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