Background Studies

What is digital servitization and how is the economy changing …


Cosè la digital servitization e come sta cambiando leconomia Sono passati 30 a…

What digital servitization is and how the economy is changing It has been exactly 30 years since the publication of the paper by Vandermerwe & Rada (1988) in which the theme of servitization was introduced. In the three decades up until today the concept has been developed and enriched from many points of view and approaches up to generate a multiplicity of theoretical-empirical definitions and analyzes, sometimes even with some imprecision. Recently, for example, we talk about industrial as a service. Servitization and tertiarization of the economy A wide examination of the literature on the subject as well as a large set of case studies have been published in a monographic issue of the journal Industrial Marketing Management (2018 n. 60) where the proliferation of models and concepts has been subjected to an analysis comparative theory (Brax and Visentin 2017). All this should not come as a surprise for the following reasons: 1) in recent decades we have entered a phase of radical techno-economic changes, so that the progressive conceptualization of issues related to servitization necessarily had to be significantly affected. 2) Definitional plurality is the consequence of both the previous point and the development of theories with which the multidimensional dynamics in progress involving various areas are analyzed and interpreted: institutional technical-scientific social regulation. The aim of this paper is to try to clarify some fundamental aspects because one notices among other things the emergence of some terminological and conceptual confusion which occasionally induces someone to exchange servitization for the tertiarization of the economy. The latter is a kind of umbrella concept within which a series of innovative processes can be encompassed which would require a more careful analysis of a certain intellectual and methodological rigor and finally greater expository clarity. It is precisely the case of servitization which, even in the presence of a defining pluralism, can be characterized in fairly precise terms perhaps extended with specifications and fine-tuned to take into account the real processes in turn subject to intense and extensive changes. From the supply of goods and services to the offer of integrated systems The initial contribution of Vandermerwe & Rada (1988) referred to the manufacturing corporations that could increase their business by expanding their offer through a broader portfolio composed of products and services to go to the marketing of complex sets of self-service knowledge support service products (Kowalkowski et al. 2017). Over the years the servitization process and the set of services contained in this term has been considerably extended to include not only the original industrial realities and B2B relations, user-producer relations and above all the relations of interdependence and exchange between economic-productive entities along the entire value chain leading to an output. In other words, the process of servitization means that they progressively change the configurations of the activities carried out by a multiplicity of companies according to various modalities, making more and more permeable the boundaries between them in the realization of a material or immaterial good. If until the 80s the focus of a company was to produce goods or services with servitization the focus becomes to produce integrated units or systems with services in propulsive function (Vandermerwe & Rada 1988: 314). Analysis of the servitization process One of the consequences of this trajectory was a great diversification of configurations of activities aimed at generating value and therefore a variety in their categorization. It could not be that way, since the progressive strengthening of digital technologies capable of connecting people, systems, products and services over the decade has generated enormous potential for transforming companies towards better performance with an ever-expanding set of objectives (MIT Center for Digital Business & Capgemini 2011). The relentless development of a cyber-infrastructure has also allowed to initiate both back-end transformations or improvements in the ability of companies to invent and pursue efficient and effective solutions, as well as front-end transformations or the acquisition of tools to better understand the role of consumers in the process of value creation (Coreynen et al. 2017). In this framework the pyramidal representation elaborated by analysis of the servitization process is interesting (Fig. 1 Source: Coreynen et al. 2017 Fig.1) The horizontal axis indicates the focus of the services (customer product) while the vertical describes the orientation to value for itself (1) together with the customer (2) for the customers (3) who correspond respectively to who they want to do themselves who want us to do it for them. Digital and redefinition of business ontologies Digital technologies, so to speak, redefine the business world where ontology in the economic-engineering horizon means the definition of the world and the entities that populate it together with their typology and their interactive relationships. Using an even more technical jargon, the ontological space within which business potential can be configured is redefined, determining the need for a profound cultural shift at many levels because the nature of the products and services connected to the type of agents and the relationships between them changes. in addition to the emergence of subjects and protagonists both completely new and as a result of functions and acquisitions of existing entities. And so it happened in various countries that a growing number of companies focused on the product have gradually adopted business models inclusive of services (Cusumano et al. 2015) in search of a differentiation of the offer of a dynamic relationship with the customer of a continuous improvement of the components of the market-oriented product-service system with which one interacts more and more strategically, that is, trying to anticipate and orient trends. Digital servitization The expression digital servitization summarizes the potential ever-expanding expansion of digital service delivery embedded in a physical product (Vendrell-Herrero et al 2017): music taxi Hotel production of complex and simple aircraft engines turbines and wind turbines locomotives snowshoes tennis wearable objects to make just a few examples lead us to believe that we go towards a general redefinition of the processes of designing processes and products of the combinations of activities that lead to a specific output (material and immaterial) of its life cycle and its functionality. In other words, a physical or immaterial object beyond its object consistency can be seen as a set of constantly evolving features, most of which can be modified, added or replaced, by correct adaptations. Digital technologies therefore make techno-economic dynamics a combinatorial space (Arthur 2009) in the sense that they constitute the physical-cybernetic infrastructure by continuous evolution on the basis of the incessant flows of information and knowledge of downstream and upstream interdependencies between companies (Vendrell-Herrero et al . 2017). This is particularly true in today's historical phase in which output and value creation processes become complex systems that derive from the combination of different domains of knowledge. Servitization enrichment and diversification of the offer Servitization conceived as a process of enrichment and diversification of the offer therefore requires an incessant increase in the skills of companies to measure themselves against a world characterized by digital ubiquity and ubiquitous computing. Consequently, strategic adjustments to rethinking the configurations of activities aimed at creating value, the development of interactive structures at multiple levels are essential ingredients to achieve a solid and changeable competitive space. It is logical to assume that the current scenario centered on the digital (digital twin) representation of processes and products from the nano-scale to the ordinary scale requires constant attention to the reconfiguration of intercompany activities and relationships as the foundation of one's business model. The servitization process is not irreversible. However, it must be borne in mind that the process of servitization is not irreversible: there are cases of deservitization, that is to say, abandonment of servitization strategies due to a series of causes: non-profitable financial inter-company and extra-company interdependencies insufficient capacity to integrate different knowledge inadequate knowledge with respect to the strategic choices made (Voltakoski 2017). The creation of a combinatorial system of variable activities requires peculiar capabilities, capabilities and strategic resources that are not available to everyone but do not think that they are precluded to Small and Medium Enterprises. Certainly General Electric Microsoft's IBM Siemens Rolls Royce (aircraft engines) are the most successful cases also through repeated strategic turns due to incorrect choices; however, there are many other positive experiences in numerous other sectors of activity even in the publishing industry which have as their protagonists non-leading global companies. The previous (incomplete) list of products at the center of servitization strategies proves this. The end point of these brief reflections is therefore the following: the irreversible trajectory towards the digital representation of processes and outputs together with the physical-digital infrastructure creates an enormous potential of new business opportunities transversal to several economic-productive sectors. Today more than ever it is necessary for companies to possess certain properties: a systemic vision evolutionary approach propensity for interdisciplinary capacity for strategic anticipation. A dynamic knowledge base and an internal and external interactive environment are necessary conditions even if not sufficient in order to pursue the sustainability of a competitive strategy in a highly dynamic competitive context. _________________________________________________________ Arthur W.B. (2000). The Nature of Technology: What it is and how it evolves. Free Press New York NY Brax S. A. Visintin F. (2017). Meta-model of servitization: The integrative profiling approach. Industrial Marketing Management 60 Coreynen W. Matthyssens P. Van Bockhaven W. (2017). Boosting servitization through digitization: Pathways and dynamic resource configurations for manufacturers. Industrial Marketing Management 60 Cusumano M. A. Kahl S. J. Suarez F. F. (2015). Services industry evolution and competitive strategies of product firms. Strategic Management Journal 36 (4) Kowalkowski C. Gebauer H. Kamp B. Parry G. (2017). Servitization and deservitization: Overview of concepts and definitions 60 MIT Center for Digital Business & Capgemini Consulting (2011). Digital transformation: A road-map for billion-dollar organizations Vandermerwe S. Rada J. (1988). Servitization of business: Adding value by adding services. European Management Journal 6 (4) 314324 Vendrell-Herrero F. Bustinza O. Parry G. Georgantzis N. (2017). Servitization digitization and supply chain interdependency. Industrial Marketing Management 60 6981 Valtakoski A. (2017). Explaining servitization failure and deservitization: A knowledgebased perspective. Industrial Marketing Management 60. The article What is digital servitization and how is the economy changing comes from Digital Agenda.


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