Mechanisms for developing operational capabilities in digital servitization

Abstract

PurposeDigital servitization concerns how manufacturers utilize digital technologies to enhance their provision of services. Although digital servitization requires that manufacturers possess new capabilities, in contrast to strategic (or dynamic) capabilities, little is known about how they develop the required operational capabilities. The paper investigates the mechanisms for developing operational capabilities in digital servitization.Design/methodology/approachThis paper presents an exploratory study based on 15 large manufacturers operating in Europe engaged in digital servitization.FindingsThree operational capability development mechanisms are set out that manufacturers use to facilitate digital servitization: learning (developing capabilities in-house), building (bringing the requisite capabilities into the manufacturer), and acquiring (utilizing the capabilities of other actors). These mechanisms emphasize exploitation and exploration efforts within manufacturers and in collaborations with upstream and downstream partners. The findings demonstrate the need to combine these mechanisms for digital servitization according to combinations that match each manufacturer’s traditional servitization phase: (1) initial phase - building and acquiring, (2) middle phase - learning, building and acquiring, and (3) advanced phase - learning and building.Originality/valueThis study reveals three operational capability development mechanisms, highlighting the parallel use of these mechanisms for digital servitization. It provides a holistic understanding of operational capability development mechanisms used by manufacturers by combining three theoretical perspectives (organizational learning, absorptive capacity, and network perspectives). The paper demonstrates that digital servitization requires the significant application of building and acquiring mechanisms to develop the requisite operational capabilities.

Manufacturers managing complexity during the digital servitization journey

“…In manufacturing, complexity absorption can mean developing extensive data-related capabilities for DS (Ardolino et al. , 2018; Momeni et al. , 2023).…”

“…This approach involves various goals, a decentralized structure and increased interactions for decision-making (Ashmos et al, 2000). In manufacturing, complexity absorption can mean developing extensive data-related capabilities for DS (Ardolino et al, 2018;Momeni et al, 2023).…”

Synthesizing three decades of digital servitization: a systematic literature review and conceptual framework proposal

“…The types of services commonly offered were analyzed, categorized as basic, intermediate, or advanced, along with the specific servitization strategies adopted by the companies. Furthermore, the study delved into the organizational and technological capabilities required for an effective transition to servitization (Momeni et al 2023), as well as the potential risks and challenges arising in these transition processes, including both internal and external obstacles that must be overcome to fully capitalize on the potential benefits of servitization (Raddats et al 2017;Reim et al 2019;Minaya et al 2023).…”

The moderating role of technological collaboration in the relationship between absorptive capacity and servitization: an open innovation approach in high-tech industries

“…Absorption and diffusion in periods of major technological uncertainty essentially depend on the ability of firms to understand and apply novel technologies from the market, which they can access through a range of partnerships. For example, to facilitate digital servitization, manufacturers implement scans and collaborative procurement mechanisms by obtaining expertise and resources from proprietary data specialists, collaborating with other product providers and accessing independent data knowledge and experience (Momeni et al ., 2023).…”

“…Accordingly, it has been argued that collaboration with suppliers can help firms develop learning capabilities and new routines that support the introduction of productservice offerings. An operational capability acquisition mechanism requires a manufacturer to utilize the capabilities of other actors, particularly in the upstream value chain (Momeni et al, 2023). Therefore, the following hypothesis is proposed:…”