Organizing for digital servitization: A service ecosystem perspective

TLDR

Harnessing digital technology is increasingly important as product firms shift toward service‑led growth. The study adopts a service ecosystem perspective to analyze interfirm and intrafirm change processes as firms pursue digital servitization. Authors conduct in‑depth interviews with 44 managers from two multinational industry leaders to examine organizational change processes. The study reveals that the two firms differ markedly in digital service‑led growth and ecosystem activities, and that within‑firm centralization and integration are critical for digital servitization, underscoring the need for managers to promote service‑centricity to fully exploit digitalization.

Abstract

Harnessing digital technology is of increasing concern as product firms organize for service-led growth. Adopting a service ecosystem perspective, we analyze interfirm and intrafirm change processes taking place as firms pursue digital servitization. The study draws on in-depth interviews with 44 managers involved in organizing activities in two multinational industry leaders. Our findings identify major differences between the two focal firms in terms of digital service-led growth and associated ecosystem-related activities. The study disentangles underlying processes of organizational change in the ecosystem and suggests that within-firm centralization and integration play a key role in the capacity to organize for digital servitization. For managers, the findings highlight the need to foster service-centricity in order to take full advantage of digitalization beyond purely technological benefits.