Servitization in Engineer-To-Order companies: evidences from a multiple case study research

Nowadays, services are increasingly taking the lead in global economy, in terms of both wealth produced and value added (Wölfl, 2005); at the same time the economic downturn has led in the last years, to demand stagnation on European markets. Thus, services, that are much more difficult to imitate by being less visible and more labor dependent, are becoming a sustainable sources of competitive advantage. Several evidences from OM literature show that in capital goods manufacturing context, extending service business through what has been defined “servitization” (Vandermerwe and Rada, 1988), can lead to generate new additional revenues and profits (Oliva and Kallenberg, 2003; Brax, 2005, Neely, 2009; Baines et al., 2009). Given this context and the relevance of the machinery industry (a typical Engineer-To-Order context) in the Italian economy, we investigate through an empirical research the state-of-art of this servitization process. The main objective of our study is to identify lines of improvement that ETO companies can follow to better exploit the service potential. Preliminary results highlight that, although companies perceive the increasing importance of services, they have not tackled yet the real challenges of servitization: strategy and culture are still focused mainly on tangible product and service portfolio is underdeveloped. Moreover, there is a lack concerning the management of service, both in terms of methodology and ICT support systems. Therefore, a more structured approach to the servitization process may ease companies in optimizing service delivery and gaining (real) competitive advantages.