The Business Logics of Digital Services: A vehicle manufacturing firm’s endeavor for creating digital service business with digitalized product platforms.
My PhD thesis focuses on the business logics of digital services in the context of digitalized product platforms. With the advent of innovative digital technologies, manufacturing firms are expanding business from tangible products sale to digital service offerings. Firms are creating digitalized product platforms by embedding digital technologies in tangible products. These platforms are paving the way for firms to design digital services and offer the services to customers. As manufacturing firms traditionally follow goods-centric business logic with focus on tangible product sales, they are now challenged to adapt their business logic in relation to digital services. Earlier research in manufacturing industry shows that delay in reshaping business logic in the digital age has caused downfall in business.
Existing research in Information Systems (IS) shows that new value system emanates when embedded digital technologies in product platforms enable digital service design. The ongoing digital innovation of previously non-digital products have drawn attention in IS research as digital innovation is enabling the design of novel digital services and creating new business opportunities. Digital technologies can be reprogrammed to create new functionalities that can lead to new digital service offerings. Due to the layered architecture of digital technology, innovation can take place at any of the layers such as, device layer, network layer, application functionality layer or contents layer. This implies that digital service business can be conducted in different ways and firms can endeavor new business logics when digitalized product platforms are created. However, existing IS research paid little attention to the business logics of digital services that are enabled by embedded digital technology in tangible products.
Therefore, this research seeks answer to the following question: what are the business logics of digital services in the context of digitalized product platforms? Based on a collaborative research project with a vehicle manufacturing firm, research was conducted on Remote Diagnostics Services (RDS). RDS are digital services enabled by embedded technology in vehicles. Using the concepts of goods-centric business logic, service-centric business logic and digital platforms, this research makes contribution by identifying and describing three business logics that are specific for digital services in the context of digitalized product platforms. The specific business logics of digital services are: Digitalized product platform (DPP) centric business logic, customer-centric business logic and hybrid business logic. The business logics show specific value dimensions, role of products, roles of firm and roles of customers in comparison with the goods-centric business logic and the service-centric business logic.