5. Conclusion and discussion
The market strategy and business model changes by manufacturing firms and software providers seem to exhibit two concurrent tendencies. On the one hand, firms change their market strategy by expanding the scope of their services, extending the timeline of services and guaranteeing the performance of both product and services. As a consequence, the manufacturer´s activity system is enlarged with additional activities that are delivered either internally or through outsourcing to suppliers (if more efficient delivery is needed) or through collaboration with partners (if additional competencies are required). This enlarging and opening up of the business model generates value through economies of scope (internally), through greater cost effectiveness (by commoditized suppliers) and by introducing innovation (through partnerships). Indeed, these two interlinked changes help manufacturers and software providers to create value by growing, and doing so efficiently and effectively. Yet, at the same time, these firms accept greater accountability in terms of customer outcomes and, thus, customer-oriented uncertainties and risks (operational-, dynamic-, and performance-related). This is coupled with relinquishing control over the activity system to suppliers and partners, and accumulating associated risks and uncertainties (internal, supplier and partner uncertainty). This two-fold increase in the potential for value creation and uncertainty is labelled, ‘the accountability spread’. It is argued in this paper that a firm embarking upon this journey needs to consider where it wants to place itself in relation to this risk-reward trade-off, and what kinds of capability it possesses that will allow it to materialize the potential for value creation whilst containing the uncertainty. Judicious identification of appropriate levels of accountability spread in combination with management's capacity to actualize value creation potential and to curb uncertainty represent key capabilities in the shift to services.