This study examines how original equipment manufacturers (OEMs) can segment their product-oriented services customers with the help of a recency, frequency, and monetary value (RFM) analysis of service consumption. The study is an interventionist case study that uses two large OEMs as case companies, both seeking profitable growth in the area of services. The originality of the paper is threefold. First, the research extends the RFM analysis using four product-support-service-specific variables, and it outlines the similarities and differences between the industrial service and consumer business contexts when using the RFM analysis. Second, by applying and modifying the RFM model to better suit the product-support-service context, the study contributes to the literature on the governance of product-oriented services in manufacturing. Third, the paper contributes to the literature on management accounting supporting service business development, by introducing a method that can use installed base and customer information to measure, analyze and govern the business potential of an industrial machinery "fleet". In all, the paper is particularly helpful for service management and accounting academics and practitioners who wish to understand product-oriented service governance in environments in which there is a vast installed base of products at the customers, with remarkable potential for extending service business.
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.
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.
This paper shows how service development for a machinery fleet can be supported by financial analyses. In particular,the paper shows how service managers’ work can be supported by accounting information. The paper draws upon aninterventionist case study at a machinery manufacturer in Finland. The paper contributes to the literature on pragmaticconstructivism by extending its usability into new groups of managerial actors in the timely context of servicedevelopment for machinery fleets. Moreover, the paper contributes to the servitization literature, by showing ways toidentify technical and behavioural possibilities and to overcome related difficulties in manufacturing companies’transition to service business.
Electronic marketing is becoming an integral part of the sales process in business-to-business (B2B) markets. In line with that, sales configurators are emerging as novel applications that help companies engage customer and drive sales. This research investigates the feature related benefits of sales configurator. Our goal is to categorize the benefits and to identify the important ones. In order to reach the goal, personal interviews were conducted and data was gathered through an online questionnaire. Responses from 152 business-to-business customers were analyzed and a factorial model of the feature related benefits of sales configurators was developed. The results show a model with five factors: versatility, configurability, user experience, security, and customizability. Of these, user experience and security were found to be the most important. In light of the this, we suggest that companies emphasize the aspects of user experience in addition to core functionalities when developing sales force automation systems.
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