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Conversion to client/server systems from host‐centric systems can be accomplished with careful attention to planning and development procedures. A key component in a successful conversion is a customized definition of client/server which complements the organization’s mission. Another key component is the development of an infrastructure which includes hardware, software and people. The training of users and design personnel is crucial to successful conversion. Discusses definitions, strategies, hardware, software, and the pitfalls to be avoided.

The purpose of this paper is to identify and reflect on a set of dynamic capabilities for managing service innovation and applies a dynamic capabilities view (DCV) of firms for managing service innovation.

This theoretical paper offers a conceptual framework for managing service innovation by proposing six dynamic service innovation capabilities. This framework builds on and is integrated with a model of service innovation that covers the possible dimensions where service innovation can take place. On this basis, avenues for future research into managing service innovation are identified and managerial implications discussed.

The six dynamic service innovation capabilities identified are: signalling user needs and technological options; conceptualising; (un‐)bundling; co‐producing and orchestrating; scaling and stretching; and learning and adapting. It is hypothesized that successful service innovators, which may include manufacturing firms developing into providers of service solutions, outperform their competitors in at least some of these capabilities.

The six dynamic service innovation capabilities identified in this theoretical paper, their mutual links as well as links with dimensions of service innovation need to be tested further. Further refinement is required in order to be able to discriminate between various industries, sizes and types of firms.

Those involved in managing service innovation are offered a framework for systematically assessing dynamic service innovation capabilities.

The main contribution of this paper is that it links a service (innovation) perspective to a DCV of the firm by proposing a set of six dynamic service innovation capabilities.