Leveraging User-Centricity for OEMs Through Product, Software, and Service Development

New business models enabled by digital technologies are challenging Original Equipment Manufacturers (OEMs) because they are shifting somehow established eco-systems through new market entrants from previously unrelated industries. Under such competitive pressure, the companies are increasingly investing in technology-enabled services and software. With the introduction of smart, connected products, OEMs now have the opportunity to stay connected to their product-in-use and can establish a continuous feedback loop with the customers and users of their products. However, in order to create such products and equip them with the right digital technologies, OEMs need to know which technical capabilities the product should afford in order to enable the creation of valuable services. Often this is challenged by finance, the value chain structure and development logic of OEMs. The concept of servitization encompasses the shift from purchasing a product to the use of a service. Now, three different development approaches need to be taken into account and tied together when innovating: product development, software development, and service development. Each of these development approaches follows its own logic. Particularly in the realm of complex products and systems (CoPS) characterized by long development cycles and high complexity, this imposes novel challenges in order to create value for all stakeholders within a new integrated product-service-system. With this paper, we conceptually compare the development approaches of product development, software development, and service development, highlighting similarities, differences, and potential conflicts. Herein, we take a user-centered approach emphasizing the role of users in reducing uncertainty and setting focus for further development efforts. Based on these insights, we propose practical guidelines, how to support the servitization of OEMs and their evolving ecosystems and how to strategically involve users to create better, more effective product-service-systems.