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The authors seek to understand the process of digital servitization as a shift of manufacturing companies from the provision of standard products and services to smart solutions. Specifically, the authors focus on changes in the business model (i.e. the value proposition, the value delivery system and the value capture mechanism) for digital servitization.

The authors examine a Chinese air conditioner manufacturer, Gree, who became the global leader with their smart solutions. These solutions included performance-based contracts underpinned by artificial intelligence (AI)-powered air conditioners that automatically adjust to environmental changes and are capable of remote monitoring and servicing thanks to its Internet of things (IoT) technology.

To successfully offer smart solution value propositions, a manufacturer needs an ecosystem value delivery system composed of suppliers, distributors, partners and customers. Once the ecosystem relationships are well aligned, the manufacturer gains value with multiple value capture mechanisms (i.e. efficiency, accountability, shared customer value and novelty). To arrive at this point, a manufacturer has to pass through different stages that are characterized by both discontinuous and continuous interplay between business models and digital technologies. At the beginning of each stage, new value propositions and value delivery systems are first discontinuously created and then enabled with digital technology. As a result, new value capture mechanisms are activated. Meanwhile, the elements of the existing business model are continuously improved.

By combining process-perspective and business-model lenses, the authors offer nuanced insights into how digital servitization unfolds.

Executives can obtain insights into the business model elements, they need to change over the course of digital servitization and how to manage the process.

A longitudinal case study of a traditional manufacturer that has achieved stellar success through digital servitization business models development.

The paper attempts to address the following research questions (RQs): RQ1: What are the main research topics within PSS research? RQ2: What are future trends for PSS research?

Twenty years of research (1999–2018) on product-service systems (PSS) produced a significant amount of scientific literature on the topic. As the PSS field is relatively new and fragmented across different disciplines, a review of the prior and relevant literature is important in order to provide the necessary framework for understanding current developments and future perspectives. This paper aims to review and organize research contributions regarding PSS. A machine-learning algorithm, namely Latent Dirichlet Allocation, has been applied to the whole literature corpus on PSS in order to understand its structure.

The adopted approach resulted in the definition of eight distinct and representative topics able to deal adequately with the multidisciplinarity of the PSS. Furthermore, a systematic review of the literature is proposed to summarize the state-of-the-art and limitations in the identified PSS research topics. Based on this critical analysis, major gaps and future research challenges are presented and discussed.

On the basis of the results of the topic landscape, the paper presents some potential research opportunities on PSSs. In particular, challenges, transversal to the eight research topics and related to recent technology trends and digital transformation, have been discussed.

The purpose of this paper is to understand the strategic management of a technology-enabled shift from a product-centric to a service-centric logic and to identify the sociotechnical dynamics underlying this transition. The study focuses on how manufacturers manage to create value in industrial markets through digital servitization.

An abductive research approach is used to investigate two manufacturing firms, and an interpretive framework is used as an analytical template. A cross-case analysis is conducted.

The case companies strategically managed sociotechnical processes of digitization to co-create value. Their service orientation delineates dissimilarity in terms of digital servitization. It reflects a viable ecosystem that moves toward datatization through adaptation in one case and a viable ecosystem that moves toward digitization through reconfiguration in the other case.

A theoretically grounded, empirically informed framework is proposed to detect transformational mechanisms to manage value co-creation in digitally servitized contexts, thus contributing to ecosystem viability.

This is the first study to adopt a system perspective such as the viable system approach combined with service-dominant logic to reconceptualize the overall sociotechnical processes and the underlying mechanisms leading to digitized value creation. In line with a systems view and a systematic process based on a transformative attitude toward digital servitization, the empirically informed framework identifies specific co-creation activities and recursive feedback loops.

The purpose of this paper is to identify integrated solutions business as the first generation of servitized offerings and modular solution offerings as the second development phase in servitization of original equipment manufacturers. This study examines how the servitized manufacturer, Kone, moves from integrated solutions to modular solutions business and develops the requisite capabilities to design, produce and implement modular solution offerings.

The paper reports a longitudinal case study of a provider of integrated solutions installed in buildings. During the ten years studied, the manufacturer implemented a strategic initiative to modularize its integrated solutions offering.

The firm’s transition to modular solutions progressed through three major capability development phases: solutions based on ad hoc integration, smart solutions based on modular design and through-chain modularity. The modular structure aims at fostering the efficiency of the solution offering and the associated production system.

Leveraging the benefits of modularity calls for an aligned combination of strategic, operational and technical capabilities contributing to the integration of resources in a modular production system for the solution providers’ competitive performance.

The study reports how a solution provider can develop the operational capabilities to integrate the core and peripheral components into the solution, and orchestrate the modular production system.

This study is a rare longitudinal analysis of how a manufacturer builds a modular offering, the solution platform and the required competitive capabilities to provide the solution.

This paper studies the Digital Service Innovation (DSI) concept by systematically reviewing earlier studies from various scholarly communities. This study aims to recognize how recent advances in DSI literature from different research streams complement and can be incorporated into the growing digital servitization literature to define better and understand DSI.

After systematically identifying 123 relevant articles, this study employed complementary methods, such as author bibliographic coupling, linguistic text mining/textual analysis and qualitative content analyses.

This paper first maps the intellectual structure and boundaries of the DSI-related communities and qualitatively assesses their characteristics. These communities are (1) Innovation for digital servitization, (2) Service innovation in the digital age and (3) Adoption of novel e-services enabled by information system development. Next, the composition of the DSI concept is examined and depicted to comprehend the notion's critical dimensions. The findings discuss the range of theories and methods in the existing research, including antecedents, processes and outcomes of DSI.

This study reviews, extends the understanding of origins and critically evaluates DSI-related research. Moreover, the paper redefines and clarifies the structure and boundaries of the DSI-concept. In doing so, it elaborates on the substance of DSI and identifies the essential themes for its understanding and conceptualization. Thus, the study helps the future development of the concept and allows knowledge accumulation by bridging adjacent research communities. It helps researchers and managers navigate the foggy emerging research landscape.

Service managers increasingly strive to achieve sustainability through strategies centered on circularity. With a focus on saving, extending and (re)generating resources and their enclosing service systems, circularity can contribute to environmental, social and financial gains. Yet, the notion of circularity is surprisingly understudied in service research. This article seeks to provide an initial conceptual understanding of circular service management, introducing illustrative strategies and research priorities for circular service management. This paper provides a roadmap for scholars, practitioners and policymakers to develop a deeper understanding of the opportunities from adopting circular services.

The authors explore the concept of circular service management by drawing upon existing literature on sustainability, circularity and service research. Strategies of circular service management and research priorities emerge on the basis of industry best practice examples and research on sustainability challenges and opportunities.

Service researchers have largely ignored the concept and role of circularity for service businesses. Extant research on the topic nearly exclusively features in non-service journals and/or does not seek to advance service theory through circularity. This article argues that circular service management enables the implementation of service thinking in the pursuit of sustainability and outlines four types of circular service management strategies.

The authors introduce the concept of circular service management and highlight the role of service research for designing and managing circular systems and operations. This article also offers a research agenda connecting managerial challenges and opportunities with key service research priorities for circular service management. This provides a roadmap for scholars, practitioners and policymakers to develop a deeper understanding of pursuing circular services, thereby contributing to a more sustainable future.

This paper aims to propose an interpretive framework to understand how machine learning (ML) affects the way companies interact with their ecosystem and how the introduction of digital technologies affects the value co-creation (VCC) process.

This study bases on configuration theory, which entails two main methodological phases. In the first phase the authors define the theoretically-derived interpretive framework through a literature review. In the second phase the authors adopt a case study methodology to inductively analyze the theoretically-derived domains and their relationships within a configuration.

ML enables multi-directional knowledge flows among value co-creators and expands the scope of VCC beyond the boundaries of the firm-client relationship. However, it determines a substantive imbalance in knowledge management power among the actors involved in VCC. ML positively impacts value co-creators’ performance but also requires significant organizational changes. To benefit from VCC via ML, value co-creators must be aligned in terms of digital maturity.

The paper answers the call for more theoretical and empirical research on the impact of the introduction of Industry 4.0 technology in companies and their ecosystem. It intends to improve the understanding of how ML technology affects the determinants and the process of VCC by providing both a static and dynamic analysis of the topic.

Digital twin (DT) is an emerging technology that enables sophisticated interaction between physical objects and their virtual replicas. Although DT has recently gained significant attraction in both industry and academia, there is no systematic understanding of DT from its development history to its different concepts and applications in disparate disciplines. The majority of DT literature focuses on the conceptual development of DT frameworks for a specific implementation area. Hence, this paper provides a state-of-the-art review of DT history, different definitions and models, and six types of key enabling technologies. The review also provides a comprehensive survey of DT applications from two perspectives: (1) applications in four product-lifecycle phases, i.e. product design, manufacturing, operation and maintenance, and recycling and (2) applications in four categorized engineering fields, including aerospace engineering, tunneling and underground engineering, wind engineering and Internet of things (IoT) applications. DT frameworks, characteristic components, key technologies and specific applications are extracted for each DT category in this paper. A comprehensive survey of the DT references reveals the following findings: (1) The majority of existing DT models only involve one-way data transfer from physical entities to virtual models and (2) There is a lack of consideration of the environmental coupling, which results in the inaccurate representation of the virtual components in existing DT models. Thus, this paper highlights the role of environmental factor in DT enabling technologies and in categorized engineering applications. In addition, the review discusses the key challenges and provides future work for constructing DTs of complex engineering systems.

This study aims to develop a systematic method called servitization maturity model to support companies in developing distinctive capabilities for successful servitization.

The concept of maturity models is adopted to support companies in developing distinctive capabilities for servitization. A systematic literature review and case study approach are employed to develop the maturity model.

The findings highlight 46 capabilities classified into seven categories: strategy and leadership, performance, offerings, customers, organization, network and digital technology. Furthermore, the evolutionary path is defined by combining two types of levels, i.e. capability and maturity levels, to develop these capabilities.

The evolutionary path was partially validated through the application, while further investigation is required to validate the evolutionary path. Therefore, future research should investigate the further validation of the evolutionary path by conducting multiple case studies.

The proposed maturity model enables companies to not only capture the bigger picture of the required capabilities without oversight, but also determine a process for improving the requisite capabilities with feasible efforts.

Existing maturity models focused on the transition from less to more advanced services. However, recent studies emphasized that companies need to determine strategies that reflect their capabilities rather than simply move toward more advanced services. Based on this assumption, this study provides successive stages that enable companies to improve their capabilities through feasible efforts.

The purpose of this paper is to contribute to the understanding of the servitization phenomenon of product-centric companies, by identifying the resources, capabilities and organizational aspects needed to successfully deploy a servitized business model (BM).

By adopting a literature-based approach, this paper develops a servitization maturity model (SeMM) aimed at assessing and positioning companies in the servitization journey. The paper also illustrates the model application to two small and medium-sized enterprises (SMEs), a machinery and a forklift truck company.

The SeMM identifies a set of 85 critical requirements that are used to evaluate the servitization level of product-centric companies, through a specific five-stage measurement scale. The requirements are categorized into: five maturity dimensions (organizational approach, process management, performance management, tools, capabilities) and nine BM Canvas components. The empirical application exemplifies how the SeMM can support managers in identifying and bridging the gaps in their servitization journey.

The SeMM adopts an original bi-dimensional approach and provides an operationalization of the servitization process through the identification of specific critical requirements framed on established BM and maturity dimensions taken from the literature. Moreover, the model responds to a call for research to develop practitioner-oriented tools and guidelines to support the servitization process, in particular for SMEs, and to the need to go beyond to measures of servitization based on indicators about number of services offered or their turnover.