Skip to main content

Data Analytics Capability Roadmap for PPO Business Models in Equipment Manufacturing Companies

  • Conference paper
  • First Online:
Product Lifecycle Management. PLM in Transition Times: The Place of Humans and Transformative Technologies (PLM 2022)

Abstract

The objective of this paper is to extend the knowledge of data analytics capabilities and the development process required to implement pay-per-output/-outcome (PPO) business models. To achieve this objective, we conducted qualitative research to study two equipment manufacturing companies in their business model transformation, with a special interest in their data analytics capability development path. The findings were threefold; first we validated the data analytics capabilities necessary for PPO business models synthesised from literature with the selected case companies. Second, two additional data analytics capabilities, namely capability to influence how performance is measured and analysed, and capability to simulate the solution’s financial performance) were identified. Finally, this study presents two different roadmaps on how data analytics capabilities have been developed. The study findings suggest that remote monitoring capability is among the most critical data analytics capability to initiate a PPO business model in the equipment manufacturing industry. This study contributes to business model literature, and information systems literature.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

References

  1. Menon, K., Kärkkäinen, H., Mittal, S., Wuest, T.: Impact of IIoT based technologies on characteristic features and related options of nonownership business models. In: Fortin, C., Rivest, L., Bernard, A., Bouras, A. (eds.) PLM 2019. IAICT, vol. 565, pp. 302–312. Springer, Cham (2019). https://doi.org/10.1007/978-3-030-42250-9_29

    Chapter  Google Scholar 

  2. Uski, V.M., et al.: Review of PPX business models: adaptability and feasibility of PPX models in the equipment manufacturing industry. In: Canciglieri Junior, O., Noël, F., Rivest, L., Bouras, A. (eds.) PLM 2021, vol. 639, pp. 358–372. Springer, Cham (2022). https://doi.org/10.1007/978-3-030-94335-6_26

    Chapter  Google Scholar 

  3. Grubic, T., Peppard, J.: Servitized manufacturing firms competing through remote monitoring technology: an exploratory study. J. Manuf. Technol. Manag. 27(2), 154–184 (2016)

    Article  Google Scholar 

  4. Uuskoski, M., Menon, K., Kärkkäinen, H., Koskinen, K.: Perceived risks and benefits of advanced pay-per-use type of business models based on industry 4.0 enabled technologies in manufacturing companies. In: Chiabert, P., Bouras, A., Noël, F., Ríos, J. (eds.) PLM 2018. IAICT, vol. 540, pp. 498–507. Springer, Cham (2018). https://doi.org/10.1007/978-3-030-01614-2_46

    Chapter  Google Scholar 

  5. Menon, K., Mittal, S., Kärkkäinen, H., Kuismanen, O.: Systematic steps towards concept design of pay–per-x business models: an exploratory research. In: Canciglieri Junior, O., Noël, F., Rivest, L., Bouras, A. (eds.) PLM 2021, vol. 640, pp. 386–397. Springer, Cham (2022). https://doi.org/10.1007/978-3-030-94399-8_28

    Chapter  Google Scholar 

  6. Schroderus, J., Lasrado, L.A., Menon, K., Kärkkäinen, H.: Towards a pay-per-X maturity model for equipment manufacturing companies. Procedia Comput. Sci. 196, 226–234 (2022)

    Article  Google Scholar 

  7. Gupta, M., George, J.F.: Toward the development of a big data analytics capability. Inf. Manag. 53(8), 1049–1064 (2016)

    Article  Google Scholar 

  8. Manresa, A., Prester, J., Bikfalvi, A.: The role of servitization in the capabilities – performance path. CR 31(3), 645–667 (2021)

    Google Scholar 

  9. Khanra, S., Dhir, A., Parida, V., Kohtamäki, M.: Servitization research: a review and bibliometric analysis of past achievements and future promises. J. Bus. Res. 131, 151–166 (2021)

    Article  Google Scholar 

  10. Agostini, L., Nosella, A.: Industry 4.0 and business models: a bibliometric literature review. BPMJ 27(5), 1633–1655 (2021)

    Article  Google Scholar 

  11. Phaal, R., Farrukh, C.J.P., Probert, D.R.: Technology roadmapping—a planning framework for evolution and revolution. Technol. Forecast. Soc. Chang. 71(1–2), 5–26 (2004)

    Article  Google Scholar 

  12. Baines, T., Ziaee Bigdeli, A., Bustinza, O.F., Shi, V.G., Baldwin, J., Ridgway, K.: Servitization: revisiting the state-of-the-art and research priorities. IJOPM 37(2), 256–278 (2017)

    Article  Google Scholar 

  13. Adrodegari, F., Alghisi, A., Ardolino, M., Saccani, N.: From ownership to service-oriented business models: a survey in capital goods companies and a PSS typology. Procedia CIRP 30, 245–250 (2015)

    Article  Google Scholar 

  14. Ng, I.C.L., Maull, R., Yip, N.: Outcome-based contracts as a driver for systems thinking and service-dominant logic in service science: evidence from the defence industry. Eur. Manag. J. 27(6), 377–387 (2009)

    Article  Google Scholar 

  15. Liinamaa, J., Viljanen, M., Hurmerinta, A., Ivanova-Gongne, M., Luotola, H., Gustafsson, M.: Performance-based and functional contracting in value-based solution selling. Ind. Mark. Manag. 59, 37–49 (2016)

    Article  Google Scholar 

  16. Möller, H., Shahnavaz, T.: Use-Oriented Business Model for Consumer Durables: an Exploratory Case Study on Business Model Capabilities (2020)

    Google Scholar 

  17. Yang, M., Smart, P., Kumar, M., Jolly, M., Evans, S.: Product-service systems business models for circular supply chains. Prod. Plan. Control 29(6), 498–508 (2018)

    Article  Google Scholar 

  18. Gebauer, H., Saul, C.J., Haldimann, M., Gustafsson, A.: Organizational capabilities for pay-per-use services in product-oriented companies. Int. J. Prod. Econ. 192, 157–168 (2017)

    Article  Google Scholar 

  19. Qi, Y., Mao, Z., Zhang, M., Guo, H.: Manufacturing practices and servitization: the role of mass customization and product innovation capabilities. Int. J. Prod. Econ. 228, 107747 (2020)

    Article  Google Scholar 

  20. Andreas Zolnowski, T.B., Schmitt, A.K.: Understanding the impact of remote service technology on service business models in manufacturing: from improving after-sales services to building service ecosystems. In: 19th European Conference on Information Systems (ECIS), p. 109 (2011)

    Google Scholar 

  21. Rösler, J., Friedli, T.: A capability model for equipment-as-a-service adoption in manufacturing companies. In: West, S., Meierhofer, J., Ganz, C. (eds.) Smart Services Summit. PI, pp. 59–71. Springer, Cham (2021). https://doi.org/10.1007/978-3-030-72090-2_6

    Chapter  Google Scholar 

  22. Yin, R.K.: Case Study Research: Design and Methods, 3rd edn. Sage Publications, Thousand Oaks (2003)

    Google Scholar 

  23. Dyer, W.G., Wilkins, A.L.: Better Stories, Not Better Constructs, to Generate Better Theory: A Rejoinder to Eisenhardt, p. 8 (1991)

    Google Scholar 

  24. Eisenhardt, K.M., Graebner, M.E.: Theory building from cases: opportunities and challenges. AMJ 50(1), 25–32 (2007)

    Article  Google Scholar 

  25. Wu, S.J., Melnyk, S.A., Flynn, B.B.: Operational capabilities: the secret ingredient: operational capabilities. Decis. Sci. 41(4), 721–754 (2010)

    Article  Google Scholar 

Download references

Acknowledgement

This work was funded by Business Finland BF/Future Spaces.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Prasanna Kumar Kukkamalla .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2023 IFIP International Federation for Information Processing

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Kukkamalla, P.K., Uski, VM., Kuismanen, O., Kärkkäinen, H., Menon, K. (2023). Data Analytics Capability Roadmap for PPO Business Models in Equipment Manufacturing Companies. In: Noël, F., Nyffenegger, F., Rivest, L., Bouras, A. (eds) Product Lifecycle Management. PLM in Transition Times: The Place of Humans and Transformative Technologies. PLM 2022. IFIP Advances in Information and Communication Technology, vol 667. Springer, Cham. https://doi.org/10.1007/978-3-031-25182-5_5

Download citation

  • DOI: https://doi.org/10.1007/978-3-031-25182-5_5

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-25181-8

  • Online ISBN: 978-3-031-25182-5

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics