Proactive contracting + Service design = Success!

Abstract

The servitisation of the manufacturing industry involves a shift from products to services and from transactions to relationships. Companies are becoming more dependent on each other, which entails a growing importance of good business relationships and relationship management. Contracts have been widely neglected in prior service research, yet they can play an important role as relationship management tools. Contracts can guide the service relationship and the parties' collaboration and interaction, but only if they are designed to do so. Contractual issues should be considered early on, starting with service/product development. Collaboration, both internally and externally, and the promotion of good practices are essential ingredients of the proactive approach. Contract productisation and visualisation, along with the merger of proactive contracting and service design, provide promising new ways to competitive advantage and increased business success.

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