6. Discussion
Viewed strategically, servitization is a radical BMI that substitutes services in place of products (Cusumano et al., 2015). From an operational perspective, as seen by examining NPD, the changes are subtler. NPD in Eng. Co. is a two-stage process, whereby products are developed to meet Sys Co.’s specifications and then customised for individual customers using Sys Co.’s products. For those involved in the first stage, servitization has little perceived impact. This is arguably because the process has been subtly updated, owing to the separation and incremental development of design capabilities. This is evident, for example, when interviewees describe “keep out zones” for maintenance purposes, which they design around a small change that avoids disrupting their normal activity.
The second stage, meanwhile, involves what Cusumano et al. (2015) describe as adapting services, whereby products are customised for individual customers, including the adaptation of the supply network, and smoothing services, where analysis of customer data allows increased service provision. Both of these rely on the firm’s NPD capabilities, but also demand that such capabilities are updated, for example, using customer data and engineering expertise to adapt products and smooth their purchase. As Ulaga and Reinartz (2011) argue, it is inconceivable that a pure service firm, lacking a track record with similar products or an NPD process to create them, could compete. These services are knowledge intensive, customer focused and require integration across organisational and geographic boundaries (Zhang et al., 2016).
