Digital service offerings – a study in business modelling

Abstract: The ongoing fast paced technological evolution is impacting companies at a higher rate than ever before. For industrial companies’ new digital technologies have numerous application areas in the manufacturing process and offer the potential to offer advanced service offerings to customers. This implies that companies need to change their business model, however studies show that attempts by incumbents to change their business model often fail. The purpose of this thesis is to investigate which building blocks of a service provider’s business model could be modified, and how, to be able to design digital service offerings that overcome customers limitations related to acquiring digital solutions. The development of service offerings should be based on a deep understanding of customers’ activities. Therefore, semi-structured interviews were carried out to gain an understanding of limitations experienced by the case company’s customers related to acquiring digital solutions. By analyzing the collected empirical data and applying it to the case company’s business model utilizing the service logic business model canvas presented by Ojasalo and Ojasalo (2018) the research questions could be answered.  It is concluded that the service provider’s business model building blocks ‘customer’s world and desire for ideal value’, ‘value proposition’, ‘key resources’, and ‘key partners’ are impacted by the limitations faced by the customers. Thus, the elements of customer needs are:  Offerings that target a specific customer value and are financially reasonable Change management Digital readiness A stable supplier with long time commitment Systems that meet customer requirements (regarding system usability, continuous development, and cyber security) Peripheral equipment that meets customer requirements Competence A person in charge of the system From the service provider’s perspective, the offerings could be altered to target a specific customer value. Additionally, it is suggested that offered systems should fulfil customer demands regarding system usability, continuous development, and cyber security. Moreover, a need for competence and resources is expressed by the customers, thus, this could be a business opportunity for the service provider as well. Yet, all the needed resources and competence cannot be obtained within the service organization or the customer organization, thus, the building block ‘key partners’ must be altered as well.