Professor Of Industrial Marketing at Linköping University, Dr. Christian Kowalkowski outlines how two of the biggest trends amongst manufacturers, digitalization and servitization, are in essence two sides of the same coin and why digitalization requires more, not less, service and customer centricity than ever before.

Digital servitization, then as simply explained on the figure above, refers to the utilization of digital technologies for the transformation whereby a company shifts from a product-centric to a service-centric business model.

Today, digitalization is the poster boy for business transformation. Given the rapid pace of innovation, it may be tempting to launch new concepts as soon as the technology is available, rather than waiting until the they have been properly piloted and customer insights gained. To reap the benefits, firms also need to understand the interplay between back end and front end, investing in both back-end development for enhanced efficiency and better-informed decision-making, and front-end initiatives to enable new services and closer customer integration.

Correctly designed and implemented, digital servitization provides benefits for companies, networks, and society at large. Successfully seizing digital opportunities, however, requires more, not less, service and customer centricity than before.

References:

What is digital servitization? Field Service News. 2019.

Skylar, A., et al. Organizing for digital servitization: a service ecosystem perspective. Journal of Business Research. 2019.

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