Designing Industrial Companies Procedural Backbone to Master Digital Service Innovation A Dynamic Capabilities Perspective

At present, industrial companies face increasingly complex challenges. Shrinking prod-uct margins and changing customer needs form the core of these demands. A reliable service business offers an attractive option to industrial companies wanting to evade from the current conditions. In addition, ongoing digitalization is taking services to a new level. The resulting digital services combine the latest technological trends with their ability to meet individual customer needs. Therefore, industrial companies turn to digital services to protect and increase their competitive advantage. However, existing digital services miss the predefined targets of most industrial companies. This shortcom-ing is caused by firms developing digital services primarily based on product-driven innovation approaches. Also, academia remains silent on suitable digital service inno-vation practices. In response, this dissertation develops a new digital service innovation approach for industrial companies. The dynamic capabilities view provides the conceptual framework to develop these new organizational capabilities. Organizational processes, comprising routines, arti-facts, and actors, implement the required innovation (i.e., dynamic) capabilities in prac-tice. Moreover, systematic literature analyses provide the foundation for the presented research. In addition, two empirical studies enhance the theoretical insights on digital service innovation. First, an in-depth interview study explores necessary routines in practice at 24 organizations. Second, focus group research involving eight industrial companies expands the previous understanding of digital service innovation to an im-plementable approach. Finally, this dissertation presents a management framework of digital service inno-vation governance and process models built on routines, artifacts, and actors. The gov-ernance model transforms industrial companies organizations. Thereby, organizational alignment and sufficient performance control enable digital service innovations. The process model directs the firms through these innovations by applying three innovation modes: identification, conceptualization, and implementation. In sum, this dissertation makes a valuable contribution to digital service innovation research and practice. The findings close the gap in the literature between defined rou-tines and high-level dynamic capabilities. In practice, the management framework es-tablished in this study constitutes a powerful tool that helps industrial companies build robust digital service businesses. Its application at industrial companies drives cus-tomer-centric, digital service innovations that overcome the increasing challenges in the markets.

At present, industrial companies face increasingly complex challenges. Shrinking prod-uct margins and changing customer needs form the core of these demands. A reliable service business offers an attractive option to industrial companies wanting to evade from the current conditions. In addition, ongoing digitalization is taking services to a new level. The resulting digital services combine the latest technological trends with their ability to meet individual customer needs. Therefore, industrial companies turn to digital services to protect and increase their competitive advantage. However, existing digital services miss the predefined targets of most industrial companies. This shortcom-ing is caused by firms developing digital services primarily based on product-driven innovation approaches. Also, academia remains silent on suitable digital service inno-vation practices. In response, this dissertation develops a new digital service innovation approach for industrial companies. The dynamic capabilities view provides the conceptual framework to develop these new organizational capabilities. Organizational processes, comprising routines, arti-facts, and actors, implement the required innovation (i.e., dynamic) capabilities in prac-tice. Moreover, systematic literature analyses provide the foundation for the presented research. In addition, two empirical studies enhance the theoretical insights on digital service innovation. First, an in-depth interview study explores necessary routines in practice at 24 organizations. Second, focus group research involving eight industrial companies expands the previous understanding of digital service innovation to an im-plementable approach. Finally, this dissertation presents a management framework of digital service inno-vation governance and process models built on routines, artifacts, and actors. The gov-ernance model transforms industrial companies organizations. Thereby, organizational alignment and sufficient performance control enable digital service innovations. The process model directs the firms through these innovations by applying three innovation modes: identification, conceptualization, and implementation. In sum, this dissertation makes a valuable contribution to digital service innovation research and practice. The findings close the gap in the literature between defined rou-tines and high-level dynamic capabilities. In practice, the management framework es-tablished in this study constitutes a powerful tool that helps industrial companies build robust digital service businesses. Its application at industrial companies drives cus-tomer-centric, digital service innovations that overcome the increasing challenges in the markets.