Digital Servitization: The Next “Big Thing” in Manufacturing Industries

Abstract

© IFIP International Federation for Information Processing 2019. Manufacturing firms increasingly produce and provide services along with their traditional physical products. This process, better known as servitization, is a mature theme in the literature, flourishing in recent years. Digital disruption is propelling manufacturers to move on towards digital transformation and deliver digital services. Prior research investigated the impact of servitization measured by the traditional services. However, the role of digital technologies in manufacturing is neglected. This paper intends to shed light on the impact of digital service portfolio antecedents on firm performance. Our analysis used the Serbian dataset of 240 manufacturing firms from the European Manufacturing Survey conducted in 2018. The empirical results show that, in manufacturing firms, digital services can significantly increase the turnover ratio. Results indicate that management in manufacturing companies should utilize digital services such as Web-based services for customized product design and Web-based offers for product utilization to maximize firm’s turnover ratio and upgrade current service business model.