© Fraunhofer SCS 1 Spring Servitization Conference, 18/05/2015 Tim Posselt, Angela Roth, Oliver Fuhrmann, Frank Danzinger ORGANISATIONAL COMPETENCE FOR SERVITIZATION: CHALLENGES AND DETERMINANTS

© Fraunhofer SCS 2 Research Problem: Organisational Challenges of Servitization Vandermerwe (1988): Gebauer and Friedli (2005); Gebauer et al. (2008); Mathieu (2001); Oliva and Kallenberg (2003): Neely (2008); Baines (2008); Martinez (2008): Servitization has enormous strategic implications for the firm Need to implement new organisational structures and processes »How can challenges of servitization be structured along internal system elements of the organisation?« »How do interrelations of challenges translate into measures of building organisational competence for servitization?« Need for new organisational capabilities and competences

© Fraunhofer SCS 3 Theoretical Foundation: »Open Systems View of the Firm« The OSV structures external and internal factors which impact a firm’s competitiveness (Freiling, 2004) A firm’s competitiveness depends on the perception of »strategic gaps« within the internal system elements of the organization (Sanchez and Heene, 2004, p.53) The perception of strategic gaps triggers activities of competence building and leveraging (Sanchez, 2004) Source: Sanchez and Heene (2004, p. 47)

© Fraunhofer SCS 4 Methodology Multiple Case Study 8 firms from the machine building industry Annual revenue: 60m – 390m € 600 – 2600 employees 11 semi-structured interviews with service managers ( min) Access to internal presentations, documents, marketing material and web presences Transcription: 218 pages of interview data Analysis: MaxQDA; deductive and inductive coding; identification of co-occurring codes via MaxQDA’s Code Relations Browser (Lewins, Silver 2007) Full-day focus group meeting to discuss and validate results

© Fraunhofer SCS 5 Results – Challenges (I) Employee Development Implementation of service-specific training programs Controlling and Incentives Implementation of performance measures and incentive systems Organisational Structure Institutionalization of decentralized service organization Implementation of new positions, roles and processes Cultural Transformation Creation of service awareness Provision of top management support Imparting of service values Business Concept Obtaining information about customer needs, preferences and performance measures Management Processes Strategic Logic

© Fraunhofer SCS 6 Results – Challenges (II) Service Development Service Process Definition Legal Terms and Conditions Customer Orientation Value Quantification Service Sales Value Quantification Customer Need Idenitfication Service Delivery Speed and Responsiveness Customer Communication Customer Need Identification Technology: Customer-related Technology: Customer-related Alignment of IT systems with customers Establishment of trust and transparency Technology: Employee-related Technology: Employee-related Motivation and training of employees for IT use Technology: Process-related Technology: Process-related Alignment of IT systems for information processing Definition of interfaces Employee Availability Employee Availability Ensure adequate employee qualificaton and quantity Operations Resources

© Fraunhofer SCS 7 Results – Determinants (I) Customer Information Utilization Strategic Logic Management Processes Resources Operations Business Concept Employee Development Employee Availability Development: Customer Orientation Sales: Customer Need Identification Value Communicaton Delivery: Customer Need Identification New Positions, Roles and Processes

© Fraunhofer SCS 8 Operations Management Processes Results – Determinants (II) Responsiveness and Speed in Service Delivery Strategic Logic Resources New Positions, Roles and Processes Development: Service Process Definition Delivery: Speed and Responsiveness Employee Development Decentralized Service Organization Cultural Transformation Technology: Employee-related Technology: Process-related

© Fraunhofer SCS 9 Implications / Next Steps Implications: Few determinants encompass a large number of organisational challenges Awareness of determinants can facilitate synergies in overcoming challenges Next Steps: In-depth case study „Customer Information Utilization“ Identify information supply and demand, as well as information types possessed and required Develop methods and tools for information distribution