Heat-as-a-Service (HaaS): a Complex Adaptive Systems perspective on servitization

Abstract

Servitization increases uncertainty and complexity in manufacturing firms by introducing dynamic interdependencies within and between organisations. This study proposes the conceptual lens of Complex Adaptive Systems (CAS) to frame manufacturers’ service delivery systems and a hybrid simulation approach to explore the dynamic interdependencies of their servitization journeys. The case of a boiler manufacturer transforming to a provider of Heat-as-a-Service (HaaS) is used to examine the dynamic interdependencies between the growth of a service business, digitalisation efforts and operational efficiency as well as the interaction between the emerging service- and existing product business. The findings indicate that the manufacturer will experience an initial ‘cost-shock’ which will significantly decline as service delivery optimises and diagnostic accuracy improves. The study contributes to the servitization literature by introducing CAS as a theoretical perspective and hybrid modelling as a practical approach to explore and reconcile the strategic and operational dimensions of servitization.