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1 – 4 of 4Kati Stormi, Teemu Laine, Petri Suomala and Tapio Elomaa
The purpose of this paper is to examine how installed base information could help servitizing original equipment manufacturers (OEMs) forecast and support their industrial service…
Abstract
Purpose
The purpose of this paper is to examine how installed base information could help servitizing original equipment manufacturers (OEMs) forecast and support their industrial service sales, and thus increase OEMs’ understanding regarding the dynamics of their customers lifetime values (CLVs).
Design/methodology/approach
This work constitutes a constructive research aiming to arrive at a practically relevant, yet scientific model. It involves a case study that employs statistical methods to analyze real-life quantitative data about sales and the global installed base.
Findings
The study introduces a forecasting model for industrial service sales, which considers the characteristics of the installed base and predicts the number of active customers and their yearly volume. The forecasting model performs well compared to other approaches (Croston’s method) suitable for similar data. However, reliable results require comprehensive, up-to-date information about the installed base.
Research limitations/implications
The study contributes to the servitization literature by introducing a new method for utilizing installed base information and, thus, a novel approach for improving business profitability.
Practical implications
OEMs can use the forecasting model to predict the demand for – and measure the performance of – their industrial services. To-the-point predictions can help OEMs organize field services and service production effectively and identify potential customers, thus managing their CLV accordingly. At the same time, the findings imply new requirements for managing the installed base information among the OEMs, to understand and realize the industrial service business potential. However, the results have their limitations concerning the design and use of the statistical model in comparison with alternative approaches.
Originality/value
The study presents a unique method for employing installed base information to manage the CLV and supplement the servitization literature.
Details
Keywords
Kati Tuulikki Stormi, Teemu Laine and Tuomas Korhonen
The purpose of this study is to reflect upon the feasibility of agile methodologies, Scrum in particular, to supplement the procedural design and implementation of performance…
Abstract
Purpose
The purpose of this study is to reflect upon the feasibility of agile methodologies, Scrum in particular, to supplement the procedural design and implementation of performance measurement systems (PMS).
Design/methodology/approach
The study is an interventionist case study that applied agile methodologies in the PMS development. Researchers actively participated in the PMS development, e.g. researchers designed some of the performance measurement prototypes in order to facilitate the agile development.
Findings
The study outlines an agile approach suitable for PMS development. The paper answers the topical needs for adaptability and agility in management accounting, by applying agile methodologies into PMS development. PMS development does not take place only as a project or process that systematically progresses from the measure selection to measure implementation. Instead, as the requirements for the PMS change during the development project, management may reject some measures and new measures emerge as the understanding about changing situations increase. Agile methodologies are a methodological way to respond to the inevitable change and to enhance management accounting adaptability.
Research limitations/implications
This study contributes to the PMS literature by proposing that agile development methodologies can advance organizational features that increase management accounting adaptability. As a result, the study proposes a new approach for PMS development to supplement existing ones. Agile methodologies are especially suitable for extending the PMS in new, yet relatively immature areas of performance measurement. The new approach applies Scrum principles in PMS development. By drawing from the theories of performance measurement (system) development and enabling PMS, the paper furthers academic understanding about agile development of accounting information systems.
Practical implications
Companies can use the proposed approach in PMS development, particularly after the initial system implementation in redesigning the system. The approach may increase the PMS impact in organizations and prevent PMS implementation failures.
Originality/value
The paper identifies the potential of using agile methodologies to enhance PMS adaptability and provides preliminary evidence of the potential of such approach in supplementing processual PMS development frameworks.
Details
Keywords
Katy Evans, Sally Whitney-Mitchell and Katherine Runswick-Cole