Measuring Servitization Progress and Outcome:The Case of ‘Advanced Services’

Abstract

The purpose of this paper is to establish a framework for assessing the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’ – a complex bundling of products and services, whereby manufacturers offer capabilities and outcomes instead of products alone. ‘Advanced services’ represent the most complex offering in the current servitization trend among manufacturers. However, current performance measures lack the breadth and focus to assess progress or outcomes, and so support research and practice of organisational transformation efforts required. To address this gap the paper investigates how a manufacturer’s efforts to become an ‘advanced services’ provider can be comprehensively measured, and develops a framework for assessing the transformation journey towards becoming an ‘advanced services’ provider. The research method is based on (1) a systematic literature review process to create a comprehensive set of service-related performance measures that are available to assess a manufacturer’s servitization efforts, followed by (2) an engagement with an expert panel to synthesise the identified measures and create a set of ‘advanced services’ performance measures. The proposed framework is presented as a scorecard that can be used in practice to assess the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’.