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Emphasizing a Service Phase Perspective for Machine Manufacturers Seeking
Digital Servitization - a Taxonomy for Industrial Service Phases
Alexander Kreyenborg
TU Dortmund University
Alexander.Kreyenborg@tu-dortmund.de
Daniel Hefft
TU Dortmund University
Daniel.Hefft@tu-dortmund.de
Jonas Eichholz
TU Dortmund University
Jonas.Eichholz@tu-dortmund.de
Can Azkan
Fraunhofer ISST
Can.Azkan@isst.fraunhofer.de
Abstract
The ongoing shift to solution-oriented business
models and growing digitalization lead to an
increasing importance of services in manufacturing
industry. Machine manufacturers in particular
struggle to grasp the extent of transformational impact
enabled or required by service developments. This is
due to a narrow perspective on specific service
characteristics, but not on the entire service process.
Therefore, a service-dominant perspective is essential
in the value creation of manufacturers, placing
relevant service phases in the foreground. However,
the process-related character of services is rarely
considered in the literature. For this purpose, this
study provides a taxonomy that classifies services
based on phases. In addition to a systematic literature
analysis, this study builds on practical insights by
conducting eight expert interviews. The applicability
and usefulness of the taxonomy is then demonstrated
through exemplary application based on a case study,
enabling practitioners to adopt a phase-oriented
perspective on digital servitization.
1. Introduction
For more than three decades, the transition to
service-oriented business models in the manufacturing
industry has been scientifically discussed under the
domain of servitization [1]. Several studies [2–4] have
found a link between manufacturers' economic success
and their shift to service-oriented value creation. This
transformation is closely linked to the digitalization of
both the service offerings as well as the entire
organization [5]. With data-driven services, such as
condition monitoring, predictive maintenance or
process optimization, the customer's installed base is
supplemented by numerous added value propositions.
These advanced services represent essential building
blocks for complex business models and industrial
product-service systems (IPSS), such as operator or
pay per x models [6]. The required changes in context
of so-called digital servitization [2] pose major
challenges for many manufacturers, leading to service
and digitalization paradoxes that can be observed [7].
The service paradox describes, that “it appears more
difficult for firms to make incremental profits by
adding services than might be expected” [8]. The
digital paradox also indicates, that the “investment to
procure and develop digital assets have rarely been
paid off yet” [7]. Overall, it can be stated that the
development of IPSS, reflecting stages of digital
servitization [6], is fraught with various pitfalls linked
to a lack of service perspective. Gebauer et al. [9]
identify numerous traps, including that manufacturers
focus too much on technical possibilities instead of
relationships or customer needs. However, the shift to
service-oriented business models leads to complex
IPSS, "blurring the borderline between product and
service" [10]. As a result, increasing process
orientation goes hand in hand with digital servitization
[5]. Nevertheless, a product-oriented view is still
widely common, especially in small and medium sized
manufacturers (SME) [11]. Although the competitive
importance of services is well known, investments in
service development are still given secondary priority
[12]. Consequently, the perspective on the service
process, which later significantly shapes customer
interaction and the providers activities, is still seen as
a secondary element in the servitization [13].
There is a lack of lightweight tools in the literature
that support manufacturers of digital services [6, 14],
systematizing the complex character of services in a
comprehensive manner. Not all service types are
accompanied by critical pitfalls as well as high
investments. Sousa and da Silveira [15] distinguish
Proceedings of the 55th Hawaii International Conference on System Sciences | 2022
Page 1268
URI: https://hdl.handle.net/10125/79488
978-0-9981331-5-7
(CC BY-NC-ND 4.0)
between basic Services (BAS) and advanced Services
(ADS). While BAS describe less complex and
conventional types of services (e.g., training or
commissioning), ADS represent more complex
services, which go hand in hand with a high level of
digitalization or process orientation (e.g., remote
diagnostics or result-oriented services). An important
contribution to digital servitization lies in existing
customer relationships via BAS as part of the use
phase of machines, which are successively expanded
by ADS (e.g., condition monitoring) [16]. Hence, this
study focuses on MRO-related services (maintenance,
repair, overhaul) of machine manufacturers, which are
extended by digital service elements [13, 17]. Thus,
the objective of this contribution is to systematize the
service perspective and poses the following research
question (RQ):
What are the key dimensions and characteristics
of MRO-related services in manufacturing industry in
light of digital servitization?
To answer the research question, a taxonomy for
industrial services of manufacturers is developed
following the well-established development approach
by Nickerson et al. [18]. The aim of the taxonomy is
to identify relevant dimensions and characteristics of
industrial services. The development is conducted
through the lens of the service-dominant logic (SDL),
that places the service aspect in the center of the
economic value creation [19]. Besides a systematic
literature review, the development approach includes
expert interviews with a total of eight manufacturers,
ensuring its usefulness and applicability. The article is
structured as follows: After the introduction, section 2
provides insight into the relevant theoretical
foundations. Section 3 discusses the research design in
detail and introduces the development of the
taxonomy. In section 4, the final dimensions and their
characteristics are described. Then, section 5
demonstrates an exemplary application of the
taxonomy based from insights of a case study of a
machine manufacturer. Finally, section 6 discusses the
conceptual contributions, practical implications and
limitations of this study.
2. Theoretical background
2.1. Service-phases in manufacturing industry
through the lens of Service Dominant Logic
Manufacturers are increasingly transforming to
service-based value creation and thus entering
process-oriented relationships with customers and
value creation partners as co-creators. In an industrial
context, the term service refers to intangible offerings
co-created by manufacturers or specialized service
providers and its customer. [20] Manufacturers are
therefore increasingly converging on the fundamental
premises of the SDL, which basically state that all
economic exchanges are based on services [19], that
are defined as “the application of specialized
competences through deeds, processes, and
performances for the benefit of another entity or the
entity itself” [21]. Supplementary, in the literature,
three constitutive dimensions have emerged,
interpreting services as a system [22]: performance
outcome, performance potential, and performance
process [13, 23]. Whereas the performance outcome
“ether increases the customer value related to a
material good, or the value contribution in a core
value creation process (or value stream) of the
customer” [24], the performance potential describes
maintaining the ability to perform the service [23].
Thus, a performance potential requires an availability
of operational resources, being in line with the SDL.
Following the SDL, the performance process thereby
takes place in a co-creation in which different entities
interact with each other, exchanging skills and
knowledge in form of services [19]. In context of this,
the SDL describes material goods as “distribution
mechanisms for service provision” and operational
resources as “the fundamental source of strategic
benefit” [19]. Considering these premises, it can be
stated that there is a lack of approaches in the
literature, which systematically describe the industrial
service creation of a manufacturer [13]. Galipoglu and
Wolter [25] explain this by pointing to the
"heterogeneity of the subject area and the associated
difficulty in making statements about the entire
spectrum of industry-related services, as well as the
different ways in which the supply of industry-related
services affects different factors".
However, the systematization of industrial
services is valuable, as it supports the design of service
activities or the identification of relevant resources
[25]. Preliminary work by Kallenberg [22], Gajewski
[26], Schuh et al. [13], Winkelmann and Luczak [27]
or Frank et al. [28] provide first approaches to this
systematization. Kallenberg focuses on the central
service functions in successive phases with the help of
a framework [22]. For this, a service process typical
for manufacturers is proposed, which serves as the
foundation for further service research [e.g. 27, 29,
30]. Gajewski [26] models after-sales services using a
reference process and proposes similar phases of
service provision. Schuh et al. [13] refer to this prior
work and cluster MRO services processes into three
groups in order to derive a digital twin for industrial
services. Frank et al. [28] develop a reference process
for smart service businesses, including an overarching
perspective from planning and development to
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performing and billing of services. Summarizing, a
structure by service phases in chronological order
simplifies the systematization of activities, which can
include: service inquiry, service clarification, plan
and control service, execute service, invoice service
[13, 22, 26]. In each of these phases, different
activities and characteristics shape the relationship
between stakeholders and their value creation.
2.2. Digital Servitization
Baines and Lightfoot describe servitization as
“the process of transforming manufacturers to
compete through services integrated with their
products” [20]. In this context, digitalization allows
“new ways of value creation” [7]. Therefore it is an
important enabler for advanced and service-oriented
value propositions of manufacturers, which describes
“the convergence of servitization and digitalization”
[7]. Thus, this convergence has been discussed in
detail for the last few years under the term digital
servitization [2, 5, 31]. Due to “inter-dependencies
between the immanent product and service shares and
the involved persons” [32], IPSS are closely related to
digital servitization, representing certain states of a
service-oriented transformation strategy. The
emergence of information and communication
technologies (ICT) enables “increased clientprovider
interaction and the ‘capture’ of customer needs” [5].
However, Coreynen et al. note that there is an
insufficient knowledge base on the extent to which
manufacturers can leverage the potential of digital
servitization [5]. Manufacturers have to consider both
the front-end digitalization visible to the customer and
the back-end perspective, e.g. operant digital resources
[33]. The back-end digitalization required for
advanced services and the capabilities and resources
linked to service processes, often receive little
attention in the early stage of service innovation [34].
This is critical, because according to the SDL, these
operational resources are the “fundamental source of
strategic benefit” [19] and thus of every service-
related action.
2.3. Taxonomies of services in manufacturing
industry
For the analysis of complex phenomena,
taxonomies offer a possibility of systematization [18].
Similar approaches such as classifications or
typologies are often used synonymously with
taxonomies [18]. Wemmerlöv states that "all activities
inside an organisation are classifiable" [35]. Building
on this statement, we utilize a taxonomy systematizing
the service process of manufacturers. According to
Schuh et al., "existing literature does not focus on the
phase of service performance" [13], i.e. the service-
related activities of manufacturers. The authors of this
study agree on this conclusion, despite some
preliminary work using phase-based reference models
(see section 2.1.). Nevertheless, there are some
taxonomies emerging from the Information Systems
research domain providing a first orientation.
Williams et al. develop a digital service design
taxonomy classifying services with regard to the
business model, the degree of interaction, and the
technology [36]. Rühmann classifies services using a
typology and derives different design variants based
on characteristics [37]. Paukstadt et al. focus on a
smart service taxonomy, which emphasizes the service
concept, execution, and monetization [38]. The
taxonomy for data-driven services by Azkan et al.
adopts a similar perspective and broadens the lens in
terms of analytic characteristics and integration of
platforms from the business model perspective [39].
Passlick et al. focus on internet of things enabled
predictive maintenance services. The classification is
based on business models, which includes value
promise, payment model or customers [40]. Hunke et
al. also address the potential of digitalization and
develop a taxonomy to systematize the usage of data-
and analytic-based services [41]. Mittag et al. propose
an approach based on ten building blocks, e.g. product
monitoring or provide information [42] to support the
planning of product-related services. Koldewey et al.
provide a framework that draws on 20 functionality
patterns for smart services [43]. This selection of
studies shows that existing taxonomies focus on
systematizing specific service types (e.g.,
characteristics of a data-driven service) as a
classifiable object in a performance outcome
perspective (see section 2.1.). There is a lack of
approaches that systematize the performance process
itself. Nevertheless, this perspective is necessary
because a service-centric view is inherently
relationship-oriented [19]. Thus, the characteristics of
the service process must be considered.
3. Research design and development
3.1 Methodology
As a form of classification, taxonomies provide a
basis for future research by systematizing complex
phenomena [44]. For developing and evaluating the
taxonomy, this contribution draws on the design
science research (DSR) methodology [45], as it aims
to overcome current limitations of explaining real-
world phenomena by building and evaluating socio-
technical artifacts [46]. Thus, the build-evaluate
Page 1270
pattern by Sonnenberg and Vom Brocke is adapted
[47], structuring the following process in two phases.
Regarding an adequate methodology for building
the taxonomy, this study adapts the well-established
approach of Nickerson et al. [18]. The main goal of
this contribution’s taxonomy is to classify
manufacturers' industrial service processes based on
the degree of digital servitization. Thereby, building
the taxonomy is conducted through the lens of SDL,
considering the interest of practitioners to map
relevant aspects of digitalization, as well as the
interaction with customers and partners as co-creators.
In line with Nickerson et al. [18], we followed an
iterative methodology, combining a conceptual-to-
empirical and an empirical-to-conceptual approach.
For the conceptual path we conducted a systematic
literature analysis according to Vom Brocke et al. [48]
to identify existing work and relevant dimensions as
well as characteristics. Within the empirical path,
semi-structured interviews were conducted with
experts from eight manufacturers of different sizes and
branches (see Table 2), following guidelines by Myers
and Newman [49]. Sonnenberg and Vom Brocke
propose two evaluation activities within a DSR
process: ex post evaluation and ex ante evaluation
[47]. The interviews are part of the ex ante evaluation,
as they were conducted during the design process by
empirical identifying relevant dimensions and
characteristics. The ex post evaluation is based on an
exemplary application of the taxonomy, presented
through insights of a case study [50].
3.2 Taxonomy development
To develop the taxonomy, several iterations are
performed until so-called objective and subjective end
conditions are fulfilled [18]. The first iteration is
specifying the overarching goal by the definition of
meta-dimensions (MD). Since the goal of the
taxonomy is to map the service process of
manufacturers, this study follows Kallenberg's
reference model as conceptual-to-empirical approach
[22]. This reference model is adopted as preliminary
work in further publications proving its applicability
[e.g. 27, 29, 30] and has also been utilized by the
authors in previous workshops with industry partners
in a research project, that confirmed the usefulness. To
enhance conciseness, we modified the proposed
service phases resulting in five meta-dimensions: 1)
service initiation, 2) inquiry and service clarification,
3) service planning & control, 4) service execution, 5)
service invoicing. The second iteration is also based
on a conceptual-to-empirical approach. In order to
identify relevant dimensions for the five MD and
existing preliminary work, a systematic literature
analysis was conducted, guided by Vom Brocke et al.
[48]. The databases Scopus, Sciencedirect and AISel
were utilized to identify existing classification
approaches for industrial service processes. Thus, we
developed following search term, which entails related
concepts and synonyms through concept-mapping in
context of our research scope [48]: ("taxonom*" OR
"morphol*" OR "classification") AND ("process*" OR
"phase*") AND "manufact*" AND "service*". The
search focused on publications from the last 10 years
(2010 - 2021) and was limited to title, abstract and
keywords, leading to 616 results (see Table 1). Based
on title, abstract and keywords we evaluated the results
and filtered duplications, resulting in 32 publications.
Table 1. Literature analysis within 2nd iteration
Database
Total Results
Relevant
(w/o duplicates)
Scopus
494
27
AISel
10
1
ScienceDirect
112
4
Forward & Backward search
12
Total relevant articles
44
Further, a forward and backward analysis to add
highly cited preliminary work results in 12 additional
articles. The systematic literature analysis leads to a
total number of 44 relevant articles. The third
iteration follows the empirical-conceptual approach
to improve the usefulness and applicability of the
taxonomy. Systematic interviews were conducted with
experts from German manufacturers (see Table 2).
Table 2. Overview of the interviewed experts
Manufacturer
Size
Interviewed Expert(s)
1
Special machinery
manufacturing
Med.
Managing Director
2
Equipment for heat
treatment
Small
Technical manager
3
Intralogistics and
conveyor systems
Large
Director Digital
Transformation
4
Brakes, clutches and
system solutions
Med.
Chief Technical Officer,
Head of marketing
5
Pumps and pump
systems
Large
Head of service solution
management
6
Plant systems for oil
and chemical industry
Small
Managing Director
7
Tools and lasers for
manufacturing
Large
Service Specialist
8
Filling and packaging
systems
Large
Director Technical
Support Service
Based on specific practical or experimental
knowledge, experts are able to structure and interpret
a concrete field of action in a meaningful way [51].
Since the taxonomies purpose is to address
manufacturers to classify their industrial service
process, expert interviews are valuable for empirical
Page 1271
development. We selected the companies based on
size and prior analysis regarding the current service
portfolio (offering of basic and advanced services) to
achieve a heterogeneous coverage within the empirical
development path of the taxonomy. The classification
of companies into the sizes Small, Medium and Large
is based on the EU definition regarding the number of
employees (Small: <50, Medium: <250, Large:
>=250) [52]. The interviews were conducted in May
and June 2021 over video conferencing systems. The
length of each interview ranged from 1 to 1.5 hours.
The first author guided the interviews, while a co-
author conducted a simultaneous protocol [53],
allowing a direct interpretation of the statements [51].
In addition, all interviews were recorded. Initially,
general information were obtained during the
interviews, e.g., the expert's position within the
manufacturing company. In order to enable the experts
to evaluate and expand individual dimensions and
characteristics, the taxonomy was presented
afterwards. After conducting four interviews, the
taxonomy was modified based on the experts feedback
by readjusting few dimensions and combining several
characteristics. Within a fourth iteration, a second set
of four interviews was conducted and no further
adjustments were required to the taxonomy. The
experts confirmed the applicability and usefulness
(subjective criteria according to Nickerson et al. [18]).
In addition, all objective criteria [18] were fulfilled,
meaning that no further iteration was necessary.
4. Taxonomy for industrial service phases
This chapter describes the final taxonomy in
detail (see Table 3). Thereby, it answers the
formulated RQ, which dimensions and characteristics
are required for the classification of service processes
in manufacturing industry. The taxonomy consists of
five meta-dimensions (MD) and a total of 14
dimensions. In addition to each dimension, the right
column shows whether a characteristic is exclusive (E)
or non-exclusive (N). In total, the taxonomy has 49
characteristics, capable of individually describing a
manufacturer's service process.
MD 1 - Service initiation: The first MD
describes the service initiation and consists of the two
dimensions Event and Initiator. The triggering Event
can be based on conventional activities, such as
Manual identification of demand by the customer,
Periodic execution, e.g., via maintenance contracts or
periodic updates, or via the equipment itself through
Automatic service notifications [42, 44]. More
complex events are continuous Analyses of historical
order data to forecast possible demand [39]. Drawing
on this, Usage-, process- or condition-based data can
be analyzed, e.g., to identify a need for service via
condition monitoring systems. Manufacturers with
extensive knowledge of specific wear characteristics
leverage this information for Predictive analysis,
scheduling maintenance services based on predicted
wear conditions of the manufacturing system [40].
Related to the first dimension, the Initiator dimension
depends on the degree of digitalization and
connectivity of the co-creators. Thus, the
characteristics are Customer, Provider, or the machine
System itself. Thus, the machinery is not merely an
operand resource, but rather, using ICT, becoming
increasingly an operant resource [44].
MD 2 - Inquiry and service clarification: The
second MD describes inquiry capture and service
clarification consisting of four dimensions: Customer
interface, Internal system support, Information
availability, and Requirement formulation. Typically,
the Customer interface is based on personal contact
via Face-to-face, phone or e-mail [54]. Web-based
digital formats such as web forms or an app can also
be used as a manual communication channel, as well
as a Real time chat function. More complex solutions
can be offered via Digital interfaces (e.g., API,
connected ERP system) [42]. Some manufacturers
have also been offering Platform solutions allowing
customers to make inquiries or configure products via
self-service portals [39]. The dimension Internal
system support describes the type of digital processing
by the provider [42]. Typically, smaller manufacturers
do not have a standardized system, but work with
Paper based and/or digital documents (e.g., Word,
Excel). More support is provided by Database-driven
systems, such as customer relationship management
systems, which are supplemented by other software.
The experts consider an Integrated service
management system as an ideal and transparent
solution, combining all systems and thus eliminating
media discontinuities. The highest level of integration
uses an additional Ticket system tracking service-
relevant activities and customer contacts. The
Information availability dimension describes data
accessibility during service clarification [55] and is
based on three characteristics: Master data and service
history, Knowledge database, and Real-time
process/condition data. In addition to the basic
information of the first characteristic, providers using
a Knowledge database can identify problem-solving
patterns, which assist in improving the service
clarification process. Furthermore, access to Real-time
process/condition data from the customer's system
supports fault identification. The dimension
Requirement formulation is a crucial influencing
factor for targeted service processing.
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Table 3. Taxonomy of industrial service phases
Unstructured inquiries might lead to a time intensive
clarification process due to several subsequent queries
[56]. Customers should be assisted in formulating
requirements by Checklists or instructions.
MD 3 - Service planning and control: The third MD
describes the planning and control phase, including
two dimensions: System integration, and External
communication. Independently of the second MD,
manufacturers operate with different systems in the
planning and controlling phase. Therefore, the first
dimension System integration consists of three
characteristics: Paper-based and office tools,
Database-driven Systems and Advanced Database-
driven Systems. Small companies with few employees
often plan and control their operations Paper-based or
with standard office tools, e.g., Excel. For more
complex structures, a Database-driven system is
utilized to avoid non-transparent processes [55].
Advanced database-driven Systems enable employees
to manage capacity planning more efficiently through
support functions, e.g., by automatically considering
the responsibility or even the capabilities of the service
personnel [22]. The standard for External
communication with co-creators is the personal
contact via Face-to-face, phone or e-mail. In the case
of suppliers, logistics service providers or other long-
term customer or partner relationships, a Connected
Database-driven software (e.g., a connected ERP)
accelerates the communication and value co-creation
process [54]. Another option is offered by Platforms
or apps for exchanging order data and coordinating
(e.g., delivery) schedules.
MD 4 - Service execution: Under Service execution,
the main service activities visible to the customer on
site are provided. Thus, the dimension Executing on
site is differentiated from the responsibility of services
which are performed on the customer's machine [57].
The provider's Own employees perform the service
itself, and/or a Service partner collaborates with the
provider. In addition, customers or other co-creators
may be enabled to conduct services themselves via
Remote instructions from the provider. The Human
machine interface (HMI), providing service personnel
with digital information, is another service-relevant
factor. While conventional services operate with No
digital tools, machines equipped with
microelectronics enable information via Local display
devices. A more advanced stage is represented by
Mobile devices, enabling additional support functions,
such remote access to ERP database or condition data
of the manufacturing system [58]. In addition,
Augmented or virtual reality functions (e.g., data
glasses) provide extensive information. As the service
provision is often linked to narrow deadlines and high
requirements, Process transparency and the ability to
provide information regarding the current processing
status are essential. Here, Manual status information
can be mentioned first. Customers might request the
processing status by phone, which may lead to higher
costs due to unsystematic processes in the
organization. Based on a Structured service process,
the provider tracks status information efficiently and
communicates the status via phone or e-mail. The third
characteristic describes an automated Track & trace
system enabling the customer to query the processing
status independently [42]. Following the service
execution, Documentation is an important part of the
provider-customer (and co-creators) relationship, also
forming the basis for invoicing. Basically, Paper-
based or supported by local software (e.g., office
tools, scans, etc.) documentation is commonly used.
Increased efficiency is achieved through Mobile
documentation (e.g., via tablet), which is then directly
created on-site by service personnel. The documents
are either processed later in-house or transmitted via
mobile internet. A Full digital documentation in line
Meta-
Dimensions
Dimensions
Characteristics
E/N
Service
initiation
Event
Manual identification
Periodic execution
Automatic service
notifications
Analyses of historical
order data
Usage-, process- or
condition-based data
Predictive analysis
N
Initiator
Customer
Provider
System
N
Inquiry and
service
clarification
Customer interface
Face-to-face, phone or e-mail
Web-based digital formats
Real time chat
Digital interfaces
Platform solutions
N
Internal system
support
Paper based and/or digital documents
Database-driven systems
Integrated service management system
+ Ticket system
E
Information
availability
Master data and service history
Knowledge database
Real-time process/condition data
N
Requirement
formulation
Unstructured inquiries
Checklists or instructions
E
Service
planning and
control
System integration
Paper-based and office tools
Database-driven software
Advanced Database-driven systems
E
External
communication
Face-to-face, phone or e-mail
Connected Database-driven software
Platforms or apps
E
Service
execution
Executing on site
Own employees
+ Service partner
+ Remote instructions (partners or customers)
E
Human machine
interface
No digital tools
Local display devices
+ Mobile devices
+ Augmented or virtual reality
E
Process
transparency
Manual status information
Structured service process
Track & trace system
E
Documentation
Paper-based or supported by local software
+ Mobile digital documentation
Full digital documentation
E
Service
invoicing
Billing
Paper based or digital documents
Database-driven software
Autonomous systems
E
Payment model
Product price or separate payments
Regular payments
Pay per x
Subscription models
N
Page 1273
with a centralized database enables consistent and
transparent management of relevant information and
eliminates media discontinuities.
MD 5 - Service invoicing: In the context of the
dimension Service invoicing, the performed activities
are processed and charged to the customer. For this
purpose, in the dimension Billing, manufacturers use
Paper-based or digital documents applying
conventional office tools. Database-driven software
enables the invoicing process to be more efficient. In
the context of increasing network-based value creation
and Autonomous systems, automated processing via
smart contracts is also becoming increasingly
interesting and therefore represents the final
characteristic. The dimension Payment model varies
depending on the manufacturer's service portfolio and
customer's needs [40]. Services within the Product
price or separate payments are billed via individual
invoices. In the case of maintenance contracts or
software licenses, Regular payments are made. More
complex solutions represent pay per x models, in
which payments are made per product produced or
based on availability. Subscription models represent
the configuration of specific functions, which
customers add or cancel within their contract, resulting
into regular time-based payments [38].
5. Exemplary taxonomy application
The majority of taxonomies draw on case studies
for building or demonstrating their applicability [59].
Thus, this section classifies empirical objects to
illustrate the relevance and usefulness of the final
taxonomy [18], based on insights of a case study
conducted between September 2020 and May 2021.
The case study is based on a manufacturer,
representing many companies facing digital
servitization. Besides the close collaboration in a
research project, we carried out several workshops
with the service manager and service technicians. As
allowing an in-depth view on complex phenomena
[50], the conducted case study gave detailed insights
into the service process and the manufacturers
business model. These insights allow systematizing
the current and targeted service process of the focused
manufacturer within the final taxonomy. The selected
machine manufacturer offers mobile equipment, that
is used by customers in context of welding for
subsequent heat treatment. As an SME, the
manufacturer is currently retrofitting its equipment
with edge-devices to achieve connectivity. Initially
this is to improve the efficiency of conventional MRO
services. In the future, advanced services based on
remote access are planned, enabled by the
transmission of status or usage data. The taxonomy in
Table 3 visualizes the current service process by a
dashed line. The targeted service process, enabled by
the retrofitting approach, is represented by a dotted
line. The motivation of the manufacturer lies in
infrequently occurring failures of the mobile
equipment, but depending on the location, these
failures could lead to high consequential costs for the
customer. Additionally, the conventional interaction
via phone and e-mail as well as the frequent need for
on-site services to identify faults are disrupting the
flow of information and complicating the service
process in general. The mobile machines are equipped
with microelectronics, which is sufficient to estimate
the next maintenance operation for certain
components based on process data. This data can be
transmitted via edge-device as new digital interface to
the manufacturer. As a service provider, the
manufacturer is able to initiate a maintenance service
or to deliver spare parts at an early stage. For this
purpose, new software must be integrated in the
inquiry and service clarification phase, which makes
the status and process information available to the
service staffs. As the enhancement of the
communication to the customer is linked to further
investments and the added value of the new databased
approaches is to be tested first, external
communication will initially remain conventional.
However, the manufacturer can proactively contact the
customer and is sufficiently informed regarding the
condition of the machine due to the machine data,
improving the service clarification. During the service
execution phase, the manufacturer considers mobile
devices as useful since relevant data is available on
site. Thus, existing devices, which are used for
documentation, must be supplemented with this
functionality. Currently, services are either included in
the warranty or billed separately. After successful
implementation, in the future the manufacturer plans a
usage-based payment as pay per x model, enabled by
leveraging machine data via permanent data interface.
In summary, the presented taxonomy allows the
classification of service processes. As a result, it
encourages early service development (e.g.,
digitalization, use of new technology) while focusing
on the entire service process.
6. Discussion, Implications and Further
Research
As the value creation of manufacturers shifts to
relationship-based, long-term customer interactions,
product-oriented business models are losing their
dominance. Thus, services and a strong process-
oriented organization have become increasingly
crucial. While literature consents to the importance of
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digital servitization, there is a lack of lightweight
approaches to service development addressing the
phase-oriented nature of services [13]. This study
addresses this research gap by presenting a taxonomy
based on a structured conceptual and empirical
development process. The involvement of industry
through interviews, as well as the demonstration of
applicability, underline the methodological soundness
and relevance of the study results. As managerial
implications, the taxonomy presented in this study
provides an applicable tool for classifying services
based on relevant service phases. This approach
supports practitioners to identify those service-related
aspects affected by the integration of digital
technologies. The discussions with the experts during
the interviews show that the taxonomy leads to an
active reflection of the existing service process. Thus,
the practical application of the taxonomy directs
attention to necessary adjustments along the service
process at an early stage. Using this knowledge,
appropriate actions or a roadmap for service
development can be derived. In addition, practitioners
should examine why and to what extend the Customer
interface differs in their characteristics to External
communication, i.e., with all partners, co-creators, and
thus customers. Since these dimensions address
different phases of the service process, a separate
consideration is valuable. However, it is noticeable
that the characteristics at the Customer interface
within the Inquiry and service clarification phase offer
different options than those in External
communication within the phase of Service planning
and control. A reason for this might be different
isolated solutions of the co-creators in a value
network, preventing a standardized communication
culture. In the long term, synergy effects could be
leveraged if appropriate standards were utilized.
Regarding conceptual implications, the taxonomy
represents a substantiated result of a conceptual and
empirical development approach. The study lays a
basis for further research to systematize and
understand the nature of services and process
orientation in context of digital servitization.
Researchers will be able to distinguish manufacturers
based on their various approaches to performing
services in the future and highlight any differences in
order to derive success factors. This study is subject to
limitations. The resulting taxonomy reflects only a
temporal snapshot of reality. Especially due to
dynamics in information and communication
technologies, regular updating of the dimensions and
characteristics is necessary. The adopted research
methodology in this study is based on both literature
analysis and empirical research. Nevertheless, a
comprehensive representation of all possible
instantiations of service processes cannot be fully
guaranteed. As a result, depending on the use case,
further adjustments may be required. Lastly, a
taxonomy is always influenced by the scientists that
conducted the development process. Other
researchers, using the same methods but with different
scientific background and interests, might associate
some dimensions and characteristics differently and
thus influence the result of the taxonomy. A potential
avenue for further research is the derivation of
archetypes, enriched with further information of the
companies, which were captured during the
interviews. Furthermore, the practitioners stressed the
interest regarding results of the other manufacturers
analyzed and what resources and transformation
strategies they implement. Thus, the analysis of
successful transformations, enabling factors in digital
servitization and its systematization might be a
promising opportunity for further research. Due to the
focus on the service process itself and for the sake of
compactness [18], the final taxonomy excludes other
relevant aspects that do not directly address the
constitutive service dimension of performance
process. In this context, the influences of both internal
and external factors should be examined in more
detail. As discussed in chapter 2.1, the necessary
performance potential must be available to execute the
service processes. Therefore, these organizational
resources must be aligned with the service processes
in line with digital servitization [60]. While a
manufacturer can continue to digitalize internally,
some dimensions of the taxonomy depend heavily on
customers or partners (co-creators). This impacts the
offering of digital services, e.g., if the customers do
not grasp the added value of pay per x payment models
or a supplier declines database-driven approaches as
external communication interface. Thus, these
dependencies regarding the performance potential that
significantly influence the performance process and
the combination with this study’s taxonomy represent
a potential avenue for further research.
7. Acknowledgment
This research is funded by the German Federal
Ministry of Education and Research (BMBF, funding
code: 02K18D130) and implemented by the Project
Management Agency Karlsruhe (PTKA).
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