Capturing and enhancing provider value in
product-service systems throughout the lifecycle:
A systematic approach
Johannes Matschewsky, Mattias Lindahl and Tomohiko Sakao
The self-archived postprint version of this journal article is available at Linköping
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Matschewsky, J., Lindahl, M., Sakao, T., (2018), Capturing and enhancing provider value in product-service systems throughout the lifecycle: A systematic approach, CIRP - Journal of Manufacturing
Science and Technology. https://doi.org/10.1016/j.cirpj.2018.08.006
Original publication available at:
https://doi.org/10.1016/j.cirpj.2018.08.006
Copyright: Elsevier
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Capturing and enhancing provider value in product-service
systems throughout the lifecycle: A systematic approach
Johannes Matschewskya,*, Mattias Lindahla, Tomohiko Sakaoa
a Environmental Technology and Management, Department of Management and Engineering, Linköping University, SE-581 83
Linköping, Sweden,
*Corresponding author, Email: Johannes.Matschewsky@liu.se, Tel.: +46 (0) 13 28 1635
Abstract
Although the transition from product seller to product-service system (PSS) provider implies fundamental changes in both value creation for customers and value capture by the provider, prior research has largely focused on the investigation and enhancement of customer value through PSSs. In contrast, a discussion of the changes in how providers attain value and support to enhance this in industrial practice is lacking at this time. This article presents a systematic, empirically-based approach to analyze and enhance PSS providers’ value capture throughout the lifecycle. This is achieved by two methods: provider value analysis (PVA) facilitates a structured assessment of the value capture during the provision of PSSs in the use phase of the lifecycle, while provider value evaluation (ProVa) operationalizes the results of this analysis in the design phase to facilitate an improved value capture in the coming iteration. As the approach was developed in close collaboration with a large-scale PSS provider, the article further reports the results of its application in a case study spanning two years. As a result of using PVA, value dimensions of broad relevance for PSS providers are presented, supported by findings of applying the method at an additional PSS provider. Through the approach presented and case study results attained, the article points out how the design and management of a PSS, focusing on the provider’s value and available benefits throughout the lifecycle, can be enhanced in industry, while extending the academic body of knowledge on the value capture of PSS providers and its implications for PSS design and provision.
Keywords: Servitization; PSS design; PSS evaluation; PSS value; Provider value; PSS implementation; PSS management
1. Introduction
Industrial companies with a background in the design and production of physical goods are increasingly moving towards integrating services with their products into product-service systems (PSSs), and are therefore extending their value creation and capture to lifecycle stages beyond their traditional realm (Cavalieri and Pezzotta, 2012; O’Brien, 2013). They become PSS providers rather than product sellers, remaining closely tied to the offering throughout the lifecycle. Prior research has shown that providers often go about implementing PSSs in an unstructured fashion, leading to challenges with respect to the design and provision of PSSs (Martinez et al., 2010; Matschewsky et al., 2017).
In response to the inherent challenges of PSSs, which by the nature of their long-term contracts and their novelty incur substantial uncertainty (Erkoyuncu et al., 2011; Geng and Chu, 2012), researchers have turned to the value concept to structure design approaches and provide new ways of measuring the viability and expected success of such offerings (Bertoni et al., 2016, 2013; Kimita et al., 2009a; Sakao and Lindahl, 2012). In focusing on value, customer demands and needs are typically central, while the provider’s own value capture may take a less prominent position (Matschewsky et al., 2015b; Pezzotta et al., 2014). However, opportunities to capture multidimensional provider value throughout the lifecycle, for example as a result of the close relationship with customers and through the information gathered about the operation of the offering during the use phase, must be enabled and facilitated already in the design phase (Rondini et al., 2017). In addition, ensuring a high value capture for providers of PSSs may be critical to increase their efficiency in terms of physical and other resources (Bertoni et al., 2017; Matschewsky et al., 2015b). As the knowledge on the classification of value metrics for PSSs expands (Bertoni et al., 2017), applying such metrics and implementing their results to improve value creation and capture throughout the lifecycle of PSSs remains a challenge.
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In order to support industrial actors in the implementation and provision of highly efficient PSSs and to further close the gap regarding methodical support to address provider value, this article presents a systematic, empirically-based approach and tool aimed at enhancing the provider’s value capture and towards an improved implementation, design and management of PSSs throughout the lifecycle. To this end, two methods, working hand in hand, are reported: On the one hand, the provider value
analysis (PVA, applied while under development to attain the results presented in Matschewsky et al.,
2016) method enables the collection of key provider-centric value dimensions from practitioners in the use phase of the PSS lifecycle. This aims to support the structured gathering of data about the offering right where it is generated, with practitioners engaged in the actual provision of PSSs. On the other hand, the provider value evaluation method (ProVa, introduced in an earlier version in
Matschewsky et al., 2015b), presented in a version adapted to the needs of a case company, guides the application of the identified value dimensions in the design phase. Through this, the lessons learned in the use phase of the lifecycle can be applied to achieve an improved offering, commencing an iterative improvement through the lifecycle. Therefore, by way of a combination of two methods, applied in different phases of the PSS lifecycle, the value attainable for PSS providers can be both
understood (PVA) and enhanced (ProVa) in a rigorous fashion.
A second contribution lies in the application of the proposed approach, and the results attained. An extensive case study spanning a total of two years at Arantius1 is reported, resulting in a set of
broadly applicable value dimensions to be used by PSS providers. Diverging results of an additional application of the PVA method at Ericsson (reported in Matschewsky et al., 2016) are also included to give the reader broader insight into provider value in an additional company. The value dimensions attained at Arantius were then reviewed by 12 practitioners at the same company for their relevance depending on the business model employed in order to ensure their applicability in the design and provision of PSS.
2. Background
2.1 Value and PSS design
2.1.1 The concept of value the context of PSSs
The value concept has been of central importance in the literature on PSSs and PSS design (Meier et al., 2010; Mont, 2002), while drawing inspiration from the fields of marketing (Ulaga and Chacour, 2001; Zeithaml, 1988) and relationship management. In this field, particularly the work on the service-dominant logic (Vargo and Lusch, 2004) has been influential, which was followed up by research investigating the change from product to service dominance in different nuances (see, e.g., Grönroos and Ravald, 2011; Payne et al., 2007). A critical point for the research presented here is the value creation benefitting the customer in contrast to the value captured by the provider. Whereas in a product sales scenario, value to the provider was created at the time of the sale (value in exchange), under the premise of service dominance, value creation for PSS providers occurs throughout the lifecycle, encompassing all activities of customer and provider (Grönroos and Voima, 2013).
2.1.2 Value assessment for PSS
Value assessments in PSSs have been the topic of substantial prior research. Here, particularly the work of M. and A. Bertoni and colleagues has been influential (see, e.g., Bertoni et al., 2016, 2015, 2017). Therefore, the prior work introduced here is based in part on literature studies as well as a selection from the comprehensive account of value assessment metrics for PSSs presented in Bertoni et al. (2017). The approaches presented were chosen to maintain a high relatability between prior research and the provider value-focused approach presented here.
In introducing the discipline of Service Engineering, Sakao and Shimomura (2007) provide a design method which includes an identification of customer value.. Embedded in a software-based support
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tool, the value for a prospective customer is modelled in detail, allowing the user to make a fine-tuned adjustment to the design while taking into account a large number of parameters for the state of the customer in response to interaction with the service. Alix et al. (2009) conducted an investigation into the assessment of value for PSSs based on value analysis as introduced by Miles (1971). Although in this work, services are identified as an “adjunction” to product-based offerings, the authors
provide a deep look into value as a function/cost relation from both the provider and the customer point of view. The proposed value matrix provides tangible insight for the prospective user to identify promising PSS concepts, while in this, the singular aspect of financial profit is the critical aspect from the provider view. In Kimita et al. (2009a), the authors aim to establish a relationship between the quality of a service offering and the customer value created by this, enabling designers to estimate an optimal level of quality based on both “immediate requirements as well as the needs that arise as a result of the service receipt”. In a related approach, again concentrating on customer value, Kimita et al. (2009b) investigate the impact of PSS use on the customer and aim to estimate customer
satisfaction. This is done in order to support PSS designers in the conceptual design stage and to establish an actual link between customer satisfaction and the inclusion of certain features in the offering. Bertoni et al. (2011) presented an approach for tackling the value of radical PSS design alternatives in the early stages of design. A framework considering six high-level criteria is presented to support explorative design and to enable interaction and co-design between different actors. Focusing closely on the aspect of customer value, Sakao and Lindahl (2012) provide a step-wise method to support the assessment of the customer value of PSS offerings by evaluating pre-defined PSS characteristics against PSS components on a per-component basis. In anchoring a customer value visualization tool in existing CAD software, Bertoni et al. (2013) provide a clear indication for
designers in their accustomed work environment with regards to the expected value of PSS components. This way, requirements are complemented with value-centric information to enable better-informed decision-making. Kim et al. (2016) take a comprehensive approach to PSS
evaluation: They establish key value criteria as profitability, planet, people, quality and cost. These are assessed based on the perspectives sustainability (representing the provider view) and customer value and backed by an extensive list of categories. As a result of applying the method, the user achieves a comprehensive overview of the value generation of the PSS being designed. Rondini et al. (2017) provide a method based on importance-performance analysis in order to allow PSS designers to assess different concepts for the level of value-added they provide for both providers and
customers. Through a structured process, high value-adding concepts are identified, adjusted and once again evaluated to ensure the PSS designer has a comprehensive understanding of the value attainable through the respective design concepts before moving forward in the design process.
2.1.3 Prior investigations into particularities of provider value for PSSs
Overall, while customer-centric aspects of value creation in PSSs and their enhancement through PSS design are broadly researched, the multidimensionality of the benefits attainable by providers of PSSs is a road much less travelled at this point. Some prior research, however, discussed the aspect of provider value in a more detailed fashion: Yoon et al. (2012) introduced a novel approach for PSS evaluation. In this, both the customer and provider side and their interaction are taken into account in the evaluation of an entirely new PSS. With respect to providers, aspects such as economic and political feasibility are taken into account. In part focusing on integrated offerings, Ueda et al. (2009) propose a value model in the production realm, arguing that value is co-created with bi-directional communication between the provider and the customer. Pezzotta et al. (2014) have also investigated provider and customer benefit, focusing on the balance of efficiency of service delivery and the value experienced by the customer. Yang (2009) introduced a number of performance measurements for PSSs from different perspectives, some of which are relevant for the value assessment for providers. Additionally, Xing et al. (2013) consider the value concept from a customer and supplier perspective: As there is a strong product focus, the main use-scenario for this is seen in product-oriented PSSs. Rondini et al. (2016) presented a heuristic process that similarly mentions “company value” as an important aspect in the decision-making process towards implementing a novel PSS, though largely driven by customer-centric considerations. Recently, the topic of provider and customer value and
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endeavors to balance the two have gained traction in the field through a literature review of existing value metrics concentrating on both customers and providers (Bertoni et al., 2017) and an integrative method aiming to tackle both sides of the value coin simultaneously (Rondini et al., 2017).
2.2 The sales-PSS transition from industrial companies to PSS
providers
The main addressee of research on PSS design are industrial companies (see, e.g., Pezzotta et al., 2016; Tan et al., 2010), i.e., companies with a heritage in product design starting to offer value-added services or moving towards PSSs. These companies often experience substantial challenges in the transition to PSSs, particularly with the alignment of internal processes and implementing a product-service culture (Martinez et al., 2010) as well as ensuring the sustainability of the new offerings (Durugbo, 2013). Kowalkowski et al. (2015) have proposed a complementary concept to the notion of companies becoming providers of PSSs over time (commonly referred to as service transformation or servitization): Instead, a PSS provider may remain a seller of products. These findings are reflected by Matschewsky et al. (2017) through the identification of key challenges experienced by industrial companies, which also point towards the potential of academically conceived support methods to identify and exploit viable improvement opportunities. The importance of resolving these challenges and the impact of the sales-PSS transition on a provider’s value capture is highlighted hereafter.
3. Multidimensional value available to PSS providers
In order to structure the research on value captured by PSS providers, an approach departing from existing research on PSSs and value was developed. The conceptual background to this research approach concerns the value creation and capture in the lifecycle of PSS offerings. Figure 1
synthesizes this understanding as follows: In cases of product sales, the main value for the provider is created at the point of sale, through value in exchange (Grönroos and Voima, 2013). Customer value is subsequently experienced by the customer through value in use, at times supported by service activities of the provider. According to this logic, a concentration of the design efforts on monetary value as the main value in exchange captured at the time of sale is a reasonable approach and is practiced by companies, for example, through efforts to decrease manufacturing costs.
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Figure 1 - Contrast between value creation in product sales and PSS offerings (provider activities given are examples)
As providers now begin a transition towards offering PSSs, the situation is changed in a fundamental way: Instead of a focused value in exchange at the time of sale (and thus change of ownership), the opportunities to capture different kinds of value through the provider are dispersed throughout the lifecycle. This is particularly true in cases of result-oriented and some availability/use-oriented PSSs (Meier et al., 2010; Tukker, 2004), as the PSS provider here remains in ownership of the offering. This value includes information and data, close ties to customers and improved efficiency (see Bertoni et al., 2017; Matschewsky et al., 2015b). What is more, the value capture opportunities for the provider extend even beyond the first lifetime, by way of remanufacturing (Sundin and Bras, 2005).
Caused by the persisting product sales focus and particularly a lacking adjustment of existing
incentive structures to the design and provision of PSSs and to lifecycle thinking, such considerations are hardly present today in the design processes of industrial companies undergoing the service transition (Martinez et al., 2010; Matschewsky, 2017). As a result, many of the value-capturing
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opportunities exemplified in Figure 1 remain unexploited as PSS providers continue to focus on immediate monetary value as the main performance indicator during the design stage (Matschewsky et al., 2017, pp. 9-10). Clarifying the importance of this change in focus from a monetary value in product sales towards a multidimensional and lifecycle-oriented provider value in PSSs towards practitioners is an important motivation for the approach introduced here.
4. Research approach, method integration through the
lifecycle and case study method
4.1 Assessing and enhancing provider value through the lifecycle
Based on the multidimensional value conception for PSS providers, the following approach for both the research and the application of the methods emerged during the field work: Data must be gathered during the use phase of the PSS offering to gain an understanding for the multidimensional value capture of PSS providers in contrast to product sellers. In Figure 1, this is represented by the “PSS Lifetime”. A main outcome of this Stage I of the research and the application of the PVA method are value dimensions that help practitioners to identify key areas to focus on in PSS design and provision and can serve as key performance indicators (KPIs) in contrast to the existing, product sales-centric modes of measuring performance. In the industry-centric research focusing on Stage I, PVA-supported data-gathering sessions were held with individual practitioners at both Arantius and Ericsson. The value dimensions collected are then evaluated by practitioners in the design phase for their usability and subsequently operationalized in Stage II through ProVa, a structured evaluation method conceived for easy implementability into the existing, product-centric processes. During the case work conducted with Arantius, the viability of the ProVa method to carry out this task as well as the relevance of the identified provider value dimensions was assessed.
Figure 2 aims to clarify the connection between the two main steps of the research process and the use of the methods in practice.
Figure 2 - Two stages of the research visualized with respect to the lifecycle phases of PSS offerings
To further clarify the research approach, Table 1 shows the objectives, respondents, and methods applied in both stages of the research.
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Table 1 - Applied research approach with information on the research objective, methods used, and respondents involved. Assessment
Stage Objective Methods Individual Respondents
Stage I
• Understand value capture for current PSS offerings • Identify value
dimensions/ possible KPIs for the PSS Design stage Provider Value Analysis (PVA) Arantius Ericsson • Sales Managers (2) • Sales Representatives (2) • Service Technician • Service Coordinator • Service Leader • Senior Researcher • Product Owner • Site Manager • Manager Service Sales • Sales Development Manager • Technology and Development Manager • ICT Coordinator Infrastructure and Delivery • Research Director • Sales Development • Product Manager Stage II • Evaluate the relevance and usability of the identified information • Operationalize
the new value dimensions for use in PSS design process Provider Value Evaluation (ProVa) Arantius • R&D Leader
• Key Manager Design • Project Manager • Technology Developer
• Business Development Manager • Project Buyer
• Design Group Leader • Quality Engineer
• Development Project Leader • Head of Customized Design • Project Leader Product Data • Head of Product Optimization
4.2 Case study methodology and case companies
In order to examine the usefulness and applicability of the presented methods to enhance the value capture throughout the PSS lifecycle, the case study method was used (Yin, 2013). As the systematic understanding and enhancement of the value captured by PSS providers throughout the lifecycle have not been previously investigated, an exploratory approach was chosen (Yin, 2013).
To support the generalizability of the results of the study, great care was taken in describing the method and research process (Flick, 2009). Further, in comparison to prior studies by other researchers, Arantius and Ericsson can be seen as representative of large companies offering both PSSs and product sales (cf. studies in Martinez et al., 2010; Pezzotta et al., 2016). Naturally, the results of this case study cannot be transferred one-to-one to other companies; however, they can inform and support the PSS design process adaptation and the application of the methods introduced in practice. Below, the case companies are presented.
Arantius is a supplier of industrial equipment for customers worldwide and began its journey
towards offering PSSs more than two decades ago. Today, availability/use-oriented PSSs represent a substantial portion of Arantius’ revenue, and Arantius is now preparing to offer result-oriented PSSs in the future. With its PSS offerings, Arantius also conducts remanufacturing, while remanufactured units are largely utilized for short-term PSS contracts in their second and following lives.
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Ericsson has been a key actor in the field of information communication technologies (ICT) for over
140 years. While traditionally focused on developing and selling products, in the past decades, Ericsson has begun to increasingly focus on services. As of Ericsson’s 2014 annual report, over 40% of the annual revenue stems from service provision. Regardless of this transformation, at its core, Ericsson remains a product-focused company and has only recently begun moving towards an integration of the development of products and services, particularly due to the introduction of new technologies, digitalization and changes in the market.
5. Structured methods to identify and enhance provider value
in PSS offerings
In this section, the methods used in the case study presented thereafter are introduced in-depth. Through the detailed description, the aim is to facilitate the application of the methods for the verification of the attained results by researchers as well as to permit use by practitioners.
5.1 Use phase-driven value analysis for PSS Providers – The PVA
method
5.1.1 Method principle and approach
PVA is a support method enabling the collection of provider-centric value dimensions in the use phase of PSSs, thus capturing key information on the value created and captured by PSS providers. This method was initially conceived to simplify the data gathering in the course of the project at case company Arantius and to reduce the inherent challenges of qualitative data gathering through semi-structured interviews as remarked in Miles et al. (2013), e.g., their documentation and discussion. Subsequently, the same approach was applied in a study at Ericsson (see Matschewsky et al., 2016). As PSS providers are often focused on customer value (Kimita et al., 2009a; Sakao and Shimomura, 2007), the method takes its point of departure in this to facilitate the practitioners’ understanding. Thus, insight into the aspect of customer value can also be provided as a result of applying PVA. Further, with the aim of enabling concrete and applicable results, the value dimensions are identified directly in relation to physical PSS components or service activities of the provider. This has, as identified during Stage I of the research, led to a reduced level of abstraction when gathering data and an increased likelihood of attaining practically applicable information with high usefulness for the design stage as compared to a semi-structured interview only supported by an interview guide. An important capability of the PVA method lies further in the comparison of product sales and PSSs with respect to value. As providers often offer both types of offerings (Kowalkowski et al., 2015), particularly when just becoming a PSS provider, understanding the differences in value generation and capture can be key to overcoming critical challenges as described in Matschewsky et al. (2017), particularly where issues of incentive structure and a continued product-centered mindset are concerned (see Section 3). As comparing product sales and PSSs was a key aspect required by Arantius, it is included in this method, although the user can omit this if this comparison is not needed.
The PVA method was used to gather the data presented in Section 6, which is exclusively focused on the aspect of provider value.
5.1.2 Structure of the PVA method
The following steps are carried out to identify value dimensions for PSS providers. Figure 3 shows the data-gathering sheet designed to facilitate the traceable collection of information as the method’s steps are carried out.
1. The respondent is asked to elaborate on how customer value is created and how the provider attains value through PSS offerings in connection to her/his daily work. As the respondent elaborates, the interviewer(s) take(s) notes and at times ask(s) follow-up questions.
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2. The most interesting and relevant aspects that were collected are selected by the respondent in Step 2. These then constitute the value dimensions.
3. The respondent is asked to rate the importance of each of the items mentioned separately for aspects relevant to customer and provider value on the levels of high, medium and low. This is done separately for both product sales and PSS offerings. Whether differences between product sales and PSSs can be analyzed depends on the offerings provided by the company investigated.
4. In order to support future efforts in a component-oriented evaluation and to achieve tangible results, the respondent is asked to name physical components or activities/services that generally contribute to the generation of the value identified in Steps 1 and 2.
5. To understand the impact of the components and activities/services identified in Step 4 on the values found in Step 2, the respondent is asked to evaluate this impact on the following scale: does not apply (no connection between value and components/activities/services), positive (component/activity/service contributes positively to value), neutral (no impact on value), or negative (decreases the value).
6. For each of the physical components or activities/services, an overall assessment is carried out, and the most important value dimension is selected by the respondent, both with respect to customer and provider value.
Figure 3 - Data-gathering document for the Provider Value Analysis method. The numbers indicate the steps as described in Section 5.1.2, while “Value Dimension” and “Provider’s Activity…” are placeholders for the input of the practitioner.
5.1.3 The use of value dimensions in the design phase
As a result of using the PVA method, depending on the number of total respondents, a large number of value dimensions, together with the respective connections to physical components or services, are identified. Through this, a prioritization with respect to the type of evaluation carried out in the design phase is possible, i.e., a certain set of value dimensions may be more relevant for physical components of PSS offerings, while others may be of higher importance for services or activities. Additionally, based on the number of value dimensions attained as a result of applying PVA, critical dimensions can be directly selected to move forward with an evaluation using ProVa in the design phase of a PSS offering.
Clustering was performed to arrive at a more broadly applicable and relevant set of value dimensions from an academic point of view. However, such a clustering effort may not only be of use in order to arrive at value dimensions going beyond the scope of the PSS provider applying the approach; it may also lead to value dimensions that, though they naturally become broader and less sharp, are easier to understand and apply by users in the design phase of a PSS offering as well as facilitate a cross-departmental discussion based on them.
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In the clustering, similarities among the responses of the interviewees were identified, and the respective value dimensions were subsequently assembled into overarching categories. To this end, a clustering approach as described by Miles et al. (2013) was applied, based on open coding and using analyst terms (Glaser and Strauss, 2009; Strauss and Corbin, 1998): the interviewers’ notes, data gathering sheet and respective parts of the interview recordings were revisited. All of the mentioned value dimensions were laid out on paper. As a first step, identical or near-identical mentions were clustered and unified under the most general dimension. Subsequently, semantically or contextually related items were marked and connected. Lastly, the assembled clusters were noted and headings describing the content identified. Additionally, the clustered results were reviewed and verified by practitioners.
As a result, broad knowledge on the key dimensions of the value capture is identified. This knowledge can be used to enhance the value capture through PSS offerings by way of dedicated approaches in the design stage and is further intended to motivate and justify the efforts of implementing PSS design and provision with a true lifecycle perspective.
5.2 Value assessment in PSS design – The ProVa method
5.2.1 Method principle and approach
After identifying relevant value dimensions and therefore possible KPIs in the use phase of PSS offerings, the question remains of how these can be utilized in an efficient fashion during the design process. To this end, the Provider Value Evaluation (ProVa) has been developed.
The initial conception of ProVa was based on the hypothesis that through the extended lifecycle of PSS offerings and value capture being dispersed over this period (see Section 3), a multidimensional approach to assessing the value attained by PSS providers is needed (Matschewsky et al., 2015b). The method relies on a step-wise approach that assesses physical components and services available to be included in PSS offerings against a set of value dimensions. These dimensions were initially based solely on the literature, which may be insufficient for providers keen on enhancing their value capture from PSS offerings. By first applying PVA to an existing PSS offering in the use phase of the lifecycle, tailor-made evaluation categories to be used as “Provider Value Dimensions” in ProVa can be identified, likely leading to a more relevant and goal-oriented assessment. Additionally, using the empirically grounded dimensions presented here based on studies with two companies can be a middle ground if no full PVA application on an existing PSS is possible or desired. The applicability of these results, however, may vary depending on the similarity of the case companies involved in this work and the practitioners’ own company.
5.2.2 Structure of the ProVa method
Figure 4 displays the steps of the method in a concise overview. When used in the design process, the method benefits from an iterative application, including lessons learned and applying sensitivity analyses in order to identify the critical value dimensions for certain components and functions.
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Figure 4 - Evaluation process of the ProVa method (based on Matschewsky et al., 2015b).
The updated ProVa method is carried out through the following steps:
1. Gathering components
Depending on the focus of the assessment, the available product and service components must be identified. Ideally, this should be done based on product data management or previous designs. Further, an optimization goal must be defined. In Figure 4, achieving a certain customer value exemplifies this target.
2. Scoring of components with respect to value dimensions
Using the value dimensions provided or acquired as a result of using the PVA method, the components collected are scored. Depending on the level of detail required, different options can be chosen here:
• A 0-10 scale with explanations introduced in Matschewsky et al. (2015b) • High-medium-low value benefits originating from the component • A 5-point Likert scale
3. Uncertainty assessment
There is a danger of over-interpreting the reliability of a semi-quantitative assessment, such as the one performed through ProVa. Therefore, managing (assessing and reducing) the uncertainty involved in this evaluation is necessary. Different options are available to carry out this assessment:
• One based on a pedigree-matrix as shown in Matschewsky et al. (2015). Although detailed and informative, this approach adds three further assessments to each pair of component and value dimension.
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o (+) Well-informed assessment. Previous experience with a component in the same or similar offering. Actual data is present to support the assessment, even if coming from external sources.
o (0) Informed assessment. Little prior knowledge is available, or knowledge stems only from product-type deployments.
o (–) Guesstimate. New component that has not been deployed in a PSS offering. Evaluation is not based on data, experience or previous use.
4. Estimation of monetary value
The assessment of the monetary value of product and service components in the ProVa method is directed at small companies aiming to become PSS providers. As detailed in Matschewsky et al. (2015), this assessment of the lifecycle-focused monetary value relies on experience curve effects (for service components) and economies of scale (for product components). In the presented case, due to the size and complexity of the case company Arantius, this step was not needed.
5. Component evaluation
Different components can now be evaluated for their prospective value to the provider throughout the lifecycle of a PSS. Depending on the focus chosen, it can be worthwhile to include a weighting, which sets the different value dimensions in relation to each other. Depending on the way the first steps were carried out, there are up to three dimensions to the final evaluation:
a. Weighted sums or individual assessments per value dimension
If weighted sums are to be used meaningfully, all value dimensions must be used for each component. Thus, the sum product of the weightings w = (w1,…, wn) and the
scores per value dimension s = (s1,…,sn) are to be calculated, while si and wi refer to
the ith dimension of value, respectively, and while the sum of all weightings is defined to be 1 and the average weighting therefore 1/wn. Thus, the weighted sum is
calculated as Σ=w1●s1+w2●s2+…+wn●sn. If no weightings are applied, either
individual or average scores can be evaluated.
b. Uncertainty assessment (if applicable)
The per-component uncertainty assessment must be taken into account when comparing the evaluations of different components. This is particularly relevant if scoring and the final assessment are carried out by different individuals or groups.
c. Monetary value (if applicable)
In order to facilitate, simplify and structure the method use and to increase its implementability into the existing design process, a paper-based document has been developed, shown in Figure 5. As this document was used at Arantius, the assessment of monetary value is omitted here.
Figure 5 – Streamlined ProVa assessment document used in the case study. “Value Dimension” and “Product/Service Component” are placeholders for the results of PVA or direct practitioner input.
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6. Capturing and enhancing provider benefits – the cases of
Arantius and Ericsson
In accordance with the approach presented in Section 4, the analysis and enhancement of the value attained by Arantius through its PSS offerings have been assessed in a case study over a period of two years. To increase the comprehensiveness of the presented value dimensions, diverging results of the application of the PVA method at Ericsson as reported in Matschewsky et al. (2016) are presented.
6.1 Identification of Key Value-KPIs in the use phase of PSSs at
Arantius
6.1.1 Lifecycle-oriented value for PSSs in contrast to product sales
In an effort to identify key indicators in the value capture throughout the life of Arantius’ PSS offerings, the PVA method was applied in a total of seven sessions with practitioners in the fields of sales and service. Due to confidentiality requirements of the case company, the components
mentioned by the respondents as well as exact component-value relationships cannot be disclosed. When developing the PVA method and commencing the provider value project with Arantius, the goal specified by Arantius was to also attain information on the differences in the value capture depending on a product sales or PSS business model, as also shown in the description of PVA (see Section 5.1). As the data gathering was driven by a lifecycle focus and carried out with practitioners in sales and particularly service, the empirical data resulted in a comparison of product-oriented PSSs2 and
availability/use-oriented PSSs3 at Arantius. Thus, a substantial overlap in the value capture for
Arantius was found. Therefore, the results with respect to the provider-focused value captured through the PSS components presented here focus on the availability-oriented PSSs.
6.1.2 Value dimensions identified by sales and service professionals at Arantius
In contrast to the existing singular focus on economic value for Arantius prevalent when designing and providing PSSs, a range of value dimensions was identified in connection to components of PSS offerings. In order to provide an overview, the value dimensions are shown separately for sales and service personnel in Table 2 and Table 3. Column 1 shows the value dimension as identified by the respondent. In Column 2, the general importance of the value dimension for Arantius’availability/use-oriented PSS offerings is shown. Column 3 shows the type of value impact the respective value dimension had on the PSS components, while Column 4 shows how many times (i.e., to how many different PSS components) that impact was assigned (cf. Figure 3, Section 5.1.2).
Table 2 - Value dimensions identified by sales personnel, overall importance of value dimension for Arantius’ PSS offerings, impact of value dimension in relation to the PSS components and number of times this impact was assigned.
2 In the Arantius-case, this means that the physical offering is sold to the customer, but the customer also
signs a service contract with Arantius to ensure the maintenance and proper functionality of the offering.
3 In this case, Arantius remains in ownership of the physical offering and guarantees a certain level of
availability to the customer at all times for the length of the contract. The customer then operates the offering and pays a predefined and constant monthly fee. At the end of the contract, Arantius takes back the physical offering to be remanufactured and provided for short-term PSS contracts.
Sales Personnel Value Dimension Importance for provider value capture in PSS Value impact in relation to component in PSS offering No. of value component relationships assigned
Financing High Positive 4
Freedom (Risk Sharing, etc.) High Positive 3
Economy (Monetary Value) Medium Positive 6
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Ergonomics Medium/ Low Positive 1
Safety High Positive 4
Long-Term Thinking High Positive Neutral 12 2
Innovativeness High Positive Neutral 2 2
Information High Positive Neutral 2 2
Experience/ Knowledge High
Customer Specifications High Positive 2
Customization High Positive Neutral 2 2
Capacity High Positive Neutral 9 2
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Table 3 - Value dimensions identified by service personnel, overall importance of value dimension for Arantius’ PSS offerings, impact of value dimension in relation to the PSS components and number of times this impact was assigned.
6.1.3 Clustered value dimensions identified in the Arantius case study
The value dimensions identified showcase the broadness of how the lifecycle-oriented value attained by Arantius is composed. However, in order to increase the applicability of a broader understanding of the value captured by PSS providers, these must be brought to a higher, more general level. Further, through this, the goal is to provide an overall understanding of PSS providers’ value capturing that goes beyond the case company Arantius. To this end, the value dimensions were clustered as described in Section 5.1.3. This clustering may not be necessary for an industrial application if the identified value dimensions lend themselves to direct use in the design phase within the ProVa method.
These value dimensions are neither self-evident nor universal – they are, however, of relevance in relation to prior research in PSSs. Therefore, the clustered value dimensions are supported with references from the field of PSSs in order to underline and support their applicability for PSS providers in general.
The Clustered Value Dimension: Long-Term Thinking – This cluster contains the items Long-Term
Thinking, Security and Continuity and Environment, which were mentioned by a total of four of the seven respondents. Long-Term Thinking was selected as a summative description, as it conveys all of the contained aspects. Long-term relationships between customers and providers that arise though PSSs have been discussed (Baines et al., 2007; Goedkoop et al., 1999; Mont, 2002). The aspect of security and continuity, aimed at building customer trust and confidence, points in the same direction. The environmental aspects, which affect all stakeholders related to a PSS in a narrow or wide sense, are of broad relevance (Tukker, 2015, 2004), and more recently, quantified benefits of PSSs in comparison to product sales were shown (Lindahl et al., 2014). It appears reasonable that
Service Personnel Value Dimension Importance for provider value capture in PSS Value impact in relation to component in PSS offering No. of value component relationships assigned
Cost Forecasting High Negative Positive 5 2 Well-designed product High Positive Neutral 2 2
Security and Continuity High Positive 5
Environment High Positive Neutral 6 3
Increased Competence High Positive 4
Technicians’ Knowledge High Positive Neutral 3 1
Effective Service High Positive 6
Simplified Communication High Positive 5
Higher Availability High Positive 4
Quick Response High Positive Neutral 3 2
Customer Relations High/Medium Positive 4
Backup (Personnel) High Positive 4
Packaged Solution High Negative Positive 4 1
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these long-standing and widely researched aspects of PSSs should have a direct impact on the design of such offerings (see also Sundin et al., 2009).
The Clustered Value Dimension: Customer Relations and Service Excellence – In this cluster,
aspects concerning the strengthening of the ties to customers as well as other aspects improving the perceived customer value are bundled. These include Effective Service, Simplified Communication, Higher Availability, Quick Response, Customer Relations, Customer Specifications, Customization and Personnel Backup. All of these aspects are related to an increased satisfaction of the customer with the performance of the PSS and thus indirectly benefit the provider. PSSs facilitate longer and more intensive relations between customer and provider (Meier et al., 2010), and these have been shown to be a central benefit of a well-implemented PSS (Sakao et al., 2008). An enhancement of these aspects through designated efforts in the design stage is, therefore, a reasonable approach to enhance the value capture.
The Clustered Value Dimension: Knowledge and Information – This value cluster contains the
value dimensions Increased Competence, Technicians’ Knowledge, Information and
Experience/Knowledge. Knowledge attained and information gathered in the use phase of a PSS can be a key source of input to the PSS design process (Meier et al., 2010), if this information is collected and made usable. In the PSS literature, information collected by remote monitoring devices is mentioned (Baines et al., 2007), as large amounts of information can help discover, e.g., fault-patterns, which can be eliminated in a future iteration of the offering. Further, the gathering and use of data are becoming increasingly important for PSS providers (Opresnik and Taisch, 2015). Lastly, particularly with a result-oriented PSS, restricting the access to knowledge about the offering and its operation can increase the dependency of the customer on the provider (Sakao et al., 2013).
The Clustered Value Dimension: Quality – The value cluster Quality contains the aspects Quality
and Well-Designed Product, as mentioned by a total of four respondents. Quality as a key aspect of the value proposition of a PSS is mentioned by a number of researchers (Aurich et al., 2006; Kimita et al., 2009b; Morelli, 2006). Because of the extended responsibility over the entire lifecycle in cases of result-oriented PSSs, Quality has become an aspect that bears substantial value to the provider, ensuring long-term reduction of cost, e.g., through low failure rates and a reduced number of parts exchanges, and therefore also improved environmental performance. Through this, quality is directly coupled to the cluster of Long-Term thinking and the related considerations of resource efficiency.
The Clustered Value Dimension: Brand and Size – The value cluster Brand and Size contains the
value dimensions Capacity, Partnership, Packaged Solution and Freedom (Risk Sharing). All of these items refer to Arantius’ capability of fulfilling the customers’ requirements at any given time and throughout the entire length of the contract. As the market for Arantius’ offerings is dominated by a few large players, maintaining the capacity to meet customer needs is crucial for future market success. Particularly with small/medium-sized companies, the capacity to fulfill customer requirements with respect to services and availability is a key aspect during PSS design.
The Clustered Value Dimension: Monetary Value – This aspect, the most apparent of all aspects of
value to PSS providers, encompasses the elements Financing, Economy and Cost Forecasting. In existing PSS research, the aspect of cost is seen as the key point ensuring both customer and provider attain benefits from this type of offering and a win-win situation is achieved (Maussang et al., 2009). This aspect is central also to the value attained by Arantius and PSS providers in the broadest sense.
6.2 Divergent value dimensions identified through the case study at
Ericsson
After the development of PVA and its use at Arantius, the method was applied at Ericsson in a series sessions with various staff. As the results of this study are reported in detail in Matschewsky et al. (2016), here, only the clustered value dimensions that diverge from those identified at Arantius are presented in order to provide additional breadth to the study. This serves to underline the
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comprehensiveness of the results for the benefit of the practitioners’ intent on performing a value assessment without conducting a full PVA.
The clustered Value Dimension Ownership and Control – As pointed out by the practitioners
interviewed, substantial value lies in the retention of ownership and control over the offering
throughout the lifecycle. An important point in this regard was made by one respondent with respect to the greater chance of prohibiting competitors from accessing confidential information. This also indicates a connection between the topic of ownership and control and offering closed PSSs. In contrast to this, ownership and control also provides the opportunity to constantly improve the user’s experience by updating and upgrading the offering during the use phase.
The clustered value dimension Market Opportunities – In an environment where customers in the
ICT sector require increasingly integrated offerings, practitioners see PSSs as critical to venture into new fields of business as well as to retain the existing customer base.
6.3 Employing the use phase-oriented value dimensions to enhance
value capture through PSS design
6.3.1 Relevance of value dimensions for PSS design
As the first empirical effort of Stage II of the case study at Arantius (see Section 4), the applicability of the identified value dimensions was assessed. This was intended as a first step towards
operationalizing a differentiated understanding of value capture throughout the lifecycle for Arantius. In order to meet this end, the respondents were asked to complete an assessment of each value dimension with respect to its relevance for the design of product sales offerings, current
availability/use-oriented offerings and future result-oriented PSSs that Arantius is developing. Figure 6 shows the assessment form for one value dimension. Arantius practitioners received supporting information based on explanatory statements made by use phase practitioners in sales and service, which are confidential. A five-point Likert scale was chosen to ensure the respondents could easily select one of the available options as they elaborated, and because this type of scale lends itself for further assessments due to the perceived equal distances between the different options (see Traylor, 1983).
Figure 6 - Assessment of relevance of value dimension for design and provision of PSSs (long-term thinking shown in example).
Table 4 shows the aggregated results of all respondents, with the figures signifying the number of times the respective option was chosen on a 5-point Likert scale. As a result, the high relevance of all value dimensions for the PSS design process could be shown, with all average assessments of the novel provider-centric value dimensions at 4.2 or higher on the 5-point scale for availability-oriented and at 4.6 or above for result-oriented PSS offerings. Further, the growing relevance of such a use phase-driven assessment for the design of PSSs was underscored by the highest relevance being assigned in cases where result-oriented PSS were in focus.
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Table 4 - Ranking of clustered value dimensions for relevance in the design process of product sales as well as availability/use-oriented and result-oriented PSSs.
In order to further extend the understanding of relevant value dimensions, the respondents in the Stage II-data gathering were queried for additional input prior to assessing those dimensions collected in Stage I. While the results were predominantly overlapping with the data collected from use phase practitioners, some additional dimensions were identified that may be of relevance in future evaluations:
• A project manager mentioned the importance of Productivity and Flexibility. In the case of component selection, this can be a key aspect to consider with a lifecycle focus.
• A service business developer mentioned the aspect of Reliability, a fundamental issue in Arantius’ PSS offerings, as availability is guaranteed to customers and all disruptions directly affect Arantius’ value capture and environmental performance.
• An R&D leader underlined the importance of Data Gathering, especially with a focus on the future use of the assembled knowledge and the power embedded in this.
6.4 Adapting the PSS design process to enhance value capture
throughout the lifecycle
In continuation of Stage II, the design phase practitioners were presented with the ProVa method and evaluation document (see Section 5.2, Figure 4 and Figure 5) to evaluate the usefulness of such an approach to adapt the existing design processes in an effort to enhance the utilization of the benefits of offering PSSs. This resulted in a total of three use scenarios being discussed.
6.4.1 Assessment of product and service components
The ProVa method for value assessment was initially intended to facilitate the selection of components for increased value capture. As stated by several respondents, there is currently no separation of design for product sales and PSSs, in spite of the substantial differences in incentive
Clustered Dimension Business Model Evaluation Average
Not Highly relevant relevant 1 2 3 4 5 Long-Term Thinking Product sales 2 5 1 1 3.1 Avail./Use-oriented PSS 1 5 3 4.2 Result-oriented PSS 1 8 4.9
Customer Relations and Service Excellence Product sales 1 2 4 3 2.6 Avail./Use-oriented PSS 4 6 4.6 Result-oriented PSS 1 9 4.8 Knowledge and Information Product sales 1 4 3 2 3.6 Avail./Use-oriented PSS 2 3 5 4.3 Result-oriented PSS 1 9 4.8 Quality Product sales 1 3 1 5 4.0 Avail./Use-oriented PSS 1 2 7 4.6 Result-oriented PSS 1 2 7 4.6
Brand and Size
Product sales 1 6 2 1 3.2 Avail./Use-oriented PSS 1 6 4 4.3 Result-oriented PSS 10 5.0 Monetary Value Product sales 1 2 2 4 4.0 Avail./Use-oriented PSS 1 2 6 4.6 Result-oriented PSS 2 7 4.8
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structure as described in Section 3. As an R&D leader remarked: “I think we will at some point stop
selling [our offerings]. Sales will become a niche reserved for entry-level [offerings], while everything else will be [availability/use or result-oriented PSSs].” Thus, an adaptation of existing processes of
designing and selecting physical and service components is needed: “Currently, we aim to balance first
cost and quality. There are always tradeoffs.” To this end, Arantius practitioners saw the ProVa
method, together with the derived value dimensions, as a useful trajectory to broaden the basis upon which components for PSS offerings are selected. A business development manager formulated the opportunities of using the ProVa method like this: “I think this is a good way of working. Most of all for
oneself to think a bit, because it is so easy to make emotional decisions.” Further, respondents with a
strong forward-thinking focus welcomed the ProVa method as a possible facilitator to develop new incentives for the design and provision of PSSs at Arantius.
6.4.2 Assessment of new projects and developments
When being presented with the method in Stage II of the data gathering, a project manager
immediately began filling in the evaluation document with project ideas and scoring them against the identified value dimensions. Thus, a lifecycle and value capture-focused evaluation of prospective projects and research developments is a viable application of the ProVa method and was seen as a useful step towards a more PSS-centered design process. An R&D Leader saw ProVa as useful to track progress in design and provision of PSSs over time: “First, you do a kind of baseline based on this
[method], and map today’s solution, [or] a component, [or] a system, [or] a product or a bigger solution, against a number of these value drivers. And then we challenge ourselves with a goal that we will achieve: We want to improve this.”
6.4.3 Understanding the new offerings
The respondents saw ProVa as a viable approach to communicate the impact a PSS has on the design and provision of Arantius’ offerings and to understand the complexity and the lifecycle reliance of the value capture of the company when offering PSSs. A technology developer put it this way: “That is a
huge chance to educate people. Because you can explain which values are important.” Thus, applying
ProVa in a workshop environment rather than including it in the design process was regarded as a possible initial step to trigger design process adaptation.
7. Concluding discussion
Becoming a PSS provider with the design and provision of fully integrated solutions with a lifecycle focus is a challenging task (Martinez et al., 2010; Zhang and Banerji, 2017). In this respect,
particularly activities such as implementing design processes that integrate product and service design, taking into account the need to adjust incentive structures, and modifying costing approaches as well as organizational structures can be daunting (Matschewsky, 2017; Wolfenstetter et al., 2015). In an effort to meet these challenges, the results presented provide key support to facilitate better-informed decision-making within the design and provision of PSSs by way of a systematic approach to analyze and enhance the attainable value for providers. Further, a broader understanding of a multidimensional provider value in PSSs has been achieved by way of employing the systematic approach in industry.
While the methods presented in this article have in part been discussed in prior conference publications, the research shown here constitutes a substantial departure from earlier work: The ProVa method (introduced initially in Matschewsky et al., 2015b) has been adjusted and made flexible to accommodate the needs of users in industrial practice. The structure of the PVA method (used in an earlier, rudimentary version to attain the results presented in Matschewsky et al., 2016) is described for the first time. Further, particularly the effort of combining the methods to ensure both an understanding and enhancement of the value attainable for PSS providers throughout the lifecycle represents a considerable departure from the state of the art, as does the detailed presentation of the results attained in empirical studies.
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7.1 Understanding and enhancing a PSS provider’s value capture
throughout the lifecycle
In order to support future providers in the implementation and provision of efficient PSS offerings, an approach consisting of two methods, to be used in different stages of the lifecycle, was presented. Through this, a number of key results were achieved.
As a key result, the PVA method provides a clear and structured path to understanding the broadness of the value available to be captured by a PSS provider throughout and beyond the use phase of the offering’s lifecycle. This lessens the focus on monetary value and first cost in PSS costing (Settanni et al., 2015) and facilitates the collection of broader, PSS-centric and provider-focused KPIs to be used in the design stage. This process is further supported by a practical document to gather data in order to facilitate the implementation and continued use of the method in industrial practice (Matschewsky et al., 2015a). In extending the understanding of the multidimensional value available through
providing lifecycle-oriented PSSs, a step towards reaping the broader expected benefits of these offerings is taken (Meier et al., 2010; Tukker, 2015).
As a further key result, the ProVa method presented here in a version adapted to the feedback of the case company Arantius gives PSS providers the opportunity to operationalize the information on provider value collected in the analysis of their current offerings in order to design enhanced versions. This is done by providing a clear receiving infrastructure in the design phase that supports the application of these lessons learned. In this respect, an important result of the work presented is the multitude of ways the ProVa method can be used. Where some practitioners see it as a learning tool for understanding the most important differences between selling products and providing PSSs, others see an opportunity to analyze the status quo, define future targets and track progress in the lifecycle-oriented optimization of product and service components in PSSs.
In summary, as a result, industrial practitioners are provided with tools to both analyze and improve their PSS offerings, leading to a sounder implementation of PSSs in industrial practice, and making better use of the envisaged benefits of PSS offerings.
7.2 Understanding multidimensional provider value in PSSs
On a broader scope, the study conducted has shown that the multidimensional and lifecycle-focused concept of the value attained by PSS providers is a viable approach to convey the advantages of adapting existing, product-centric design processes (cf. Bertoni et al., 2017; Mourtzis et al., 2016). In reflecting upon a number of value assessment approaches previously introduced, some key aspects become clear: While many of the methods presented explicitly focus on the early and conceptual stages of PSS design (Alix et al., 2009; Bertoni et al., 2011; Kimita et al., 2009b; Rondini et al., 2017), the proposed approach can serve as a complement with a stronger focus on detailed design, as shown in the product and service component-centric nature of ProVa. With none of the previously presented methods, a clear improvement structure throughout subsequent design processes becomes apparent. This gap is filled by the proposed approach, as it provides a clear structure for the analysis of value dimensions in the use phase of PSS offerings and the application of these lessons learned in the design phase. Recently, researchers have turned their focus increasingly towards PSS providers’ value capture (Bertoni et al., 2017; Rondini et al., 2017) – showcasing a necessary shift from a traditionally strong customer focus (Kim et al., 2016; Kimita et al., 2009a, 2009b; Sakao and Lindahl, 2012; Sakao and Shimomura, 2007) towards resolving one of the key challenges of successfully designing and providing PSSs (Matschewsky et al., 2017). The work presented here takes this one step further, focusing almost exclusively on the providers’ value capture in order to complement the broad array of existing customer-oriented support with structured aid to assess and enhance value capture from PSSs.
The systematic approach developed has led to reliability in the process and facilitated the communication with top management, a critical factor as remarked by Windahl (2007). To some
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practitioners, particularly in the design phase, the multidimensionality and temporal spread of the benefits attained was nothing new as such – regardless, they previously lacked a structured way of communicating on these matters.
With the deeper understanding of the multidimensional value capture mechanisms in PSSs, the results presented add an incentive to invest in adaptations to the existing design and provision processes in order to operationalize the changes in value capture and creation identified (Grönroos and Voima, 2013; Vargo and Lusch, 2004). The concept of the value to be captured by providers in the use phase of the PSS offering can serve as a basis for such discussions.
The provider value dimensions identified through the PVA method and verified with 12 practitioners active in the design stage of PSSs, may be used by PSS providers directly as KPIs without the need for the application of the methods, further lowering the entry hurdles towards the lifecycle-oriented and efficient design of PSSs.
7.3 Research limitations and method challenges
While the research presented in this article has served to elucidate key issues focused on the value capture of PSS providers throughout the lifecycle, it suffers from some limitations: The case companies Arantius and Ericsson, though active in different markets, are quite similar in terms of their large size and international focus. Further, both companies have a long history of offering PSSs and are thus experienced in the design and provision of such offerings. Therefore, the case results presented here may be of limited relevance for smaller companies and companies entirely new to PSSs. An additional limitation lies with the semi-quantitative focus of the methods and the associated uncertainty and, in part, ambiguousness. While this uncertainty is inherent to most transition processes towards a servitized business model (Erkoyuncu et al., 2011), making decisions based on incomplete and partly qualitative data may be a challenge for managers and thus may be one of the reasons companies tend to experience challenges in servitization and continue with “business as usual”, possibly missing value-capturing opportunities (Matschewsky et al., 2017). In addition, the evaluation in the design phase using ProVa is executed on a component level. This may be too detailed for a company just moving into PSSs and for this stage, a broader and more concept-centric assessment such as the one proposed by Rondini et al. (2017) may be more promising. However, from the second iteration onwards, a component-centric approach in design evaluation for provider value may be appropriate and worthwhile.
A challenge has emerged as a result of the application of the PVA method at Arantius: In Step 3 (see Section 5.1.2), the respondent is asked to evaluate the importance of the value dimensions. As a result of the work with Arantius, almost exclusively highly important value dimensions have emerged, indicating the possible redundancy of this step. To facilitate internal communication and information transfer, however, the decision has been made for this step to remain in the assessment process, as it may be of particular value where the individual identifying the value dimensions is different from the one assessing its importance, or where there is disagreement on such an assessment between different practitioners. Further, a possibly helpful aspect the proposed approach is lacking at this point is support by a software-based aid to support method use and the visualization of the results, as showcased by Bertoni et al. (2013).
7.4 Outlook
With the results presented here, a more comprehensive understanding of the impact of becoming a PSS provider on the value to be captured and the incentives behind this is achieved. What is more, in deepening the understanding for the multidimensionality of the attainable benefits through offering PSSs in all stages of the lifecycle, the economic incentive to design resource-efficient, lasting and reliable PSSs is enhanced. As a result, PSS offerings have an increased likelihood of being the high-efficiency, high-value offerings in industrial practice that they are hoped to be (Meier et al., 2010; Mont, 2002; Tukker, 2015).
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Future research on the topic of a lifecycle-focused value capture of PSS providers and its operationalization is centered on two main aspects: On the one hand, the systematic approach presented will be further refined. In the case of the ProVa method, an effort to modularize the method to make it attractive for smaller PSS providers is currently underway. The result will be published in the form of a handbook for practitioners within the Swedish strategic innovation program
Produktion2030. On the other hand, the basis of the broadly applicable value dimensions and possible KPIs for PSS design and provision should be further broadened through the application of the PVA method with additional companies.
Acknowledgements
This research was financed by the case company Arantius and supported by the Mistra REES
program. The authors are grateful for the time and support of the many practitioners at Arantius and Ericsson involved throughout the course of the research, with special thanks to Saeed Khanagha and Sofi Elfving of Ericsson for their support with an earlier conference paper.
Declarations of interest: none.
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