical results show that, in manufacturing firms, digital services can significantly increase the turnover ratio. Results indicate that management in manufacturing companies should utilize digital services such as Web-based services for customized product design and Web-based offers for product utilization to maximize firm’s turnover ratio and upgrade current service business model