Transformational shifts through digital servitization

TLDR

Manufacturers increasingly pursue digitalization to drive service growth, yet success is uncertain as many firms overemphasize technology and the link between digitalization and servitization remains under‑investigated. Using a discovery‑oriented, theories‑in‑use approach, the study examines the strategic organizational shifts underpinning digital servitization. Depth interviews revealed that achieving digital service‑led growth requires three interconnected shifts—planning to discovery, scarcity to abundance, hierarchy to partnership—alongside organizational identity, dematerialization, and collaboration, and the study outlines a comprehensive set of strategic change initiatives for managers.

Abstract

Manufacturers increasingly look to digitalization to drive service growth. However, success is far from guaranteed, and many firms focus too much on technology. Adopting a discovery-oriented, theories-in-use approach, this study examines the strategic organizational shifts that underpin digital servitization. Notwithstanding strong managerial and academic interest, this link between digitalization and servitization is still under-investigated. Depth interviews with senior executives and managers from a global market leader revealed that to achieve digital service-led growth, a firm and its network need to make three interconnected shifts: (1) from planning to discovery, (2) from scarcity to abundance, and (3) from hierarchy to partnership. Organizational identity, dematerialization, and collaboration play a key role in this transformation. For managers, the study identifies a comprehensive set of strategic change initiatives needed to ensure successful digital servitization.