Digital Servitization: How Manufacturing Firms Can Enhance Resource Integration and Drive Ecosystem Transformation

The integration of data-enabled services into an ever-increasing number of life aspects exemplifies how digital transformation and servitization are closely intertwined. For manufacturing firms, such digital servitization gives rise to new opportunities for long-term competitive advantage. However, it also poses new challenges and entails tradeoffs among strategic options. In addition, digital servitization changes not only intra-firm processes and customer relationships but also overall ecosystem dynamics. Against this backdrop, this chapter sheds light on the concept of digital servitization by discussing its key characteristics—and how it differs from “conventional” servitization—as well as the major opportunities and challenges for manufacturers. Drawing on an extensive study of a market-leading systems integrator, this chapter discusses the resource integration patterns that connect ecosystem stakeholders and the dual role of technology in increasing pattern complexity and facilitating the coordination of that complexity. To take full advantage of digitalization and go beyond the purely technological benefits, firms need to foster service-centricity and execute strategic change initiatives that are geared toward the internal organization, as well as the wider ecosystem. Furthermore, this chapter examines three strategic organizational shifts that underpin digital servitization: (1) from planning to discovery, (2) from scarcity to abundance, and (3) from hierarchy to partnership. Organizational identity, dematerialization, and collaboration all play key roles in this transformation.