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PSS #3 - Internal levers for product-service systems

Business Design & Innovation

During the IWT TETRA project, Antwerp Management School and the University of Antwerp developed a method to guide companies in finding and developing internal levers for their product service sytems. This considering that Flemish manufacturing companies can no longer solely focus on products if they want to distinguish themselves from their competitors. Due to the increasing international pressure, they face the challenge of increasing added value for their users more often. To realize this, they need to add service components to their offer. 

PSS_Toolkit-12.jpgA number of sectors build increasingly creative components around their product. However, research shows that the internal preconditions to create successful product service systems (PSS) are often absent in companies. For example, because structures are not created from a client based view or due to a lack of service culture.

Experience

The cases show that a distinction can be made between companies with limited PSS experience and companies that are already more developed PSS-wise. These groups experience different PSS thresholds. Apart from that, a model of three types of thresholds was identified based on observations and was called the PSS-triad, which are:

1. Insufficient knowledge and/or sources to work out existing PSS (type 1)

2. Insufficient knowledge to develop new, integrated PSS (type 2)

3. A product-dominant logic on the level of the organization that keeps the company from developing and implementing PSS (type 3).

It is possible that a combination of thresholds from the PSS-triad is present in companies.

 

During the TETRA project, some existing diagnostic tools were used in an integrated way and they experimented with a new tool to help companies obtain new insights. This "PSS strategic rollout toolkit" shows PSS-upscale potential in two aspects. First of all, they distinguished between “exploring” and “exploiting”, which coincides with the distinction between developing new PSS and working out existing PSS. Secondly, the potential (practical) problems, often related to one of the thresholds of the PSS-triad model or a combination thereof, can be determined easily.

Insights

The results of the project offer relevant insights for companies and managers that are interested in scaling up their product service combinations and for advisors who want to help companies in their transition towards services.

Managers and advisors firstly need to become aware of the fact that different servitization (the transition to PSS) thresholds are very much dependent on the PSS-related experience and knowledge within the company. They also have to be aware of the type of PSS-strategy that the company pursues. Then they can use the different existing instruments to map out both the current and the envisioned strategy of the company and to determine chasms on the level of PSS-development, creation or logic.

Within the context of the TETRA project, a new tool has been developed for companies to close these chasms. This is done by creating and defining potential projects to improve PSS. By using this tool with employees with different perspectives within the organization, companies can develop a general company logic that supports PSS throughout the organization. This tool is being put at the disposal of businesses and advisors by Antwerp Management School.  

Download the white paper (Dutch)

Download the tool (English)