Business Model Innovation: A Process Model and Toolset for Servitizing Industrial Firms

The transition from a traditional business model (BM), based on product
sales, to a service-oriented BM constitutes an opportunity for
increasing revenues and achieving competitive advantages in industrial
firms. In particular, faced with the commoditization of goods, declining
profitability and customers with complex needs, an increasing number
of companies are reorienting their offering from selling products to providing
solutions. However, to be successful in this transformationmanufacturers should not only shift their value proposition but also
need to redesign their BM (Baines, Lightfoot, Benedettini, & Kay,
2009). But service-
oriented
BMs, particularly in capital goods companies,
have received limited attention to date, and both the practitioners
and the academia have limited knowledge on how to implement them
(Adrodegari & Saccani, 2017). In fact, this transition implies several
challenges, including a cultural shift from an engineering- and productcentred
core culture to a more relational and customer-oriented one; a
new strategy matching customers and business needs, providing them a
clear value proposition; the redesign of products and processes. The
company has to adapt its supply chain to set up a delivery network
capable of distributing the service components of its offering. Thus, it is
not surprising that, despite their potential benefits, a limited application
of service-oriented BMs has been observed in the capital goods sector,
particularly by the Small and medium-sized enterprises (SMEs) that find
it extremely difficult to embrace the transformation and face the abovementioned
challenges. To date, few managerial guidelines have been
developed to support this decision-making
regarding such BM transformation
(Reim, Parida, & Örtqvist, 2015). To provide a first step into
closing this gap, this chapter presents a new business model innovation
(BMI) process, a holistic and integrated multi-step methodology to support
firms’ transition towards service-oriented BMs. Different from other
works, this methodology provides a formalized service-oriented BM
framework that helps companies in structuring and managing, in an integrated
way, the relevant elements that have to be taken into account in
this transition. Moreover, a toolkit has been developed in order to enable
the application of the BMI process in the real world