Exploring the Potential of Smart Service Systems: A Multi-Actor View on Affordances and Their Actualization

Abstract

Smart physical products increasingly shape a connected world and serve as boundary objects for the formation of ‘smart service systems’. While these systems bear the potential to co-create value between partners in various industries, IS research still struggles to fully capture the phenomenon to support successful digital innovation in IoT settings. In our work, we analyze the phenomenon of smart service systems taking an affordance-actualization perspective. Based on a qualitative content analysis of a multi-case study, we identify elements and propositions to build mid-range theoretical knowledge for smart service systems. These conceptual findings are further illustrated with a real-world case study. We suggest that providers and users of smart products not only realize their own affordances via their actions but can affect the immediate concrete outcomes of partners. The developed theoretical framework and six distinct propositions should build the theoretical base for further research into the phenomenon in related disciplines.

Full text

This may be the author’s version of a work that was submitted/accepted
for publication in the following source:
Daniel Heinz, Carina Benz, Jan Bode, Fabian Hunke, Gerhard Satzger (2022)
Exploring the Potential of Smart Service Systems: A Multi-Actor View on
Affordances and Their Actualization
Journal of Service Management Research, volume 6, 2/2022, pp. 132-146.
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DOI: https://doi.org/10.5771/2511-8676-2022-2-132

1
Exploring the Potential of Smart Service Systems: A Multi-Actor View on Affordances
and Their Actualization
By Daniel Heinz*, Carina Benz, Jan Bode, Fabian Hunke and Gerhard Satzger
Acknowledgements: This work has been supported by the German Federal Ministry of
Education and Research through the research project “bi.smart” (grant no. 02J19B041).
Daniel Heinz is a researcher at
the Institute of Information
Systems and Marketing
(IISM) / Karlsruhe Service
Research Institute (KSRI) at
the Karlsruhe Institute of
Technology (KIT),
Kaiserstraße 12, 76131
Karlsruhe, Germany
E-Mail: daniel.heinz@kit.edu
* Corresponding author.
Carina Benz is a researcher at
the Institute of Information
Systems and Marketing
(IISM) / Karlsruhe Service
Research Institute (KSRI) at
the Karlsruhe Institute of
Technology (KIT),
Kaiserstraße 12, 76131
Karlsruhe, Germany
E-Mail: carina.benz@kit.edu
Jan Bode is a student
researcher at the Institute of
Information Systems and
Marketing (IISM) / Karlsruhe
Service Research Institute
(KSRI) at the Karlsruhe
Institute of Technology (KIT),
Kaiserstraße 12, 76131
Karlsruhe, Germany
E-Mail: jan.bode9@kit.edu
Fabian Hunke is a researcher
at the Institute of Information
Systems and Marketing
(IISM) / Karlsruhe Service
Research Institute (KSRI) at
the Karlsruhe Institute of
Technology (KIT),
Kaiserstraße 12, 76131
Karlsruhe, Germany
E-Mail: fabian.hunke@kit.edu
Gerhard Satzger is a Director
of the Institute of Information
Systems and Marketing
(IISM) / Karlsruhe Service
Research Institute (KSRI) at
the Karlsruhe Institute of
Technology (KIT),
Kaiserstraße 12, 76131
Karlsruhe, Germany
E-Mail:
gerhard.satzger@kit.edu

1
Exploring the Potential of Smart Service Systems: A Multi-Actor View on Affordances
and Their Actualization
Abstract
Smart physical products increasingly shape a connected world and serve as boundary objects
for the formation of ‘smart service systems. While these systems bear the potential to co-create
value between partners in various industries, IS research still struggles to fully capture the
phenomenon to support successful digital innovation in IoT settings.
In our work, we analyze the phenomenon of smart service systems taking an affordance-
actualization perspective. Based on a qualitative content analysis of a multi-case study, we
identify elements and propositions to build mid-range theoretical knowledge for smart service
systems. These conceptual findings are further illustrated with a real-world case study. We
suggest that providers and users of smart products not only realize their own affordances via
their actions but can affect the immediate concrete outcomes of partners. The developed
theoretical framework and six distinct propositions should build the theoretical base for further
research into the phenomenon in related disciplines.
Keywords:
smart service systems, Internet-of-Things, affordances, actualization processes, digital
innovation, case study research.

1
1 Introduction
As everyday physical objects surrounding us become increasingly data-driven, connected, and
communicative (i.e., ‘smart’) (Porter and Heppelmann 2014; Wünderlich et al. 2015), it
becomes more and more evident how technological advancements in the context of the
‘Internet-of-Things’ (IoT) might have a transformational impact on our work, our daily lives,
and our participation in society (Allmendinger and Lombreglia 2005; Porter and Heppelmann
2014). An example of the impact of increasingly smart products is the rapidly ongoing
transformation of manufacturing industries (‘Industry 4.0’) (Hermann et al. 2016): Digital
technologies allow the integration of processes across the value chain and enable to servitize
previously product-focused business models . These novel offerings blend the physical and
virtual world by analyzing data collected via sensor-equipped connected physical objects and
create value-in-use through contextual and preemptive services (Peters et al. 2016; Wünderlich
et al. 2015).
As it is crucial to understand both social and technological influence factors on this
phenomenon, Information Systems (IS) research as an interdisciplinary field is predestined to
unify the primarily technically focused research in computer science and engineering
disciplines with the rather benefit- and value-oriented studies in fields of economics
(Beverungen, Breidbach, et al. 2019). Thus, Beverungen et al. (2019) pinpoint how digital
technologies manifested in smart products are transforming service systems into smart service
systems. They provide a widely recognized conceptualization of this new phenomenon and
have already sparked a vivid discussion among scholars (e.g., Anke et al. 2020; Beverungen et
al. 2020; Huber et al. 2019; Martin et al. 2019). In our study, we follow their understanding of
smart service systems, where “smart products take the role of boundary objects that digitally
mediate the interactions of service providers and service consumers and enable the co-creation
of individualized value propositions” (Beverungen, Müller, et al. 2019, p. 8).
Despite the concept’s rising popularity in practice and related disciplines, smart service systems
yet lack a thorough theoretical grounding and linkage to common constructs and concepts. By
emphasizing a systems perspective (cf. general systems theory (Garrity 2001; Maglio et al.
2009)) or by examining the dual nature of smart products either managing or increasing the
system’s complexity, IS research has great potential to enhance our scientific understanding of
smart service systems (Beverungen, Breidbach, et al. 2019; Beverungen et al. 2020; Martin et
al. 2021). In particular, investigations into the dynamics and mechanisms underlying smart
service systems allow building mid-range theoretical knowledge explaining how and why the
advent of ‘smartness’ challenges existing assumptions (Gregor 2006; Hassan and Lowry 2015).
Studying the impact of smart technologies on service systems is also relevant as it potentially
provides implications on the digitalization of innovation processes and outcomes, thus
contributing to the study of digital innovation management. As one of four new theorizing
logics for this endeavor, Nambisan et al. (2017) suggest technology affordances (and
constraints) (Gibson 1977; Leonardi 2011; Majchrzak and Markus 2012; Markus and Silver
2008) as a promising lens to build new theory–as the use of digital technology offers new sets
of affordances for innovating actors. Consequently, we ask: How do smart products give rise
to affordances for actors in smart service systems, and how can this potential be realized?
As we outline in this article, the theory of affordances provides means to better grasp and
operationalize the complex reciprocal relationship between technology and organizational
actors in smart service systems from a critical realist perspective (Volkoff and Strong 2013). In
particular, we apply Strong et al. (2014)’s affordance-actualization lens to revisit the concept of
smart service systems and to extend existing theoretical knowledge. We build on insights from

2
a multi-case study and claim that the purposeful design or ‘engineering’ of smart service gives
rise to affordances. In simple terms, an affordance is a ‘potential for goal-oriented behavior in
interaction with an artifact’ (Markus and Silver 2008; Strong et al. 2014; Zammuto et al. 2007)
whereby in this context a smart product is the ‘artifact’. Further, we differentiate between an
affordance and its realization through actualization, i.e., “the actions taken by actors as they
take advantage of affordances through their use of the technology” (Strong et al. 2014, p. 70).
Our conceptual findings are further illustrated in a real-world case study of a smart battery
solution. Our results contribute to the body of knowledge on smart service systems by
presenting a conceptual framework and propositions towards a mid-range theory from an
affordance-actualization perspective. Also, our work holds value for practitioners by allowing
them to analyze the potentials of smart technology and by providing a vocabulary to
consciously articulate the expected outcomes of participating in smart service systems.
We present our study as follows: The next section elaborates on the theoretical foundations of
smart service systems and affordance theory, followed by the description of our methodology.
Then, we present our conceptual results applying an affordance-actualization lens on smart
service systems. Section five illustrates our findings with a real-world case study of a smart
battery solution. In section six, we present the theoretical implications of our results and a
research agenda. Further, we discuss the managerial implications as well as limitations of our
study before concluding our research in the final section.
2 Theoretical Foundations
2.1 Smart Products, Smart Service, and Smart Service Systems
The idea of ‘smartness’ emerged along with technological advancements in sensing, monitoring,
analyzing, and controlling physical objects (Beverungen et al. 2017), which enabled building
intelligence–i.e., awareness and connectivity–into products (Allmendinger and Lombreglia
2005). These smart products offer the potential for innovating business models (Porter and
Heppelmann 2014, 2015) and play an increasing role in service delivery as their abilities allow
them to take an active role in service systems (Beverungen et al. 2017; Wünderlich et al. 2015).
We understand service systems as “a configuration of people, technologies, and other resources
that interact with other service systems to create mutual value” (Maglio et al. 2009, p. 395).
Smart products offer transformative potential on how value is co-created and captured in service
systems. This gives rise to the phenomenon of smart service systems (Beverungen, Müller, et
al. 2019), defined as “service systems in which smart products are boundary objects that
integrate resources and activities of the involved actors for mutual benefit” (Beverungen,
Müller, et al. 2019, p. 12).

3
Fig. 1: Conceptualization of smart service systems, based on Beverungen et al. (2019).
As boundary objects, smart products act as a reference point for service interactions maintaining
a single shared identity across all interacting communities. However, they also provide the
required flexibility to be interpreted differently by the involved actors to extract different
utilities from it (Beverungen, Müller, et al. 2019; Star and Griesemer 1989). In their
conceptualization of smart service systems, depicted in Fehler! Verweisquelle konnte nicht
gefunden werden., Beverungen et al. (2019) explain how smart products reside at the interface
(‘line of interaction’) between the basic roles of a service consumer and service provider
recognizing their built-in features ‘sensors, unique ID, location, data storage and processing,
actuators, interfaces, and connectivity’. Further, they assign widely recognized capabilities
(Porter and Heppelmann 2014; Zheng et al. 2019) of smart (connected) products partly to the
‘frontstage’ (monitoring, autonomy) and partly to the ‘backstage’ of a smart service system
(remote control and optimization). In the ‘frontstage’, the smart product is used to create and
capture value-in-use (Vargo and Lusch 2008) for the user of the product. However, in the
‘backstage’ (i.e., outside its immediate physical context), the product can provide data to
monitor, diagnose, or optimize the product’s usage (Beverungen, Müller, et al. 2019; Hunke et
al. 2021; Wünderlich et al. 2013). Further, retrieving data from a smart product can also be used
to provide additional value via services to an ecosystem of third parties (Papert and Pflaum
2017) or even to the product’s provider itself.
All in all, the properties of smart products give rise to various types of smart service, which we
define as “the application of specialized competencies, through deeds, processes, and
performances that are enabled by smart products” (Beverungen, Müller, et al. 2019, p. 12).
2.2 Affordance Theory and Affordance-Actualization Framework
The theory of affordances originates from the seminal work of the ecological psychologist
Gibson (1977, 1979). Following his view, goal-directed actors do not perceive objects as a set
of characteristics or material features. Instead, they rather recognize how the objects can be
used (i.e., what it ‘affords’ the actors in terms of action possibilities for goal-oriented behavior)
without requiring a cognitive analysis of the object (Gibson 1977; Volkoff and Strong 2017).
For example, a reasonably sized chair affords a person the possibility to either sit down or reach
something on a high shelf (according to her goals) without depending on the conscious analysis
of the chair’s material features (e.g., height or stability) (Volkoff and Strong 2017).
The concept of ‘affordances’ holds great potential as a lens for looking at a variety of IS topics
(Majchrzak and Markus 2012; Ostern and Rosemann 2021). However, some important themes
SMART SERVICE SYSTEM
SMART PRODUCT
Sensors
Unique ID
Location
Data Storage and Processing
Actuators
Interfaces
Connectivity
Back-Stage Analytics
Remote monitoring & diagnostics, Data
aggregation & analytics, Decision-making
Front-Stage Use
Operation, Physical embedding, …
Remote Control
Line of Interaction
Remote Optimization
MonitoringAutonomy
Service Consumers
Service Providers
Providers’
Value-in-Use
Providers’
Activities
Providers’
Resources
Consumers’
Value-in-Use
Consumers’
Activities
Consumers’
Resources

4
should be recognized when applying affordance theory to explore how technology is perceived
and used by an individual or organizational actors: first, affordances only arise from the
relationship of technology and its user–and not from the technology itself (Chemero and Turvey
2007; Volkoff and Strong 2017). Thus, a technological artifact has not any affordances except
concerning a specific or archetypal actor with a set of tasks related to the actor’s goals (Strong
et al. 2014; Volkoff and Strong 2017). Second, affordances should be used to describe action
possibilities for goal-directed actors–not actual actions, objects, or states (Strong et al. 2014;
Volkoff and Strong 2017). In contrast, the actualization as the action itself relates to the
structure, i.e., the actual configuration of behaviors making up the action (Strong et al. 2014;
Volkoff and Strong 2017). These actions then lead to a state reached after realizing an
affordance, which we call ‘immediate concrete outcome’ as opposed to affordances as the
potential action (Strong et al. 2014).
When applying the theory of affordances in an IS context, several frameworks have been used
(e.g., functional affordances (Knote et al. 2021; Markus and Silver 2008; Seidel et al. 2013) or
technology affordances and constraints (Effah et al. 2021; Leonardi 2011; Majchrzak and
Markus 2012)). This is also reflected in an ongoing debate on a few conceptions of applying
the theory (Fromm et al. 2020; Ostern and Rosemann 2021; Pentland et al. 2021; Volkoff and
Strong 2017). However, regarding our research question, an affordance-actualization
perspective as introduced by Strong et al. (2014) (Fig. 2) seems particularly promising. In
addition, our study considers the principles for examining affordances in IS research presented
by Volkoff & Strong (2017). In Strong et al.’s (2014) study on the implementation of electronic
health records (EHR), the authors describe how the EHR features, the characteristics of
individual actors and the organization’s goals give rise to multiple affordances. Further, they
identify necessary goal-directed actions to actualize the affordances, e.g., creating and using
EHR templates and following standard procedures (action) to realize the potential of
standardizing data, processes, and roles (affordance). They deduce how individual-level
immediate concrete outcomes aggregate to an organizational level and how affordances are
interrelated and interact. These relationships can be described in two ways: 1) as a temporal
relationship (e.g., realizing the affordance of capturing and archiving digital data gives rise to
the affordance of accessing information remotely) or 2) as a feedback loop (cf. Fig. 2) so that
immediate concrete outcomes affect actors, their organizational context or artifact features to
give rise to further affordances that can be actualized (Leonardi 2011; Strong et al. 2014).
Fig. 2: Affordance-actualization framework, based on Strong et al. (2014).
A few articles already apply affordance theory in the context of smart service (systems). Knote
et al. (2021) take a functional affordance perspective to develop propositions on how different
Affordances
Potentials for an Individual or Organization
Technological
Artifact
Actors and
Their Goals
Affordance
Potential for goal-
oriented behavior
to achieve an
immediate
concrete outcome
Actualization Processes
Realization of Potentials
Actions
Actualized
Immediate
Concrete
Outcomes
Feedback from Actions and Outcomes
External
Factors
External
Factors
Organizational Context

5
types of smart personal assistants (e.g., Amazon’s Echo products) afford value co-creation.
Effah et al. (2021) examine affordance and constraint processes in smart service systems with
a focus on applying smart products in seaports. Finally, Naik et al. (2020) examine affordances
in an IoT context and identify three different types of affordances, which they interpret as a
“step-by-step mechanism through which the IoT creates organizational outcomes” (Naik et al.
2020, p. 240). These applications underline the growing interest in translating insights from
affordance theory to smart service systems. However, existing research yet lacks a thorough
analysis of how the specific characteristics of smart service systems can be reflected and how
utilizing affordance theory as a lens can change how we look at the phenomenon.
3 Methodology
To explore affordances and actualization processes in smart service systems, we conduct multi-
case study by interviewing senior decision-makers of 10 companies. Following a generic
purposive sampling approach (Bryman 2016), we apply pre-defined criteria to identify suitable
cases: the company already has deployed a smart service system at least in a mature prototype
version, the interviewees are business or technical experts, and they play a significant role in
shaping or running the smart service system (Patton 1990). Further, the selection is guided by
the intention to consider cases of different industries, company sizes, and levels of maturity.
For example, we include cases in the machinery and plant engineering industry but also
providers of medical equipment and products for the chemical industry (cf. Tab. 1) (Eisenhardt
1989). The interviews range between 39 and 67 minutes and were conducted between May and
July 2021 via video-conference software. All interviews are recorded and transcribed before
being coded and analyzed using MAXQDA software. To reduce the subjectivity of interviewing
only one person per case, we verified and supplemented the interview data with information
available from public sources (e.g., online descriptions of smart service applications).
Throughout the conversations, we follow a semi-structured interview guideline to ensure
comparability among the cases, which is particularly important as the interviewees hold
different roles within their respective companies. The overarching goal of each interview is to
understand the smart service system, i.e., to determine critical value-creating actions,
technological features of the smart product, and relevant characteristics of the involved actors.
For this purpose, we ask questions to obtain both retrospective and current perceptions from
those experiencing and actively shaping smart service systems in practice (Bryman 2016). After
conducting 7 interviews, we already began with analyzing the data. Despite the topic of
affordances in smart service systems being far from exhaustively covered, including 3
additional cases did not substantially challenge our elaborated conceptual understanding.
Therefore, we interpret the sample of 10 cases as a sufficient level of theoretical saturation for
this study’s purpose, which seems appropriate to balance between empirical evidence and the
volume of data in the context of theory-building case study analyses (Eisenhardt 1989).
Case
(mm:ss)
Description of Smart Service System
Role
CarCo
(65:43)
Digital innovation unit of a global car manufacturer
providing an intermodal mobility platform
CEO/CTO
ChipCo
(60:18)
Provider of semiconductor software and chips and
further wireless technology solutions
Vice President
Technology EMEA

6
DriveCo
(59:48)
Provider of integrated electric drive systems with
IIoT-based automation services
Head of
IIoT & Service
FilterCo
(61:33)
Provider of filter systems and pressure vessels,
equipped with IoT-technology
Managing Director
GearCo
(67:05)
Provider of electromechanical drive systems for
machines with IoT-based monitoring services
Business Developer
Digitalization
HealthCo
(47:39)
Provider of medical devices with subscription-based
software packages
Managing Director
DACH
IoTCo
(41:07)
Subsidiary firm of a technology company focusing on
AI-powered solutions for IoT ecosystems
Product Manager
Track & Trace
LaserCo
(43:53)
Provider of production machines and software
solutions to implement IoT-based smart factories
Product Manager
Digital Service
PrintCo
(39:28)
Provider of printing machines integrated with cloud-
based performance services
Global Head
Subscriptions
ValveCo
(55:12)
Provider of control valves for hydraulic systems
complemented with digital service apps
Director
Engineering
Tab. 1: Overview of 10 interviews with smart service system providers.
After the interviews, we apply qualitative content analysis (Hsieh and Shannon 2005; Mayring
2004) to our data to identify the actors’ goals and organizational context, smart product features,
affordances, actualization actions, and immediate concrete outcomes. In a second step–similar
to Strong et al. (2014)’s analysis of EHR implementation–we synthesize our findings: Aiming
for an appropriate and consistent level of granularity, we arrange the coded items as affordances
and corresponding actualization processes (Volkoff and Strong 2017). Interviewing only one
person per case does not allow for claiming completeness of the identified affordances.
However, comparing the heterogeneous set of cases allows us to abstract and theorize how
smart products give rise to potentials of goal-oriented behavior (affordances) and how actors
realize these potentials (actualization processes). Despite a wide variety of additional
potentially interesting questions to analyze the data (e.g., interrelations of the affordances), we
restrict our analysis to the general mechanisms of affordances and actualization processes in
smart service systems as presented in the following section. In doing so, we propose a
conceptual framework of affordance-actualization processes in smart service systems including
six propositions. Adding to the described multi-case study, we complement our research and
illustrate the conceptual findings with a real-world case study building on three consecutive
workshop sessions. With the example of EnergyCo’s smart battery solutions, we provide a more
applicable perspective on how our proposed affordance-actualization view can help to
decompose multi-actor constellations in smart service systems. In section 5, we provide more
details on the content of the workshops and how this evaluative episode is linked to the already
presented research methodology.
4 Affordance-Actualization Processes in Smart Service Systems
In this section, we build on our multi-case study to propose a conceptual framework (Fig. 3)
incorporating affordance-actualization theory (Strong et al. 2014) as a lens to further evolve the

7
concept of smart service systems (Beverungen, Müller, et al. 2019). By presenting and
discussing six theoretical propositions (P1-P6), we underline certain aspects of the framework
and make its implications for the conceptual understanding of smart service systems more
tangible. For the most part, these propositions result directly from the combination of the two
established frameworks presented in section 2 (cf. Fig. 1 and Fig. 2) and are further supported
by evidence from our case study (cases given in parentheses). Greater adjustments based on
empirical findings are mainly made regarding P5. In the subsequent section, we, first, describe
affordances in smart service systems (left side), and then present findings regarding the
actualization processes in smart service systems and their implications for the conceptualization
of smart service (right side).
Fig. 3: Affordance-actualization framework and propositions for smart service systems.
Past studies on affordances typically only consider the direct user of an artifact. However,
“smart products can be interpreted differently by service consumers and service providers,
subject to the value proposition that they offer” (Beverungen, Müller, et al. 2019, p. 12). The
interview data arranged as affordances and actualization processes support this as we found that
smart product providers increasingly seek to interact with the product during its usage. For
example, PrintCo connected most of its customers’ machines with a customer spanning IoT-
cloud network. Having access to usage data made them “recognize that many customers remain
below their potential machine productivity” (PrintCo). They understand this as an affordance
to support their customers in using their products, primarily realized through analytics-based
service offerings. Hence, we propose that in smart service systems, multiple dimensions of
organizational contexts and the contained affordances and actualization processes should be
reflected. To illustrate this approach, we consider a product’s provider and its user as a basic
service system, akin to the conceptualization of smart service systems (Fig. 1)–acknowledging
that smart products can give rise to affordances for ‘third parties’ as well.
Affordances
Potentials for an Individual or Organization
Product’s
User
Goal-oriented
Actor
User’s
Affordance
Potential for Goal-
oriented Behavior
Actualization Processes
Realization of Potentials
Feedback from Actions and Outcomes
External
Factors
External
Factors
Product’s
Provider
Goal-oriented
Actor
Provider’s
Affordance
Potential for Goal-
oriented Behavior
SMART SERVICE SYSTEM
Line of Interaction
Smart
Product
Technological
Artifact
User’s
Immediate
Concrete
Outcomes
Provider’s
Actions
User’s
Actions
Provider’s
Immediate
Concrete
Outcomes
Provider’s Organizational Context
User’s Organizational Context
P1
P2
P2
P3
P4
P5
P6

8
P1: Multiple organizational actors interact with smart products as they allow for remote access
and reconfiguration giving rise to multidimensional affordances (CarCo, FilterCo,
GearCo, HealthCo, IoTCo, PrintCo, ValveCo).
4.1 Actors and Their Affordances in Smart Service Systems
As discussed in section 2, affordances generally arise from the technology-user relationship and
are not mere reflections of the technology itself. This ontological theme offers a useful
perspective on smart service systems: As the product manager of IoTCo’s track and trace
solutions points out, making a ‘thing’ smarter, i.e., increasing its technological capabilities, is
not an end in itself. It is rather the combination of these features with an actor’s goals and
organizational context that might give rise to goal-oriented behavior. During the journey of
learning about the user’s goals and context, his team came to realize that the offered artifact fits
better for tracking load carriers than the asset itself, as this provides more potential for
decreasing costs and increasing transparency in the business context of the product’s users.
Multiple interviewees referred to the importance of turning this view into action by deliberately
approaching well-trusted customers with suitable goals and organizational context to pilot
smarter versions of their product to understand which affordances are perceived. This early-
stage feedback process helped the companies to purposively promote the potential of these
identified affordances–regardless of whether they were anticipated or not.
P2: Desirable potential actions enabled by smart technology arise from the technology-user
relationship, not only the smart product’s features itself. (CarCo, ChipCo, DriveCo,
FilterCo, GearCo, HealthCo, IoTCo, PrintCo)
Next, we examine whether the formation and perception of affordances take place at the
intersection of multiple organizational contexts. As our conceptual framework serves as a rather
static portrait of a smart service system’s mechanisms of perception and action, we argue that
affordance as a potential for action is separated by the line of interaction spanned by the smart
product as a boundary object. However, the actions in actualization processes, then, can and
often do cross the line of interaction. Few of the examined cases emphasize dividing even the
overall affordance-actualization process along the distinct organizational contexts, thus using
the smart product as a true boundary object. This allows the product’s provider to “standardize
their offerings allowing for a better scalability of the smart product business model” (IoTCo).
In our interview sample, we see tendencies for the more mature a solution is, the more
independently different actors interact with the smart product (e.g., PrintCo, HealthCo and
IoTCo). In contrast, companies who still extensively explore technological possibilities
typically closely collaborate with their smart products’ users (e.g., FilterCo, DriveCo,
ValveCo).
P3: Actors interacting with the smart product perceive affordances largely independently as
smart products serve as a boundary object at the line of interaction. (GearCo, HealthCo,
IoTCo, PrintCo)
4.2 Smart Service as an Actualization Process
We now turn towards the actualization processes as mechanisms to realize the discussed
affordances. First, the multi-case study substantiates our assumption that a distinction between
affordances and their actualization seems appropriate. The interviewees in our sample name
multiple actualization actions such as identifying a suitable combination of hardware and
software packages for the individual customer (HealthCo), installing the smart product at the

9
user’s site (IoTCo), handling and processing the accessible data (LaserCo, CarCo) or making
value-adding suggestions for improvement of the user’s processes based on analytical insights
(PrintCo). This extension of the conceptualization of smart service systems provides a clearer
description for theory and practice, as it further clarifies distinctions between potentials, actions,
and outcomes.
P4: Due to the artifact’s complexity, affordances enabled by smart products require
coordinated actions, i.e., actualization processes, to realize their potential. (CarCo,
DriveCo, FilterCo, HealthCo, IoTCo, LaserCo, PrintCo)
We identify cyclic processes of actions and immediate concrete outcomes in smart service
systems: In the case of CarCo, increasingly connected cars drive the transition in the industry’s
development practices from multi-year lifecycles towards a continuous improvement via
software updates. One of our most promising findings builds on this insight: separating the
action potential from its realization operationalizes the conceptual understanding of ‘smart
service’. Comparing different cases, we found that some affordances can be realized within an
actor’s organizational context (‘self-service’) whereas others require crossing the line of
interaction (‘interactive service’). Further, by looking at the outcomes we observed that not only
the smart product’s user but also its provider can obtain ‘value-in-use’–and not only value-in-
exchange (Grönroos and Voima 2013). This notion challenges existing categorizations in
‘service providers’ and ‘service consumers’ (cf. Fig. 1, Beverungen et al. (2019)). Hence, in this
study, we instead distinguish between the smart product’s provider and the user. In the
examined cases, we find examples of all potential combinations resulting in four constellations
of smart service in dyadic smart service systems, as illustrated by the hatched arrows in Fig. 3
and the matrix in Fig. 4.
Fig. 4: Classification of smart service constellations in smart service systems.
As an illustration, one case now experiments with a “shadow mode” where the user initially
gives his consent to the provider (III) to autonomously collect usage data to improve their
analytical models and understand the customers’ processes (IV). After some time, the provider
leverages this knowledge by creating customized offerings and rewards the user by offering
performance-improving service free of charge for a limited amount of time (I). Besides these
individualized offerings, the user can use standardized service offerings enabled by smart
technology such as monitoring the condition of the product and accessing historical sensor data
without further interaction (II). While this notion is in line with the definition of ‘smart service’
given in section 2, we acknowledge that this simplified classification neglects important aspects
such as the co-creation of value for both actors and the role that third parties might play. Thus,
we suggest further research to critically examine and potentially extend this classification.
Smart Product User
Service Beneficiary
Smart Product Provider
Interaction
Self-Service
Interactive Service I. Provider
à
User
II. User
à
User
III. User
à
Provider
IV. Provider
à
Provider
Made Possible
by Smartness

10
P5: Both actors can be the beneficiary of smart service by achieving an immediate concrete
outcome. Further, both can actualize affordances for their own benefit (self-service) or
some other actor’s benefit, thus, crossing the line of interaction (interactive service).
(Combined evidence from all cases to develop the classification)
Finally, the immediate concrete outcomes achieved through actualization do not only trigger
further actions to realize already existing affordances but can also change the initial agencies
and affordances via feedback loops–at least across a larger time frame: After the initial release
of their smart product, ValveCo understood that the built-in memory space severely constrained
value-adding activities, which led them to replace the initial hardware with an electronic
interface card, and ultimately, realize multiple new smart service potentials. This proposition
might be particularly interesting for research on smart service systems when taking a dynamic
perspective to better understand how consecutive actions iteratively shape the configuration of
smart service systems by adjustments of the actors’ goals or the smart product’s features.
P6: The actions and outcomes of actualization processes provide feedback affecting the actors,
their organizational context, and the smart product’s features, giving rise to new
affordances. (CarCo, DriveCo, FilterCo, GearCo, IoTCo, PrintCo, ValveCo)
All in all, our qualitative analysis supports the proposed conceptual framework and
demonstrates how an affordance-actualization perspective may contribute to an understanding
of the smart service system phenomenon. The heterogeneity of our sample allows us to
highlight different aspects as discussed along the six propositions. Particularly the different
levels of maturity between cases have a large impact on the richness of information regarding
the discussed topics. However, this qualitative conceptual research only serves as an initial step
towards theorizing affordances in smart service systems and should be complemented by
additional empirical research.
5 Illustrating Multi-Actor Affordances with the Case of EnergyCo’s Smart Batteries
After introducing a framework and six propositions on how multiple actors perceive and
actualize affordances in smart service systems, we now turn to illustrate these conceptual
findings with an in-depth case study. With the case of EnergyCo’s smart battery solutions, we
provide a more applicable perspective on how our proposed affordance-actualization view can
help to decompose multi-actor constellations in smart service systems. The case study was
conducted after we developed the conceptual framework, which we presented and discussed in
an initial version of this article (Heinz et al. 2022). Applying the conceptual results in a second
qualitative research episode serves two purposes: first, we can demonstrate its conceptual
implications by re-translating the generalized observations back to an empirical layer. Second,
we retrieve valuable managerial feedback that allows us to evaluate our findings regarding their
accuracy and to unfold further insights regarding their practical applicability.
5.1 Case Introduction and Conducted Workshops
Founded in 2011, EnergyCo soon became a regional leader in providing innovative battery
swap systems and charging infrastructure elements. Their current core product is a universal
battery that can be integrated into a wide variety of energy storage applications such as modular
house storage solutions in the private sector but also different use cases in industrial scenarios.
In the past two years, EnergyCo launched a smart service systems engineering (SSSE) project
to identify opportunities where they can leverage existing IoT-related technical capabilities of
their products to create additional value-in-use and become a smart service provider. In the

11
process of this project, EnergyCo decided to focus on the application scenario of uninterruptible
power supply (UPS), which they primarily offer for small and medium-sized enterprises as
customers. An UPS system locally stores energy and automatically bypasses the local power
network in case of a power outage, thus increasing the reliability of critical local infrastructure
(e.g., server networks, etc.) and preventing issues such as data loss or hardware damage.
In the following case study, we will focus on the multi-actor setting of such IoT-enabled UPS
systems, which was subject of a series of three workshops that have been empirically observed,
documented, and analyzed. At the time of the workshops, EnergyCo is still in a ‘proof-of-
concept’ stage on their journey towards becoming a smart product provider. Yet, their case is
well-suited for this study’s purpose, as the emerging ‘as-a-Service’ business model offers rich
insights into a multi-actor smart service setting. In the specific constellation, EnergyCo plays a
critical role as both a technology provider and orchestrator of the ecosystem, and thus lays the
foundation for the successful service exchange in the arising smart service system. Further,
EnergyCo already developed first technical prototypes and intensively discussed the smart
service offerings with potential stakeholders fulfilling each of the introduced roles. Therefore,
they were able to make precise statements about the needs, goals and context of all partners
involved.
The overarching goal of the workshops was to reflect on EnergyCo’s current state of smart
service innovation and to identify further steps to refine the multi-actor business model and a
roadmap of the required technical features. In total, we conduct three workshops ranging on
average 1:53 hours. The first workshop aimed at building an understanding of the smart service
provider, their products and capability. Further, relevant actors and roles within the innovation
process were identified, which was facilitated by the framework of Anke et al. (2020). With the
UPS application in mind, the second workshop focused on discussing goals, contextual
conditions, and pain points of all relevant roles. During the third workshop, we defined the
affordances of different actors and identified the key activities for value creation (i.e., the
actualization actions) within the smart service systems. Despite technical features have been
discussed throughout all the three workshops, we deliberately chose an ‘affordance-first’
approach in mapping the envisaged smart service system. The individual workshops’ focal
topics and outcomes are described in Tab. 2.
Nr.
Duration
(hh:mm)
Focus
1
02:04 h
Understanding the case (smart service provider, their products as well as
technical and organizational capabilities)
2
01:14 h
Definition of relevant stakeholders and their goals, context, and pain points
3
02:21 h
Identification of affordances and actualization actions within the smart service
system
Tab. 2: Overview of the workshop series with EnergyCo.
In all three workshops, two researchers, two employees of EnergyCo and one employee of a
closely collaborating technology provider were participating. The three workshops have been
recorded and documented via meeting minutes, further the results of the applied methods were
available during the case analysis. Between and after the workshops, a group of two authors
discussed the empirical findings and their implications as well as depictured the respective
insights in a representable format. Despite planning to conduct another series of workshops
with the partner in the future, we already “reached closure”, i.e., theoretical saturation, at this

12
step of the project for the purpose of demonstrating this work’s conceptual findings (Eisenhardt
1989). Finally, after finishing the in-depth case study, we reflected on the insights gained from
both empirical episodes of our research design and deduced valuable observations on how to
transfer the conceptual approach into practicable formats (cf. section 5 and 6).
5.2 The Ecosystem Forming around EnergyCo’s Smart Products
Throughout the workshops, a first important result was to capture and differentiate participating
actors in the smart service system focusing on the envisioned ‘operations’ phase after
implementing and instantiating the respective smart service features. For this purpose, we take
a role-centric approach and postpone decisions which actors ultimately fulfill these roles. As
the workshops suggest, in different stages of rolling out the offering it might be either beneficial
or obstructive to unify roles, e.g., EnergyCo being the technology provider and service operator.
However, to derive and assess the technological features of the smart product by discussing its
multi-actor affordances, these strategic decisions can be neglected.
In total, we identify four primary roles interacting with the smart product during its usage as a
UPS: first, EnergyCo itself acts as the ‘technology provider’ that is constantly evolving the
implemented software features, and further, aims to gain a better understanding of how their
physical products are used in the field. Second, another company (e.g., an electrical service
provider) serves as the ‘service operator’ throughout the UPS life cycle who applies the
technology provided by EnergyCo to operate and maintain the system, whereby as much
interaction with the product as possible takes place via a remote connection. Third, the actual
customer of the UPS can apply certain IoT features to monitor the reliability of its emergency
system (“peace of mind”) and access all required information in case of an outage event where
the UPS is activated (e.g., receive the expected run time before the battery is discharged).
Finally, EnergyCo plans to realize the smart service via an ‘as-a-Service’ business model, where
the customer leases the whole UPS system combining the smart product and additional service
offerings instead of purchasing the product and paying a monthly service fee. However, it is
neither the core competency of the technology provider, nor the service operator to offer such
financial services and take the associated risk. Thus, a fourth role can be described as an external
‘financial service provider’ buying the product, and then, lending it to the UPS customer while
forwarding a service fee to the service operator. The overall network of participating roles in
the smart service system as well as their interaction with each other and the smart product are
depicted in Fig. 4. Further, the illustration depicts the modular structure of the smart product’s
IoT components, which will be discussed in the following subsection.

13
Fig. 5: Generalized structure of EnergyCo’s envisioned smart service system.
5.3 How EnergyCo’s Smart Products Enable Multi-Actor Affordances
Another observation derived from the workshops was the demarcation and description of five
modular IoT feature modules (cf. Fig. 4): 1) a product log allowing to access historical data of
the product, 2) a module allowing to easily access pre-processed live
1
data of the respective
battery, 3) an aggregated condition monitoring view
2
, 4) a data-driven maintenance scheduling
3
tool, and 5) an application to support event handling, i.e., providing relevant information during
power outage incidents. Referring to the conceptual framework, these hardware and software
components manifest a set of technological artifacts that transform the core battery system into
a smart product.
These functional blocks can be flexibly combined into individualized touchpoints for the
respective interacting roles and form the technical basis for providing smart service to the
relevant stakeholders. By discussing the affordances of these feature modules referring to the
goals and context of the different stakeholder groups, the participants also defined which of the
modules should be included in the touchpoints for the different stakeholder groups. In Tab. 3,
we provide the current set of accessible feature modules for each of the involved stakeholders.
For example, while the service operator should be able to access all the modules as he is
involved in the overall usage process, the financial service provider is only interested in
monitoring the historical and current health condition of the financed UPS systems.
Product Log
Live Data
Condition
Monitoring
Maintenance
Scheduling
Event
Handling
Technology
Provider
X
X
1
In this application context, real-time availability means a small single-digit minute time window.
2
e.g., minimum available power, state of health (SoH) of the battery system.
3
Including prediction, planning, and documentation of the maintenance tasks.
Technology Provider
Service Operator
Financial Service Provider
Lead Customer
IoT Feature Modules
Service Mode
Aggregated Mode
Provider Mode
Customer Mode
UPS active
Event Handling
UPS inactive
Live Data
Condition Monitoring
Maintenance Scheduling
Product Log
Provides UPS System Operates UPS
Leasing FeeOne-Tim e-Payment
Service Fee

14
Service
Operator
X
X
X
X
X
Lead
Customer
X
X
Financial
Service
Provider
X
Tab. 3: Mapping of stakeholders and accessible IoT feature modules.
As a third step, we apply our proposed affordance-actualization perspective to analyze, how
and why the respective IoT feature modules allow the provision of smart service, i.e., the
creation of value-in-use enabled by the smart product. For this purpose, we discussed the
respective smart product-enabled value propositions towards each of the four roles, which we
link with the ‘affordances’ construct in our framework. We then mapped each affordance with
the required IoT feature modules and described the stakeholder’s overarching goals for
participating in the smart service system. Finally, we considered a minimal set of required
value-creating activities (‘actualization actions’) and the immediate outcomes of realizing each
of the identified affordances (‘outcomes’). The results of this workshop episode are presented
in Tab. 4. The case study demonstrates that smart products such as EnergyCo’s UPS systems
can simultaneously afford multiple actors to realize value, as their certain technical features
provides relevant information for them to take goal-oriented actions. Further, the case study
revealed that introducing these novel technologies allows actors to “co-create” mutual value–
for example, by allowing a service operator to remotely operate and maintain the system and
thus save expenses, or by facilitating novel financial models. The workshop participants also
reflect on the shared interest among all stakeholders to collaborate towards a more durable, and
thus sustainable UPS usage scenario. However, the workshops also unfolded certain challenges
to evolve the smart service concept into a marketable stage such as deciding on reasonable
pricing mechanisms to distribute the added value between the involved stakeholders.

15
Stakeholder
Perception
Actualization
Goal
IoT Feature
Modules
Affordances
Actions
[Stakeholder]
Outcomes
Technology
Provider
Increasing product
lifespan and reliability
Product Log +
Condition
Monitoring
Understanding better the
battery’s lifecycle at the
customer site
Collect and analyze usage
data
[Technology Provider +
Service Operator],
adapt the battery system
[Technology Provider]
Possibility to improve
battery development and
UPS configuration
Condition
Monitoring
Improving the existing IoT
hardware and software
Collect and analyze usage
data and feedback
[Technology Provider +
Service Operator],
rework the IoT applications
[Technology Provider]
Continuous evidence-based
improvement process
Condition
Monitoring
Identifying unfulfilled
needs (e.g., information
gaps) to develop novel IoT
applications
Collect and analyze usage
data and feedback
[Technology Provider,
Service Operator],
develop and deploy novel
IoT applications
[Technology Provider]
Deeper understanding and
inspiration for possible new
IoT applications
Service
Operator
Efficiently guarantee
reliability of the battery
Condition
Monitoring +
Live Data
Remotely detecting
operational problems
Establish a continuous
remote connection,
automatically track usage
UPS sends an alarm and IoT
system provides further

16
data
[Service Operator]
information if battery/UPS
behaves unexpectedly
Condition
Monitoring +
Event Handling
Remotely solving
operational problems
Establish remote connection
and modify configurations
[Service Operator]
Ability to solve problems in
a fast and efficient way
Condition
Monitoring +
Product Log
Estimating the state of
health of the battery
Establish remote
connection, collect, and
analyze usage data
[Service Operator]
Service Operator can decide
to replace the battery when
needed
Condition
Monitoring +
Maintenance
Scheduling
+ Event Handling
Planning (physical)
maintenance in accordance
with customer needs
Coordinate maintenance
date with customer and
ensure full functionality via
remote maintenance
[Service Operator + Lead
Customer]
Ability to offer personalized
maintenance
Condition
Monitoring
Understanding and
optimizing the UPS’s
charging cycles when UPS
is inactive
Collect and analyze usage
data, reconfigure UPS
[Technology Provider +
Service Operator]
Improved operating
efficiency
Lead
Customer
Reliable power supply
to allow safe reaction to
outages
Condition
Monitoring
Checking battery condition
and monitoring available
UPS capacity
Collect, analyze, and
visualize usage data
[Technology Provider +
Service Operator]
Reassurance of reliable
power supply
Condition
Monitoring +
Event Handling
Accessing further
information that allows to
Establish (remote)
connection, track usage data
and provide required
information in real-time
Ability to consciously
respond to power outages

17
make conscious decisions
during power outages
[Service Operator + Lead
Customer]
Financial
Service
Provider
Calculatable risk and
profitable ROI
Condition
Monitoring
Assessing current state of
investment and refining
asset prediction models
Collect and analyze usage
data, provide target-actual
comparison
[Technology Provider +
Service Operator]
Ability to continuously
evaluate state of investment
Condition
Monitoring
Making evidence-based
investment decisions
Collect and analyze usage
data, provide benchmarking
insights
[Technology Provider +
Service Operator]
More calculatable risk,
enhanced trust in the asset
and increased predictability
of investment decisions
Tab. 4: Affordance actualization overview of EnergyCo’s smart service system.

18
6 Discussion
In this section, we first review the theoretical implications of our study and pinpoint avenues
for future research in form of a research agenda. Afterward, we discuss the managerial
implications of our findings, point out the limitations of our study and provide an outlook on
how we plan to extend our research.
6.1 Theoretical Implications and Research Agenda
Our study offers theoretical implications to the ongoing debate on co-creating and realizing
value through digital innovation by underpinning and extending Beverungen et al. (2019)’s
conceptualization of smart service systems. By taking an affordance-actualization perspective,
we explain how smart products give rise to affordances for multiple actors in the system and
how these potentials can be realized. We hope to inspire further conceptual research on this
relevant phenomenon with this mid-range theoretical perspective. To make this potential more
concrete, we refer to three ongoing academic discussions (‘research streams’), on which future
research can build upon to establish a more rigorous theory of affordances in smart service
systems: 1) business model innovation in smart service systems, 2) value co-creation in multi-
actor service ecosystems, and 3) IT-enabled affordances beyond a single-organizational level.
In the following, we discuss linkages to the perspective established in this article and exemplary
research avenues (RAs) as potential starting points for future studies in IS research (and
beyond). The resulting research agenda is summarized in Tab. 5.
Research Stream
Exemplary Research Avenues (RAs)
Business model
innovation in smart
service systems
RA1: Apply the proposed theoretical perspective to design
applicable artifacts assisting business model innovation
processes in smart service systems.
RA2: Analyze how and why the different actors in smart service
systems perceive smart service outcomes as ‘valuable’.
RA3: Study how actors can equilibrate the perceived benefits
and sacrifices via suitable smart service revenue models as
monetary compensation.
Value co-creation in
multi-actor service
ecosystems
RA4: Emphasize the multi-actor nature of smart service systems
by identifying and formalizing ‘smart service ecosystems’ as a
unit of analysis.
RA5: Reflect on how smartness-enabling technologies
potentially change prevailing theoretical constructs in service
science.
RA6: Discuss how aligning different constructs in the multi-
actor affordance-actualization process manifests institutional
arrangements for value co-creation and service exchange.
IT-enabled affordances
beyond a single-
organizational level
RA7: Investigate aggregated affordances on an (eco-)system-
level, which are shared by multiple economically independent
actors.

19
RA8: Study dynamic path-dependencies, i.e., interrelations and
interactions of affordances, to understand the ‘imbrication’
processes in inter-organizational settings.
Tab. 5: Research agenda to build on this work’s theoretical implications.
Business Model Innovation in Smart Service Systems
Our work underlines the scientific potential of examining smart service systems, as related
technologies rapidly advance, and more mature cases can be subject to empirical research.
Hence, we see great potential for future studies in the field of business model innovation in
smart service systems. Our results can serve as a conceptual basis for further empirical or
design-oriented studies assisting practitioners in their process of implementing these emerging
technologies in viable smart service business models.
As a first exemplary research avenue, future research can apply our findings to design
applicable artifacts (e.g., processes, methods, tools) and thus, extend existing research of smart
service innovation (Pöppelbuß et al. 2021) and smart service systems engineering (Halstenberg
et al. 2019; Wolf et al. 2020). Potential affordance-driven design choices could include
separating a smart product’s bare technical features from the resulting potentials for goal-
oriented behavior (i.e., affordances) in a certain application context, emphasizing required
engagement through actualization actions that must be taken to realize potentials and achieve
valuable outcomes, or distinguishing between potential interactive service or self-service
constellations. Further, deliberate consideration of feedback processes in the smart service
system can assist in creating a road map for technical or business-related features.
RA1: Apply the proposed theoretical perspective to design applicable artifacts assisting
business model innovation processes in smart service systems.
Second, a highly relevant discussion in smart service innovation is to translate the objective
achievable outcomes in smart service systems (e.g., the availability of certain information) into
the subjective value perceptions of the concerned actors as the balance between the ‘benefits’
and the ‘sacrifices’ made to obtain it. Providing reference cases or methodological support can
then be applied by decision-makers to prioritize their innovation efforts on ‘win-win’
constellations for the involved actors and establish an equilibrium through adequate monetary
compensation. Our extension of existing smart service conceptions is particularly relevant in
this context as traditional service provider versus service consumer roles do not necessarily
hold in smart service settings. Instead, smart products’ remote capabilities and layered
architecture turn them into boundary objects that allow the parallel realization of complex
patterns of value-creating activities beneficial for multiple actors (see Fig. 4 and Tab. 4). We
suggest further research to study smart service outcomes in more detail from a value-oriented
perspective to derive further insights for business model innovation (e.g., robust actor
alignments or common revenue models).
RA2: Analyze how and why the different actors in smart service systems perceive smart service
outcomes as ‘valuable’.
RA3: Study how actors can equilibrate the perceived benefits and sacrifices via suitable smart
service revenue models as monetary compensation.
Value Co-Creation in Multi-Actor Service Ecosystems

20
In line with current discussions in service research (Vargo and Lusch 2016, 2017), we ask
whether a dyadic juxtaposition of a ‘provider’/‘producer’ and a ‘user’/‘consumer’ accurately
reflects prevalent actor constellations in smart service systems. Today’s service research
increasingly turns to rephrasing these constellations as ‘actor-to-actor’ networks. Therefore, we
replaced Beverungen et al. (2019)’s service-focused role names with names describing the
actors’ relation to the smart product, as our data suggest that both actors can be the beneficiary
of smart service (cf. Fig. 4). However, we argue that after all, the taken dyadic, micro-level
perspective does not adequately reflect the complex organizational actor networks forming
smart service systems. Thus, we encourage future research to extend our model by applying a
multi-actor service ecosystem perspective. In this spirit, our evaluative case study considers
affordances and actualization processes of multiple actors in EnergyCo’s smart service system.
While serving as a fruitful starting point towards evolving the concept of smart service systems
into ‘smart service ecosystems’, this work yet lacks to pinpoint all the transferable conceptual
insights from recent service research towards studying smart service systems. On the other
hand, future research can also build on our work to examine how the discussed emerging
technologies enabling smartness might affect prevailing knowledge on theoretical constructs in
service science.
RA4: Emphasize the multi-actor nature of smart service systems by identifying and formalizing
‘smart service ecosystems’ as a unit of analysis.
RA5: Reflect on how smartness-enabling technologies potentially change prevailing theoretical
constructs in service science.
Further, our study yet mostly neglects the potential of multiple actors aligning their
actualization actions, which might be a valuable perspective to operationalize the understanding
of value co-creation in smart service systems. Hence, it might be interesting to further
investigate the interaction in the ‘joint sphere’ of smart service systems and how such
interaction can be purposefully promoted–e.g., by building trust among actors or formalizing
governance mechanisms (Grönroos and Voima 2013; Matzner et al. 2021; Schüritz et al. 2019).
Referring to our proposed theoretical framework, this could result in shared goals among actors
(e.g., reducing information asymmetries), overlapping organizational contexts, and jointly
developed smart product capabilities manifesting shared institutional arrangements. Relating to
existing conceptualizations in service research, these institutional arrangements can be
considered as a constituent factor of successful value co-creation and service exchange in
service ecosystems (Vargo and Lusch 2016). However, so far, existing research lacks to
combine insights on affordances and their actualization with service research. Our conceptual
study can build the basis to bridge these two research streams and, therefore, close this research
gap.
RA6: Discuss how aligning different constructs in the multi-actor affordance-actualization
process manifests institutional arrangements for value co-creation and service exchange.
IT-Enabled Affordances beyond a Single-Organizational Level
This study broadens the scope of affordance research by taking a multi-actor perspective, as we
argue that smart products’ capabilities allow multiple actors to interact with the artifact, and
thus co-create value at once. In contrast, most studies on IT-enabled affordances examine
affordances and their actualization on an individual user level, and few on an aggregated single-
organizational level (cf. section 2.2). The domain of smart service systems appears as highly
promising to evolve existing theory and study affordances beyond a single-organizational level

21
since technology mediates between a multilateral set of actors and allows them to continuously
interact. Therefore, future research could build on our findings to expand affordance theory’s
implications from an organizational towards an (eco-)system-level where multiple
economically independent actors jointly give rise to and realize “mutual” or “shared”
affordances. In this spirit, another possibility would be to investigate shared affordances of
closely intertwined smart products like in smart manufacturing networks.
RA7: Investigate aggregated affordances on an (eco-)system-level, which are shared by
multiple economically independent actors.
Finally, our empirical data suggests that it could be promising to examine the interrelations and
interactions of affordances that are characteristic of smart products. Taking such a more
dynamic perspective could provide valuable insights to analyze and understand the ‘imbrication
of human and material agencies’ shaping smart service systems over time (Leonardi 2011). In
today’s connected world, such dynamic path-dependencies in the context of digital innovation
usually concern multiple intertwined actors and successful innovation takes continuous
collaborative efforts over time. Particularly the sudden ability to continuously integrate and
deliver new features rapidly transforms innovation potentials in previously product-driven
industries. Again, our results indicate that smart service systems constitute a promising
application domain to also derive more general knowledge, which hold for the application
context of further emerging technologies as well (Pentland et al. 2021).
RA8: Study dynamic path-dependencies, i.e., interrelations and interactions of affordances, to
understand the ‘imbrication’ processes in inter-organizational settings.
6.2 Implications for Practice
We consider our results also as useful for practitioners. First, a differentiation between
affordances and their realization can be a valuable construct for decision-makers to analyze
possibilities presented by smart technology. Further, consciously articulating expected
outcomes of participating in smart service systems supports more efficient management of
digital innovation within and beyond the organization (Heinz et al. 2021; Nambisan et al. 2017).
Particularly, our understanding of smart service can inspire practitioners to rethink traditional
roles of providers and consumers, as smart products and their connective capabilities allow
novel value-creating actor constellations. We provide the case study of EnergyCo’s smart
battery solutions as an illustration of these study’s implications and a potential blueprint for
practitioners applying our findings. Finally, the presented research agenda pinpoints potential
starting points for further applications of the proposed affordance-actualization perspective on
smart service systems. This holds great potential for researchers to create meaningful theory
and artifacts to support managers in solving practical problems in the future.
6.3 Limitations and Outlook
The results presented in this article certainly are subject to limitations. First, our multi-case
study lacks considering multiple perspectives within each case since we restrained our sampling
approach to providers of smart products and only interviewed one person per case. Adding more
interviewees to the sample would enhance a better understanding of the organizational
context(s) and collective actions in each case. However, to reduce this subjectivity, we verified
and supplemented the interview data with information available at public sources. Further,
conducting only one interview per person–despite asking for the case’s historical development–
somewhat impedes understanding the dynamics within each case. Thus, having multiple
sequences of interviews per case at different stages of maturity would certainly improve the

22
findings on affordances, their actualization and feedback loops, and particularly how they
influence each other over time. We partly address this limitation by conducting a more detailed
case study to evaluate and demonstrate our findings in section 5. However, we are still only
able to depict a static perspective on EnergyCo’s smart service system.
These limitations at the same time leave the potential for future research that can contribute to
answering our research question. Particularly, testing and extending the proposed findings by
conducting an in-depth longitudinal case study could be a useful extension (Street and Ward
2012), which we aim to conduct in the future. By examining a chronological timeline of events
in a real-world case, one could not only further illustrate the general utility of affordance theory
in the context of smart service systems but could also further develop our proposed framework
and contribute to the unresolved questions presented in the research agenda. Hence, we will
continuously observe EnergyCo’s path towards becoming a smart service provider and
complement these insights with consecutive interviews with the companies within our multi-
case study sample.
7 Conclusion
Smart physical products increasingly shape a connected IoT world and serve as boundary
objects for the formation of smart service systems. While these systems bear the potential to
co-create value between partners in various industries, IS and service research still struggles to
fully capture the phenomenon to support successful digital innovation in IoT settings. In this
work, we analyze the phenomenon of smart service systems taking an affordance-actualization
perspective. Based on a qualitative content analysis of a multi-case study, we identify elements
and propositions towards a mid-range theory for smart service systems as a basis for further
research in the IS discipline. We suggest that providers and users of smart products not only
realize their own affordances via their actions but also may affect the outcomes of other actors
in the service system. Finally, we demonstrate and evaluate our findings with an in-depth case
study and point out starting points for future research applying our proposed theoretical
perspective in a research agenda.
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