Digital servitization: How data-driven services drive transformation

Abstract

The infusion of data-driven services in manufacturing provides new opportunities for long-term competitive advantage; however, it also poses new challenges and entails tradeoffs among strategic options. Digital servitization changes intra-firm processes and customer relationships as well as overall ecosystem dynamics. Drawing on an extensive study of ABB Marine & Ports, a market-leading systems integrator, the concept of digital servitization is examined by analyzing its key characteristics, including opportunities and challenges for manufacturers. The resource integration patterns that connect actors and the dual role of technology in both increasing resource integration complexity and in facilitating the coordination of complexity are discussed. Advancing digital servitization requires fostering service-centricity and executing strategic change initiatives for both the internal organization and the broader ecosystem. Firms must undertake three interlinked changes: (1) digital, (2) organizational, and (3) ecosystem transformations. In addition to contributing to the service literature, these findings provide actionable insights for managers.

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