Servitization through outcome-based contract – A systems perspective from the defence industry

Luciano Batista, Simon Davis-Poynter, Irene Ng, Roger Maull

Research output: Contribution to JournalArticlepeer-review

Abstract

This paper provides a viable systems perspective of an outcome-based service initiative involving major manufacturers in the defence industry. The viable systems perspective allowed a coherent structuration of the complex servitization context involving provider and customer organizations. It also unveiled critical relationship mechanisms that enable synergy and facilitate the achievement of co-capability by the organizations involved. Through a case study approach, the research finds that interventions in the customer system reduce variability in the provider system as well as in the service system as a whole. The systemic interventions are implemented via key provider/customer relationships the study identifies. The relationships deal with the high level of internal variety in outcome-based service systems. A typology for the identified relationships is developed, offering a helpful basis for the purposeful planning and design of interactions aimed at developing co-capability. The paper also offers theoretical propositions defining fundamental features of outcome-based service systems. The unique characteristics of these systems addressed in this paper provide particularly useful insights concerning the implementation of this type of servitization initiative not only in the defence industry, but also in other industrial sectors where servitization initiatives involve complex configurations of provider and customer organizations.
Original languageEnglish
Pages (from-to)133-143
Number of pages11
JournalInternational Journal of Production Economics
Volume192
Early online date3 Dec 2016
DOIs
Publication statusE-pub ahead of print - 3 Dec 2016

Keywords

  • Complex services
  • Outcome-based service
  • Servitization
  • Viable service systems

Fingerprint Dive into the research topics of 'Servitization through outcome-based contract – A systems perspective from the defence industry'. Together they form a unique fingerprint.

Cite this