Servitization as an innovation process: Identifying the needs for change

In the past, innovation efforts in industry were focused on tangible product innovations. Debating the topic of servitization has led to an expanded view of innovation. Intangible product innovations are an opportunity to complement innovation strategies. However, the practices and tools that facilitate creating tangible innovations have failed for intangible innovations. Therefore, many manufacturers hesitate to develop new services or Product Service Systems (PSS). With this background, this chapter presents a concept for managing a systematic innovation process with respect to specific challenges of intangible innovations. This managerial innovation model is based on case studies of servitizing manufacturing industries. The insights derived from actively applying industrial servitization processes were bundled into a generic procedure. The presentation of this generic procedure is organised into five sections: After an introduction, the second section provides a literature summary on service innovations in industrial firms. Then, we present the challenges of servitization processes identified in case studies and characterise the new innovation model.