Industrial service innovation: Exploring the transformation process to digital servitization in industrial goods companies

The challenges of Industry 4.0 in the industrial goods markets lead to increasing dynamics and competition. As product suppliers can no longer secure their competitive position through former product-related competitive advantages, more complex product offerings and integrated solutions consisting of products and services, socalled "product-service systems (PSS)", are increasingly being offered. But how can PSS implementation and the digital servitization transformation process be successfully accomplished? This paper addresses this research question and examines the transformation process of several companies using a mixed-methods approach that includes the evaluation of objective data-based efficiency for an idealized servitization path. The study shows how important it is for companies to maintain or even strengthen former product-based competitive advantages and to build on them to develop new business areas. It also shows that companies are simultaneously implementing bi-directional product support services and customer support services. In addition, data-oriented services such as condition monitoring and remote services are proving to be the basis for offering more complex performance- and results-oriented PSS, where customers pay per unit produced rather than fixed fees. Moreover, for the first time, it can be concluded that digital services are the basis for the successful establishment of digital industrial IoT platforms.