The interplay between technology and services is reshaping industries in profound ways. Digital Servitization (DS) is an example of this transformation, a phenomenon where manufacturers integrate digital technologies into their service offerings, redefining traditional business models. This concept, explored in the context of industrial networks, forms the heart of recent research that dives into the micro-dynamics of this intricate process.

Elisa Carloni and Serena Galvani investigated Digital Servitization in a recent Italian Journal of Marketing publication. At its core, Digital Servitization is more than technology; it is a shift in relationships, resource utilization, and activity coordination. The study leverages the Actors-Resources-Activities (ARA) framework, a tool born from the Industrial Marketing and Purchasing (IMP) approach. This model provides a nuanced view of how interconnected elements like actors (individuals and organizations), resources (technological and human), and activities (strategic and operational) come together in Digital Servitization.

The research takes the example of Gamma, a pioneering Italian manufacturer, and unveils the real-world complexities of transitioning from product-centric to service-centric operations. Gamma’s journey, marked by challenges such as technological integration, internal resistance, and evolving external partnerships, underscores the importance of adopting a network perspective to grasp the full spectrum of DS implications.

We spoke with the authors to uncover practical insights for managers looking to integrate these innovations effectively into their operations.

How can managers effectively adapt their internal structures and roles to support the complex network of actors required in a Digital Servitization process?

Managers should prioritize organizational reconfiguration, collaboration, and skill development to adapt internal structures and roles for Digital Servitization effectively.

• First, the process requires readdressing professional figures, setting up specialized teams, and creating and transferring professional roles, such as service area managers and service ambassadors.

• Second, DS calls for incremental collaboration of teams and departments, where alignment among IT, sales, and production teams becomes crucial for the strategy’s success. In this sense, leadership is critical in fostering communication and driving reorganization efforts.

• Finally, investing in employee training and new hiring or reskilling human resources can ensure a smooth transition to digital and service-oriented mindsets. This can guarantee the development of technical and business competencies while smoothening organizational resistance.

What strategies can companies use to balance and integrate both physical and organizational resources to facilitate a successful Digital Servitization transition?

Balancing and integrating physical and organizational resources is essential for a successful Digital Servitization transition. In fact, the process requires the combination of tangible assets, such as IIoT sensors and cloud systems, and organizational resources, including skilled teams and knowledge. For instance, Gamma, the company analyzed, exemplifies this approach by leveraging partnerships to access technological resources while activating internal training programs.

Therefore, an effective strategy to manage the interdependence of physical and organizational resources is to establish collaboration with key local actors, such as universities, to acquire new knowledge and competencies and technology providers to develop advanced digital solutions. Once resources have been accessed and acquired – thanks to external partners – their successful integration also relies on effectively internalizing them and rethinking the service structure accordingly to ensure that resources are spread and distributed effectively within the organization.

How should managers prioritize and manage interrelated activities to address digital and service requirements within their Digital Servitization initiatives?

Effective Digital Servitization activity management requires an iterative, collaborative, and decision-focused approach, as shown by the Gamma case. Complementing the activity structure with new initiatives to resolve emerging issues in the DS process demonstrated a valid approach for Gamma. Indeed, after the launch of the DS strategy, the firm introduced new activities to solve internal and external resistances, adapt to local needs, reinforce the firm’s capabilities, and train foreign branches and dealers.

Effective activity management also involves creating intra- and inter-organizational synergies. Gamma co-designed activities aligned with service demands and technological complexities by engaging external partners like consultancies and universities. Finally, prioritizing strategic decision-making ensures efficient resource allocation and workflow optimization, crucial for managing digital servitization complexities.

Copertina: Image by Gerd Altmann from Pixabay