Service Operation Models of Manufacturers - Minimum Baseline for Process and Information Systems Capabilities

In the last few years, services are continuously gaining importance for value generation of manufacturing firms. That services can lead to higher and more profitable growth especially in times of crises has been widely accepted. Manufacturers with a larger service operation in their business have a competitive advantage over their peers. However, a lot of money is still left on the table: service potential remains unrealized and many companies conceive services only in terms of providing spare parts. The road to becoming a service championa firm that provides a wide variety of services and manages the customer's operations is stony. To enter the service business, firms often need to adjust their whole business model and are confronted with physical resource limits. In addition to business challenges, a major obstacle lies in finding the appropriate IS support of the newly established service system. Existing IS applications in manufacturing firms are often ill-suited to provide the needed support. For instance, they do not adequately cover the customer interaction process or lack the required detail for technical descriptions on installed equipment. This paper aims at closing this gap by presenting a maturity model that includes five different service business models as well as the respective design of the IT landscape. The model is structured along the integration of service offering into the business model, from providing spare parts to managing the customer's operations, and clearly defines the necessary IT capabilities to implement a particular service model.In a detailed fashion, the model describes how the integration of services into the manufacturer's business model requires adaptations of the strategy, the organization, and its interaction with customers as well as investments in IT artifacts. Key elements of the model are performance measurement of industrial services, installed base management, mobile support for the serviceworkforce, integration of service and product data, and data quality assurance. The configurations of these elements vary along the five maturity levels of including services in the business model. The model allows practitioners to better self-assess their performance in the service business and can function as a basis for necessary investment decisions in order to expand and improve the service offering. In addition to presenting the maturity model, the paper provides input for reflection on how to achieve a successful transformation from product-centered to service-minded firms.