Digital Servitization Requires a Dynamic Business Model Evolution
Transitioning to smart solutions necessitates a continuous and discontinuous interplay between evolving business models and digital technologies, impacting value proposition, delivery, and capture.
International Journal of Operations & Production Management · 2021
Key Findings
- 01Successful smart solutions require an ecosystem value delivery system involving suppliers, distributors, partners, and customers.
- 02Multiple value capture mechanisms (efficiency, accountability, shared customer value, novelty) emerge once ecosystem relationships are aligned.
- 03Digital servitization involves stages of both discontinuous (new value propositions/delivery systems) and continuous (improvement of existing elements) interplay between business models and digital technologies.
Application
Design takeaway
Integrate business model innovation with technological development, focusing on building collaborative ecosystems to deliver and capture value from smart solutions.
How to apply
When designing a new smart product or service, map out the potential ecosystem partners and consider how the business model will evolve to support its long-term success and value capture.
Project actions
- 01Consider how your design project could evolve into a service or smart solution over time.
- 02Think about who else needs to be involved (partners, suppliers) for your design to succeed.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Provides a process perspective on digital servitization.
- +Integrates business model theory with technological innovation.
Limitations
It can be challenging to fully research the business model evolution of a company without direct access to internal strategic documents.
Reliability & validity
The case study method provides rich, in-depth data but may have limited generalizability. Triangulation of data sources (e.g., interviews, company reports) would enhance validity.
Think critically
To what extent does the 'discontinuous' aspect of business model change create significant risks for established manufacturing companies, and how can design mitigate these risks?
Design Principles
"Embrace iterative business model evolution as a core component of digital product development."
For design practitioners, understanding this dynamic interplay is crucial for developing products and services that not only leverage new technologies but also fundamentally reshape how value is created and captured. It highlights the need for a holistic approach that integrates technological innovation with strategic business model adaptation.
What This Means for Your Design
To make smart products that work well, companies need to change how they do business, not just the technology. They have to work with others and find new ways to make money from their smart ideas.
How to use in your project
- 1.Use this research to justify why your design project needs to consider business model implications beyond the initial product concept.
- 2.Reference the continuous and discontinuous interplay to explain the iterative nature of design and development for smart solutions.
Add to My Project
Quick Cite
(2021). On the road to digital servitization – The (dis)continuous interplay between business model and digital technology. International Journal of Operations & Production Management. https://doi.org/10.1108/ijopm-08-2020-0544 Retrieved from https://designdex.org/study/4762e533-ed09-4aac-8572-3344ffb84666/digital-servitization-requires-a-dynamic-business-model-evolution
Paragraph starter
The transition to digital servitization, as exemplified by companies like Gree, underscores the critical need for design projects to integrate business model evolution with technological advancement. This research highlights that successful smart solutions are not solely product-driven but emerge from a dynamic interplay between continuous improvement of existing business elements and discontinuous creation of new value propositions and delivery systems, enabled by digital technologies. Therefore, a comprehensive design approach must consider the formation of value-generating ecosystems and adaptive value capture mechanisms.
Source
International Journal of Operations & Production Management
On the road to digital servitization – The (dis)continuous interplay between business model and digital technology
journal · 2021
View sourceQuestions about this research
- What does the research say about digital servitization requires a dynamic business model evolution?
- Integrate business model innovation with technological development, focusing on building collaborative ecosystems to deliver and capture value from smart solutions. Evidence: International Journal of Operations & Production Management (2021).
- Why does "Digital Servitization Requires a Dynamic Business Model Evolution" matter for design?
- For design practitioners, understanding this dynamic interplay is crucial for developing products and services that not only leverage new technologies but also fundamentally reshape how value is created and captured. It highlights the need for a holistic approach that integrates technological innovation with strategic business model adaptation.
- How can designers apply this research?
- Integrate business model innovation with technological development, focusing on building collaborative ecosystems to deliver and capture value from smart solutions.
- What were the main findings?
- Successful smart solutions require an ecosystem value delivery system involving suppliers, distributors, partners, and customers.. Multiple value capture mechanisms (efficiency, accountability, shared customer value, novelty) emerge once ecosystem relationships are aligned.. Digital servitization involves stages of both discontinuous (new value propositions/delivery systems) and continuous (improvement of existing elements) interplay between business models and digital technologies.
- What research method was used?
- Case Study.
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2021 journal from International Journal of Operations & Production Management.
- What should I do differently in my next project?
- When designing a new smart product or service, map out the potential ecosystem partners and consider how the business model will evolve to support its long-term success and value capture.
- What are the limitations?
- The study focuses on a single case, which may limit the generalizability of findings to other industries or company sizes.
- Is there evidence that business model affects design outcomes?
- Companies need to build an ecosystem to deliver smart solutions, which then enables new ways to capture value. This transition happens through distinct stages where new business models are created and enabled by digital tech, while existing models are continuously refined. For design practitioners, understanding this d Source: International Journal of Operations & Production Management (2021).
- Where does this digital servitization research apply?
- Manufacturing industry, specifically the transition to digital servitization. It sits within innovation & design research on designdex.org.
Related research topics
business model design research · evidence on business model · does business model improve design outcomes · digital servitization studies for designers · business model and digital servitization findings · innovation & design research evidence