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Servitization and remote monitoring technology A literature review

and research agenda

Article  in  Journal of Manufacturing Technology Management · January 2014

DOI: 10.1108/JMTM-05-2012-0056

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JMTM
25,1 Servitization and remote
monitoring technology
A literature review and research agenda
100
Tonci Grubic
Cranfield School of Management, Complex Systems Research Centre,
Received 25 May 2012
Revised 5 October 2012 Cranfield University, Cranfield, UK
8 November 2012
Accepted 8 November 2012 Abstract
Purpose – Servitization centres on the transfer of risks from the customer to manufacturer.
By providing real-time information about current and predicted health of a product in the field, remote
monitoring technology can mitigate some of those risks. Although recognised as one of the key
enablers of servitization, the mainstream servitization research community has shown very little
interest in this topic. The aim is to identify and critically analyse relevant research addressing the
topic of remote monitoring technology and servitization and, based on this analysis, propose an
agenda to guide future research in this area.
Design/methodology/approach – The methodology adopted is literature review consisting of
three steps: define purpose and research questions, select keywords and databases, and identify and
analyse relevant papers.
Findings – Ten findings have been made, which characterise current state of research under
categories of examples, benefits, and challenges of using remote monitoring technology to support
servitized strategies. Several areas that call for further research are suggested, but general impression
is that the understanding about the role and contribution of remote monitoring technology in service
delivery and strategy is still in its infancy and much greater effort will have to be invested to change
this. It is also suggested that this technology holds a great potential for service and business model
innovation; hence, more research is needed to further the knowledge about these topics.
Originality/value – This paper qualifies as the first attempt to consolidate and analyse relevant
research at the intersection of servitization and remote monitoring technology.
Keywords Research agenda, Review, Servitization, Remote monitoring technology
Paper type Literature review

Journal of Manufacturing Technology
Management
Vol. 25 No. 1, 2014
pp. 100-124
q Emerald Group Publishing Limited
1741-038X
DOI 10.1108/JMTM-05-2012-0056
1. Introduction
The term servitization was first introduced by Vandermerwe and Rada (1988) to refer
to the phenomenon by which some manufacturers change their underlying business
offers by adding value to their core products through services. Thus, servitization is
premised on an idea that customers reap benefits from products only when they are
accompanied by services which collectively deliver value-in-use (Vargo and Lusch,
2004, 2008). This resonates with Levitt who supposedly once said, “People don’t want
to buy a quarter-inch drill. They want a quarter-inch hole!” Servitization, therefore, is
all about change in emphasis, from “drills” to “holes”, i.e. change from selling a product
to selling its output or use instead.
This change brings lots of challenges with a transfer of risks, from a customer to a
product manufacturer, being the most important one. The primary risks incurred by
the manufacturer are non-availability and suboptimal product performance.
By providing real-time data about the health, performance, usage and location of a
product in the field, remote monitoring technology can mitigate these risks. It collects Remote
and analyses data about products and fleets which enable manufacturers to be more monitoring
proactive in their maintenance by replacing or repairing a faulty or deteriorating
component before it fails, thus preventing losses, disruptions, environmental, safety, technology
and other hazards such failure could bring upon customer’s business. As a recent
Aberdeen Group report (Dutta, 2009) shows, a growing number of manufacturers are
adopting this technology to support their servitized strategies. For example, Boeing’s 101
Integrated Vehicle Health Management (Ofsthun, 2002) and Rolls-Royce’s Engine
Health Management (Waters, 2009) are clear attempts in this direction.
The importance of remote monitoring technology for servitization has recently been
emphasised by Ostrom et al. (2010). They interviewed a number of academics and
business executives worldwide and synthesised their feedback into ten overarching
research priorities which are key for advancing the science of service. Research into
smart technologies, i.e. technologies that provide real-time situational awareness about
products, processes and/or customers, is marked as one of those priorities. Although
acknowledged and widely commented on as an important enabler, there has been
limited understanding about the benefits, role, contribution, examples, challenges and
potential of remote monitoring technology in supporting servitized strategies and
promoting service innovation. The prevailing accounts are scarce and offer somewhat
speculative insight into these matters. Thus, Oliva and Kallenberg (2003) argue that
condition monitoring technology per se does not add value to customers. The value
becomes apparent when this technology is used in the context of product availability
and capability value propositions. Alonso-Rasgado et al. (2004) and Johnstone et al.
(2009) argue that providing total care or “power by the hour” types of services must be
supported with on-going real-time product monitoring, while Neu and Brown (2005)
claim that an ability to use remote monitoring technology is critical for competing on
services in goods-dominant companies. Although all these authors point to the
importance of remote monitoring technology in servitized strategy, their accounts have
been fairly colloquial in nature. Due to this reason, there is a clear need for a
comprehensive and critical analysis of work done in this area. This is where we see this
paper making contribution. More specifically, our aim is to identify and critically
analyse relevant research, addressing the topic of remote monitoring technology and
servitization, and based on this analysis, propose an agenda to guide future research
in this area.
The rest of this paper is structured as follows. The next section introduces
methodology used to identify and analyse the relevant papers, while Section 3 presents
key results from their analysis. By reflecting on analysis results, Section 4 will propose
two general research streams to guide future research efforts in this area, thus
concluding the paper.

2. Review strategy
Remote monitoring technology is widely perceived as consisting of a combination of
hardware, for example, sensor and wireless technology infrastructure, and software,
for example, data acquisition, transmission and processing algorithms technologies.
Although it may appear to be a relatively recent development, the technology itself is
at least four decades old. Thus, Küssel et al. (2000) report how US machine tool
manufacturer Kearney and Trecker, in the mid-1970s of the last century, designed
JMTM a data-transmission system in order to reduce travelling costs of its service
25,1 department. Until recently, the research in this area focused mainly on techniques,
tools, methods and technology implementations (for an overview, see Isermann and
Ballé (1997), Leonhardt and Ayoubi (1997), Jardine et al. (2006), Kothamasu et al. (2006),
Heng et al. (2009)). Therefore, in order to identify papers relevant for this study, an
appropriate review strategy had to be devised. Although relevant in helping to build an
102 understanding of technical aspects of remote monitoring technology, this and similar
literature was excluded from the analysis. Our aim was not to conduct a complete
review of servitization and remote monitoring technology literature, but only of those
works which are at the intersection of these two domains. The scope of the literature
review included papers published in academic literature which specifically deal with
organisational, business, management and/or technical implications on those of using
remote monitoring technology to support service-oriented business models and
strategies of high-value product manufacturers. The review strategy adopted consists
of three steps:
(1) define purpose and research questions;
(2) select keywords and databases; and
(3) identify and analyse relevant papers.

The review purpose is to identify and analyse relevant papers, in line with the aims
and scope defined before, which contribute to our current understanding of the role of
remote monitoring technology in servitized strategy and which could be used to inform
future research efforts in this domain. This is a very general aim which lacks detail in
terms of specific research questions. Thus, on a finer level, this paper aims to address
the following research questions:
RQ1. What are the characteristics of relevant literature addressing this
phenomenon?
RQ2. What are the examples of remote monitoring technology supporting
servitized strategy found in the literature?
RQ3. What benefits are commonly associated with these applications to both
manufacturer and customer?
RQ4. What challenges do manufacturers face when using remote monitoring
technology to support servitized strategy?
Upon defining purpose and research questions the next step involved selection
of keywords and databases to conduct the search. The keywords used were:
“servitization”, “service”, “integrated solutions”, “product-service system”,
“manufacturing”, “technology”, “monitoring”, “diagnostic”, “diagnostics”,
“prognostic” and “prognostics”. These keywords were identified as relevant and
sufficiently general and assembled in various search strings. Databases searched
include: Proquest, ScienceDirect, EBSCO, Scopus, Emerald and Web of knowledge.
These were selected because they cover the key topics addressed by this paper and
journals which have published some seminal research in the area of servitization.
The titles and abstracts of papers returned from the search were then checked to
ensure their relevance for the study. Only those papers that satisfied this criterion were
identified as relevant and considered for full analysis. These were read and their Remote
references cross-checked, to make sure that any relevant works not detected through monitoring
the original database search were included, and a decision about their inclusion was
then made. There is a concern regarding the limitation of this process that needs to be technology
voiced. Namely, although considerable effort was invested to identify relevant papers,
it is possible that some relevant work may have been missed. This could be attributed
to the choice of keywords and databases searched. 103
Finally, a total of 20 papers were identified and subsequently analysed by using the
research questions as an analysis framework. The analysis was done using NVivo
software by coding the papers into broad categories of examples, benefits and
challenges. This was very coarse grained analysis. More detailed analysis then
followed which involved the search for patterns and differences within and between
the categories. The result was a finer list of sub-categories.
Table I introduces the papers identified while in the next section we present our key
findings.

3. Servitization and remote monitoring technology research – analysis

3.1 Key characteristics of research
Before proceeding with an analysis of relevant work for the domains of examples,
benefits and challenges of using remote monitoring technology to support service
delivery, this section reports the key characteristics of this work. Namely, some
preliminary findings can be drawn by reflecting on the content of Table I. Three such
findings are made here and grouped under two headings:
(1) maturity and level of interest; and
(2) definitions and terminologies used.

3.1.1 Maturity and level of interest. Twenty papers may suggest that research
into remote monitoring technology enabled service strategy and delivery is a lively
research topic. Unfortunately, the reality is far from such an idyllic picture. Most of the
research works identified address the research questions in different levels of detail
and precision, with some being more detailed and precise than others. Works by Lee
(1998), Wise and Baumgartner (1999), Davies (2004), Reinartz and Ulaga (2008),
Gremyr et al. (2010), and Bandinelli and Gamberi (2012); offer very limited insights into
applications and almost nothing on the benefits and challenges of using remote
monitoring technology. This is understandable considering that the aim of these
studies is not closely related to remote monitoring technology (Table I) but the latter is
mentioned in a rather colloquial fashion. In the case of Lee (1998), the situation is
opposite as this paper deals mainly with technical aspects of developing remote
monitoring technology and the potential to promote and support services is mentioned
only in a passing manner. Other works provide more details and some of them, for
example Allmendinger and Lombreglia (2005), Jonsson and Holmström (2005), Jonsson
(2006), Brax and Jonsson (2009), Jonsson et al. (2009), Kuschel (2009), Grubic et al.
(2011), and Westergren (2011), address all four research questions and may qualify as
key contributors in this area. After this brief and high-level analysis, it becomes
apparent that the relevant research is reduced to a handful of papers, which are only
few years old and mostly originating in Scandinavian countries (Jonsson and
Holmström, 2005; Jonsson, 2006; Brax and Jonsson, 2009; Jonsson et al., 2009;

Table I.
literature review
Papers identified through
Paper
1. Lee (1998)
2. Wise and Baumgartner (1999)
3. Küssel et al. (2000)
4. Biehl et al. (2004)
5. Davies (2004)
6. Kuschel and Ljungberg (2004)
7. Allmendinger and Lombreglia (2005)
25,1
104
JMTM
Aim Methodology applied
To introduces the concept and framework Position paper
underlying a teleservice engineering system for the
life cycle support of manufactured products. Only
somewhat relevant for this study
To introduce four business models, with embedded Conceptual work built on multiple case
services being one of the four models and relevant studies (assumption, not enough
here, which capture different strategies of how information to support this claim)
manufacturers go downstream towards the customer
and become service providers. Only somewhat
relevant for this study
To introduce results from a survey of German Mail survey
machine tool manufacturers which present problems
of teleservices
To introduce an overview and comparison about Research builds on available public
state of remote repair, diagnostics, and maintenance information (e.g. papers, brochures, trade
technology, in the USA, Japanese, and German publications) and interviews
machine tool industries and existing challenges and
their future business applications
To introduce empirical study of five industrial Multiple case study
companies and their challenges of moving into
integrated solutions provision. Only somewhat
relevant for this study
To report results from an ethnographic study of Ethnographic workplace study
remote diagnostics as used in service provision by a
company making engines and operating in marine
industry
To introduce four basic business models available to Conceptual work built on multiple case
product manufacturers which decide to embrace studies (assumption, not enough
smart services;, i.e. services enabled by remote information to support this claim)
monitoring technology
(continued)
Paper
8. Jonsson and Holmström (2005)
9. Jonsson (2006)
10. Jonsson et al. (2008)
11. Reinartz and Ulaga (2008)
12. Brax and Jonsson (2009)
13. Jonsson et al. (2009)
14. Kuschel (2009)
15. Gremyr et al. (2010)
16. Laine et al. (2010)
Table I.
Aim Methodology applied
Through six case studies of manufacturing Multiple case study
companies, this research explores application of
remote diagnostics in providing maintenance
services and the way in which this technology is
enacted in remote and local maintenance groups
To explore how application of remote diagnostics Multiple case study
technology supported maintenance services changes
view on surveillance and its ethical consequences in
the context of five manufacturing companies
Through a case study of a shipboard manufacturer, Single case study
this paper explores how application of remote
diagnostics technology influences value creation in
manufacturing industry
To propose a four-step framework to help Conceptual work built on multiple case
manufacturers sell services more profitably. Only studies (assumption, not enough
somewhat relevant for this study information to support this claim)
To analyse challenges of using remote diagnostics Descriptive and comparative case study
technology to enable integrated solutions in two involving two manufacturing companies
manufacturing companies
To investigate impact of remote diagnostics on local Multiple case study
and remote work practices and knowledge in four
industrial organizations
To build an understanding about technical, business, Ethnographic field studies, case studies,
and organisational prerequisites for the development prototyping work, and action research
and diffusion of vehicle services
To identify critical dimensions of service innovation Multiple case study research but only one
in manufacturing firms. Only somewhat relevant for addressing the application of remote
this study monitoring technology
To define the concept of downstream shift, as Single case study
proposed by Wise and Baumgartner (1999), in the
context of machinery manufacturing industry and to
explore the role of remote technologies in that shift
(continued)
technology
monitoring
Remote
105

Table I.
Paper
17. Greenough and Grubic (2011)
18. Grubic et al. (2011)
19. Westergren (2011)
20. Bandinelli and Gamberi (2012)
25,1
106
JMTM
Aim Methodology applied
To develop and validate an approach that explores Spreadsheet and discrete-event simulation
the costs and benefits of applying prognostics and enriched with interviews
health management technologies in servitization in
the machine tool industry
To explore the extent, motivations, benefits, and Mail survey across the whole UK
challenges of deploying diagnostic and prognostic manufacturing sector
technology as an element of competitive strategy
In the context of applying remote monitoring Multiple case study research involving a
technology in services provision, this paper explores hydraulic drive systems’ manufacturer
the contextual factors which contributed to the and three of their customers
failure of open innovation project
To understand whether and how prevalent is the use Single case study
of product-service system design methodologies in
oil and gas industry. Only somewhat relevant for this
study
Kuschel, 2009; Westergren, 2011), hence qualifying the research into the role of remote Remote
monitoring technology in servitized strategy as a relatively new and under researched monitoring
area. Therefore, once we get behind the individual contributions, one can conclude
the following: technology
Finding 1. A review of literature reveals that the research into the role and
contribution of remote monitoring technology in servitized strategy is a
relatively new and under researched area, with only a handful of 107
relevant research contributions.

3.1.2 Definitions and terminologies used. Although several authors use the term
“remote monitoring technology”, for example Davies (2004), Gremyr et al. (2010),
Laine et al. (2010), Westergren (2011), and Bandinelli and Gamberi (2012), there is a
great deal of diversity in terms of terminologies and definitions adopted when referring
to this phenomenon. Some, for example Wise and Baumgartner (1999), offer no
definition and simply call it new digital technologies, while others use a number of
terms, all of which, in essence, refer to the same principle of remote monitoring
technology. Thus, Lee (1998) and Küssel et al. (2000) call it teleservices, which the latter
define as services enabled by information and communication technologies over
spatial distance and providing after-sales support, such as maintenance and repair.
Biehl et al. (2004) use the terms remote repair, diagnostics and maintenance, which is a
broad term incorporating various technologies and applications that automatically
monitor performance, diagnose problems and request attention from service
technicians. Remote diagnostics, as referred to in Kuschel and Ljungberg (2004),
Jonsson and Holmström (2005), Jonsson (2006), Jonsson et al. (2008, 2009), Brax and
Jonsson (2009), and Kuschel (2009), is another frequently used term. Similar to remote
diagnostics, which refers to monitoring of equipment from a distance with an aim of
determining its current condition, is a concept of smart services as used by
Allmendinger and Lombreglia (2005) and Reinartz and Ulaga (2008). Finally, apart
from diagnostics, Greenough and Grubic (2011) and Grubic et al. (2011) use prognostics
to refer to an ability of providing information about equipment’s remaining useful life.
Table II lists all the different terminologies used to refer to remote monitoring
technology and classifies those terms by source and application industry.
Therefore, in respect to terminologies and definitions used the following two
findings are made:
Finding 2. There is a great deal of diversity in terminology used when referring to
the application of remote monitoring technology to support service
delivery, examples include: teleservices, remote diagnostics, smart
services and diagnostics and prognostics; where all, in essence, refer to
the same principle.
Finding 3. The key principle behind remote monitoring technology is a combination
of software and hardware technologies which enable remote collection of
data about the performance and usage of a product in the field to
determine its current and predicted condition and health.

To prevent any possible confusion and because they all operate according to the same
underlying principle, in this paper we use remote monitoring technology instead of a
variety of the concepts and terms identified above.
JMTM
Concept used Paper Application industry
25,1
Diagnostics and prognostics Greenough and Grubic (2011), Aerospace, defence, marine,
Grubic et al. (2011) electronics, power industry,
oil and gas and energy
New digital technologies Wise and Baumgartner (1999) Aerospace
108 Remote diagnostics Kuschel and Ljungberg (2004), Marine and industrial equipment
Jonsson and Holmström (2005),
Jonsson (2006), Jonsson et al.
(2008, 2009), Brax and Jonsson
(2009), Kuschel (2009)
Remote monitoring Davies (2004), Gremyr et al. (2010), Transport, telecommunication
technology Laine et al. (2010), Westergren networks, industrial equipment
(2011), Bandinelli and Gamberi and oil and gas
(2012)
Remote repair, diagnostics, Biehl et al. (2004) Office equipment, building and
and maintenance facility maintenance, computers
Table II. and telecommunication networks
Remote monitoring Smart services Allmendinger and Lombreglia Aerospace, transport, energy,
technology: terminologies (2005), Reinartz and Ulaga (2008) medical and industrial equipment
used and application Teleservices Lee (1998), Küssel et al. (2000) Machine tools and office
industry equipment

3.2 Examples of remote monitoring technology supporting servitized strategy

While relatively numerous, examples of remote monitoring technology supporting
servitized strategy found in the literature are very superficial and limited. We think
this is a cause for concern, as using some of the real-world examples of companies who
excel in applying this technology as case studies becomes a challenge and important
barrier in shedding more light on this emerging yet important topic. Thus, Grubic et al.
(2011) found that almost 10 per cent of UK-based manufacturers they surveyed are
applying remote monitoring technology and that this trend is clearly growing.
According to their findings, this technology is usually deployed onto products which
are mechanical or electromechanical in nature and with a long lifecycle and high
complexity. Most of the companies operate in the aerospace, defence, marine,
electronics, power, oil and gas and energy industry sectors. Similar is found in
Biehl et al. (2004) when they state that applications of remote monitoring technology
are predominately in the areas of office equipment, building and facility maintenance,
computer maintenance and control of IT and telecommunications networks.
Like Küssel et al. (2000) before them, Biehl et al. (2004) have also recognised the
machine tool industry as an important application area of remote monitoring
technology. In reporting findings from their case study research, Brax and
Jonsson (2009) refer to two manufacturers, one producing hydraulic motors and the
other turbines. Without referring to any example in particular, these researchers
point to a broad spectrum of industries (aerospace, defence, marine, electronics, power,
oil and gas, energy, office equipment, building and facility maintenance, computer
maintenance, control of IT and telecommunications networks, machine tools and
industrial equipment) which have adopted remote monitoring technology in service
delivery. This suggests the potential that remote monitoring technology holds for
supporting innovative value propositions.
 More concrete examples are found in Lee (1998), Wise and Baumgartner (1999), Remote
Davies (2004), Kuschel and Ljungberg (2004), Allmendinger and Lombreglia (2005), monitoring
Jonsson (2006), Jonsson et al. (2008), Reinartz and Ulaga (2008), Gremyr et al. (2010), and
Bandinelli and Gamberi (2012). These examples are from the following industries: technology
aerospace, industrial equipment and machinery, transport, marine, office equipment
and others. Similar to Küssel et al. (2000) and Biehl et al. (2004), Lee (1998) has also
recognised the machine tool sector as an important application area and has listed 109
several American machine tool companies (Giddings and Lewis, Bridgeport, Saginaw
Machine Tools, Cincinnati Milacron and Adept Technology) which have developed
technology for remote monitoring. Surprisingly, he also states that remote monitoring
is more widely used by some office equipment companies, for example, Canon,
Eastman Kodak, Mita, Pitney Bowes, and Xerox, than by machine tools companies.
Wise and Baumgartner (1999) reported on how Honeywell developed Airplane
Information Management System (AIMS) used for the in-flight monitoring of engines
and system performance. In addition to the same example, Allmendinger and
Lombreglia (2005) further report the examples of GE jet engines and locomotives, ABB
power plant equipment, Siemens with its medical equipment and Heidelberger
Druckmaschinen, a maker of high-end printing presses. All these companies have
developed and adopted remote monitoring technology to support their venture into the
service business. Davies (2004) reports how Alstom and Ericsson use monitoring
technology to support their service offers. Alstom, a manufacturer of trains, uses
monitoring technology to monitor a fleet of Pendolino trains operated by Virgin Trains
in the UK, while Ericsson has developed a 24-hour technical capability to remotely
monitor a customer’s mobile phone network and provide real-time improvements
accordingly. The examples of MacGregor Cranes, a manufacturer of shipboard cranes
and Volvo Penta, a manufacturer of engines for leisure boats, work boats and power
generating industrial equipment from the marine industry are reported in Jonsson
(2006), Jonsson et al. (2008), and in Kuschel and Ljungberg (2004), respectively. Reinartz
and Ulaga (2008) and Gremyr et al. (2010) report how SKF, a manufacturer of bearings,
have developed condition monitoring technology to support their service business and
their venture into more complex performance based contracting. Finally, Bandinelli
and Gamberi (2012) have introduced results from a case study of a GE oil and gas
company on the use of product-service system design methodologies.
Based on a review of literature discussing examples of remote monitoring
technology supporting service delivery and servitized strategy, the following finding is
made:
Finding 4. Although relatively numerous, examples of real-world companies using
remote monitoring technology to support their service business models
found in literature are dealt with and presented in a very superficial
manner. Very little detail is presented that may provide some insights
into the what, how, and why of those applications. Nevertheless, the
number and variety of different industry sectors applying remote
monitoring technology are encouraging and suggest the great potential
this technology holds for supporting innovative value propositions.

Table III gives a summary of examples of remote monitoring technology supporting

servitized strategy found in the literature.
JMTM
Paper Example Industry sector
25,1
1. Lee (1998) Giddings and Lewis, Bridgeport, Machine tools, office equipment
Saginaw Machine Tools,
Cincinnati Milacron, and Adept
Technology for machine tools;
110 Canon, Eastman Kodak, Mita,
Pitney Bowes and Xerox for office
equipment
2. Wise and Baumgartner Honeywell – AIMS Aerospace
(1999)
3. Küssel et al. (2000) No details provided Machine tools
4. Biehl et al. (2004) No details provided Office equipment, building and
facility maintenance, computers
and telecommunication networks
5. Davies (2004) Alstom and Ericsson Transport and telecommunication
networks
6. Kuschel and Ljungberg Volvo Penta Marine
(2004)
7. Allmendinger and Honeywell (AIMS), GE jet engines Aerospace, transport, energy,
Lombreglia (2005) and locomotives, ABB power plant medical, industrial equipment
equipment, Siemens medical
equipment and Heidelberger
Druckmaschinen printing presses
8. Jonsson (2006) MacGregor Cranes Marine
9. Jonsson et al. (2008) MacGregor Cranes Marine
10. Reinartz and Ulaga SKF Industrial equipment
(2008)
11. Brax and Jonsson (2009) No details provided Industrial equipment
12. Gremyr et al. (2010) SKF Industrial equipment
Table III. 13. Grubic et al. (2011) No details provided Aerospace, defence, marine,
Examples of remote electronics, power industry, oil and
monitoring technology gas and energy
supporting servitized 14. Bandinelli and Gamberi Nuovo Pignone S.p.a., GE oil and Oil and gas
strategy (2012) gas

3.3 Benefits of remote monitoring technology

Analysis of benefits is divided into two parts: benefits for the customer and benefits for
the manufacturer.
3.3.1 Benefits for the customer. According to literature reviewed, remote monitoring
technology benefits the customer mainly through minimization of downtime and
transfer of risks to the manufacturer. Minimization of downtime is manifested in several
ways as reported in Küssel et al. (2000), Jonsson et al. (2008), and Laine et al. (2010).
Küssel et al. (2000) report that the customer benefits from saving time for error diagnosis
and repair. The error or fault can be detected remotely and all the activities necessary for
its fast resolution, i.e. bringing the right spare parts and tools, can be prepared for in
advance, which results in minimization of downtime. Similar is observed in the study of
MacGregor Cranes by Jonsson et al. (2008). In addition to minimization of operational
hold-ups for their customers, Jonsson et al. (2008) noticed that by using remote
monitoring technology the manufacturer benefits from getting direct access to
operational data instead of receiving potentially erroneous and/or misleading incident
descriptions from the customer. This has helped MacGregor Cranes to access the correct Remote
data which, in turn, has enabled them to resolve the error in a timely manner and further monitoring
minimize downtime. By collecting engine hours and production data, the machinery
manufacturer studied by Laine et al. (2010) helped its customers to optimise the usage technology
and the maintenance of their machinery.
All the examples of downtime minimization reported thus far are due to faster fault
resolution once the fault occurs. This is, therefore, a reactive approach in addressing 111
downtime minimization. But the biggest potential of remote monitoring technology
rests in preventing machinery breakdown, hence using the technology in proactive
way. The potential to act proactively in stopping or preventing breakdowns, means
manufacturers are able to deliver more attractive value propositions to their customers.
The transfer of risks and reduction of surprises that accompany this are such value
propositions. The major risks here are non-availability of the product and its
suboptimal performance. Allmendinger and Lombreglia (2005) state that services
enabled by remote monitoring technology create very appealing value for customers,
i.e. value of removing unpleasant surprise from their business. Similar is observed by
Brax and Jonsson (2009) who concluded that customers emphasise risk reduction and
transfer of risks to the manufacturer, mainly in the form of technological and
operational risks, rather than cost savings. Unfortunately no examples have been
provided of how remote monitoring technology is exactly contributing to reducing
technological and operational risks and what is meant there; hence we need to take this
as tentative and potential benefits that demand further research and confirmation.
Finally, Gremyr et al. (2010) characterise the benefits of services enabled by remote
monitoring solutions of SKF in terms of “taking responsibility” and “creating security”.
The former captures SKF’s shift towards performance-based contracts where the shift
and the value from it, as seen by a manager in SKF, is described as (p. 166):
[. . .] not only saying that it is good if you do it like this, but taking responsibility for it; we
guarantee fewer stops. That was the revolutionary step, not only recommending, as we had
done for many years, but taking responsibility.
3.3.2 Benefits for the manufacturer. According to survey conducted by Grubic et al.
(2011), factors that drive manufacturers to develop and adopt remote monitoring
technology are: to improve performance of their products and their availability, to
improve maintenance efficiency and effectiveness and differentiate from competitors’
offers. To a certain extent the benefits of remote monitoring technology for
manufacturer can be looked for in the drivers or motivation of adoption. In addition to
this the review of literature revealed the following three benefits: cost reduction, insight
into customers’ needs and feedback for R&D that enables learning and knowledge
creation.
Remote monitoring technology enables observation of products from a distance.
By analyzing data on status, use and health of products acquired in this way not only
helps to create new services centred on the analysis of this data but to reduce the cost of
service as well. Brax and Jonsson (2009) argue that remote monitoring has enabled
development of “remote field service” by which predictive maintenance is enabled
through direct information exchange from the machinery being monitored, without
customer contact. By enabling remote diagnosis of the machinery, remote monitoring
technology brings reduction of the cost of technical service to the manufacturer
JMTM (Laine et al., 2010). Nevertheless, it is important to stress that this technology does not
25,1 and has not replaced traditional field service (Brax and Jonsson, 2009).
The other remaining benefits, i.e. insight into customers’ needs and
feedback for R&D that enables learning and knowledge creation, are interrelated.
Data about the installed base collected through remote monitoring technology,
according to Allmendinger and Lombreglia (2005), makes performance of products and
112 behaviours of customers visible as never before. This gives manufacturers insight into
customers’ needs and R&D feedback. Laine et al. (2010) report how manufacturer and
provider of remote monitoring enabled services view this technology as a platform to
learn about customers and their business and about the environment that surrounds
their machinery. They also report how this data helped the manufacturer to examine
the “early signs” related to the customers. Westergren (2011) reports the experiences
of a drive systems manufacturer who was able to build a historical database of
its installed base. This helped them to better understand their customers and
their business which, in turn, is seen as valuable insight for service innovation.
The historical database was also valuable to the manufacturer in their product
development. Collecting data from many machines around the globe and storing this in
one place enables comparison between different machines and settings ( Jonsson and
Holmström, 2005). According to Jonsson and Holmström (2005), this data helps the
manufacturer to paint a richer picture of how their products are used in different
settings and if there are any common problems the manufacturer can identify. This
knowledge can then be used to make better and more reliable calculations about
predictions and to inform improvement and/or new product development initiatives.
Laine et al. (2010) even argue that remote monitoring technology can be seen as an
investment into R&D of the manufacturer. Even though the authors cited above are
unanimous about the potential of remote monitoring technology in gaining insight into
customers’ needs and feedback for R&D, it is still not clear how this is achieved and
what elements are essential for the success.
Findings on the benefits of remote monitoring technology for customers and
manufacturers can be summarized as follows:
Finding 5. Remote monitoring technology benefits the customer mainly through
minimization of downtime and transfer of risks to the manufacturer.
Main risks identified are: non-availability of the product and its
suboptimal performance, technological and operational risks. It is still
not clear how remote monitoring technology mitigates technological and
operational risks and what is meant by this hence, more research is
necessary before we can confirm these benefits.
Finding 6. The key benefits for the manufacturers are: improving performance and
availability of its products, cost reduction, gaining insight into
customers’ needs and getting feedback for R&D that enables learning
and knowledge creation. It is still not clear how remote monitoring
technology can be used to gain insight into customers’ needs and how
this data can be used in R&D and what factors are essential for this.

Table IV gives a summary of findings about the benefits of remote monitoring

technology for customers and manufacturers.

Paper
1. Küssel et al. (2000)
2. Allmendinger and Lombreglia (2005) Removing unpleasant surprises (C), makes performance of
3. Jonsson and Holmström (2005)
4. Jonsson et al. (2008)
5. Brax and Jonsson (2009)
6. Gremyr et al. (2010)
7. Laine et al. (2010)
8. Grubic et al. (2011)
9. Westergren (2011)
Remote
Benefits for the customer (C) and/or manufacturer (M)
monitoring
Saves time in the error diagnosis and repair (C) technology
products and behaviours of customers visible (M)
Enables comparison between different machines and
settings which helps in making better and more reliable 113
predictions of the remaining useful life, informs
improvement and/or new product development
initiatives (M)
Minimization of operational hold-ups (C), getting direct
access to operational data which reduces likelihood of
receiving potentially erroneous and/or misleading incident
descriptions from the customer (M)
Risk reduction and transfer of risks to the manufacturer (C),
enables remote field services (M)
Taking responsibility and creating security for
customers (C)
Enables the customers to optimise the usage and the
maintenance of their machinery (C), reduces the cost of
technical service and serves as platform to learn about
customers and their business and about the environment
that surrounds their machinery (M)
Improves performance and availability of products,
improves maintenance efficiency and effectiveness, and
differentiates from competitors’ offers (M)
Enables creation of a historical database of installed base
which, in turn, helps the manufacturer to gain better Table IV.
understanding of customers and their business as well as of Benefits of remote
their products in the field (M) monitoring technology

3.4 Challenges of using remote monitoring technology

The analysis of papers on the challenges which manufacturers face when using remote
monitoring technology to support servitized strategy resulted in identifying four
factors. The factors are:
(1) limitations of remote monitoring technology;
(2) value related challenges;
(3) challenges of changing mindset; and
(4) surveillance and ethical challenges.

3.4.1 Limitations of remote monitoring technology. It was mentioned before that the
application of remote monitoring technology is almost four decades old yet, in some
areas, the technology is still not mature enough and surrounded by challenges. Thus,
Biehl et al. (2004) and Kuschel (2009) refer to the lack of standardisation that would
support sharing and integration of sensor data among different manufacturers.
Manufacturers still use proprietary standards and make sensors that are not
compatible. This may explain the findings of one of the two case studies conducted by
Brax and Jonsson (2009) where they identified that the case company struggled with a
customer’s information systems, which resulted in manual handling of data between
JMTM the systems. The biggest challenge is related to the limitations of remote monitoring
25,1 technology itself. As Jonsson et al. (2008) argue the remote monitoring technology can
only detect what the technology is designed to detect and there will always be faults
that are beyond its reach. They also say that the technology itself is a potential source
of error. These limitations may in turn justify scepticism towards remote monitoring
technology encountered in studies by Kuschel and Ljungberg (2004) and Westergren
114 (2011). Kuschel and Ljungberg (2004) identified such scepticism among service
technicians who regarded remote monitoring solutions deployed by their company as
unreliable, complex and overrated. While Westergren (2011, p. 232) reports sentiments
from a maintenance worker who said:
I am a bit sceptical [of new technology]. What happens to hands-on knowledge when
everything is controlled by computers?
The scepticism reported in this excerpt may well be due to the gap between physical
and digital worlds as reported by Jonsson and Holmström (2005) and Jonsson et al.
(2009). When using remote monitoring technology, a gap arises between a local group
which uses and maybe maintains machinery and a remote group that monitors the
machinery. The former is acting in the physical world of machinery and its
surrounding environment and the latter in the digital world of collected and analyzed
data. If this gap is not bridged, according to Jonsson and Holmström (2005), then the
maintenance collective, consisting of these two groups, will not work well. An example
of this situation is captured in a phenomenon they call remote closeness and local
physical distance. Remote closeness happens when physically dispersed pieces of
equipment and people get closer by means of remote monitoring technology and the
problem occurs when local and remote groups move their interaction completely in
the digital world of equipment. Although the equipment may be constantly monitored,
the data collected is only on several parameters which give a limited and reduced
picture of reality. This data cannot replace but only complement other data collected by
the local group via more conventional means and senses of seeing, hearing and feeling
the equipment and its surrounding environment and operating context. As said before,
remote monitoring technology can only detect what the technology is designed to
detect and input from an operator or experienced engineer is required to detect issues
that are outside its reach. Therefore, there is an element of contextual information that
cannot be acquired via sensors and which plays a very important role in delivering
services promised by remote monitoring technology. This sheds light on a serious
limitation of this technology and points to the need to find a way to address it. In the
study reported by Jonsson and Holmström (2005), the situation was further
complicated by the customer who stopped walking past the machinery and collecting
the additional contextual data as he completely relied on the data from the limited
digital world and analysis services from the remote group. This was termed local
physical distance since the local team deemed the collection of contextual data
unnecessary and shifted the responsibility for the health status of machinery to the
remote team. This also created an impression of information asymmetry ( Jonsson et al.,
2009) since the local group felt they were excluded from the analysis. In turn, this led
the local group to mistrust the analysis and services provided by the remote group.
To avoid such situations Jonsson and Holmström (2005) propose establishing a stable
relationship between the remote service provider and customer in which technology to
monitor machinery would be used in parallel with the local responsiveness and support Remote
from the customer. This calls for a clear division of responsibilities and roles centred on monitoring
the premise that the value from remote monitoring technology can only be reaped if the
exploitation is done in a collaborative manner. The service provider using the remote technology
monitoring technology cannot collect the same data as the customer and the customer
cannot collect the same detailed data as the service provider. Services enabled by
remote monitoring technology should not be perceived as replacing the involvement of 115
a local maintenance team, either this team being the customer or the service provider as
is the case in power-by-the-hour contracts, but only complementing this team. Both
sides need to be involved and should cooperate together. This was also recognised by
Kuschel and Ljungberg (2004) who said that there is a mutual interest to involve the
customer in the diagnostic process and that the customer wants to participate in this
process to learn more. On the other hand, the technician is aware that he needs to
involve the customer because the customer knows how the problem appeared, which is
essential for defining the problem and finding a solution. These ideas are very similar
to the proposition of the customer as co-creator or co-producer of value as formulated in
service-dominant logic (Vargo and Lusch, 2004, 2008). Unfortunately, apart from
studies reported by Kuschel and Ljungberg (2004), Jonsson and Holmström (2005), and
Jonsson et al. (2009) very little is known about challenges that surround the use of
remote monitoring technology in the context of value co-creation:

Finding 7. Literature suggests that limitations of remote monitoring technology

(lack of standardisation to support sharing and integration of sensor
data, scepticisms about its reliability, the gap between physical and
digital worlds, remote closeness and physical distance) can be
addressed only if realisation of its benefits is recognised as a value
co-creation project between the customer and manufacturer.
Unfortunately, very little is known about the challenges and enablers
that surround the use of remote monitoring technology in such a
collaborative context.

3.4.2 Value related challenges. Getting the customer to participate as a co-producer of

value from remote monitoring technology depends initially on his view about the
benefits of this technology and the involvement of his business. The customer must be
clear on how the technology and the services enabled by it will create value for him.
When presenting our findings from the review of literature on the benefits for
customers, it was suggested that these benefits are mainly in the areas of minimization
of downtime and transfer of risks to the manufacturer. Yet, the literature review
reveals that customers are still not convinced of the benefits of remote monitoring
technology enabled services and manufacturers have not been very successful in
cashing in on the technology’s potential. In presenting results from a survey of German
machine tool manufacturers and their experiences of providing remote monitoring
services, Küssel et al. (2000) concluded that the most severe problem was to convince
the users of their benefits. Similar was revealed by Westergren (2011) who found that
neither the value proposal nor value creation process was clearly communicated to the
customer. Westergren (2011) argues that the remote monitoring service provider failed
to articulate the value proposition and since this was missing, the value could not be
JMTM co-created. Analysing a survey of UK manufacturers regarding the adoption and use of
25,1 remote monitoring technology, Grubic et al. (2011) found that more than half of
adopters have experienced a gap between potential and realized benefits. One of the
companies studied by Brax and Jonsson (2009) reported that the selling of remote
monitoring technology enabled services was not selling as they sold fewer contracts
than expected. Similar was found in a case study conducted by Laine et al. (2010) who
116 reported that the investment in the technology had not yielded any revenues. Even
internally, manufacturers are struggling to articulate and understand what the benefits
for customers are or may be. Thus, Brax and Jonsson (2009) say that sales
organizations of both cases were confused about the benefits of remote monitoring
technology and tried to avoid promoting it. Similar was found by Gremyr et al. (2010)
as they reported that sales staff could not identify the value of the services enabled by
remote monitoring technology:
Finding 8. Examples found in the literature clearly point to the fact that
manufacturers are still struggling to articulate value propositions from
remote monitoring technology that would be appealing to customers.
More research is necessary to understand and address this problem.

3.4.3 Challenges of changing mindset. As reported in limitations above, reaping

benefits and value from remote monitoring technology could only be achieved if the
exploitation is perceived and approached as a value co-creating project. This suggests
needed changes in the mindset and the way that the involved parties work together.
Grubic et al. (2011) argue that realizing all the potentials of remote monitoring
technology calls for tackling a range of challenges, most of which fall into the business
and cultural domains rather than to advances in the technology. Thus, Allmendinger
and Lombreglia (2005) argue that reaping benefits from this technology and
translating them into value propositions that are attractive to customers is not
primarily a technical challenge. The biggest challenge for them is getting senior
management to adopt a service perspective on business and think differently about the
purpose of their company. They argue that senior management should overcome the
product-centric mindset. The challenge of changing mindset exists even on lower levels
in organizations. According to Brax and Jonsson (2009) one of the reasons for the
failure of remote monitoring enabled services in companies that they studied is that
this was approached as a technical rather than business development project.
Customer needs and preferences were not properly addressed and customer specific
solutions were perceived as installation projects. This development was mainly carried
out by technical staff that naturally focused more on technical aspects rather than
service aspects. Technical staff even overlooked field technicians as a possible source
of information in technology development. Perhaps because of this, technicians did not
use the technology which led customers to question its value (Brax and Jonsson, 2009).
Related to the challenge of articulating the value of remote monitoring technology, the
example from Reinartz and Ulaga (2008) and their study of Heidelberger printing
presses shows the importance of changing mindset. One hour of downtime in a print
shop can cost thousands of Euros, so they offered remote monitoring technology
enabled services which were priced below this amount, but the customers were not
interested. The problem was that Heidelberger’s sales force and field technicians were
not trained and versed enough to discuss value propositions with production managers
who are best positioned to appreciate the overall implications of remote Remote
monitoring services. Until then their interaction was mainly with staff from monitoring
procurement that tended to focus on cost and those from in-house maintenance who
probably viewed the service as a threat to their jobs: technology
Finding 9. According to research reviewed here application and commercial
exploitation of remote monitoring technology should be accompanied
by wider organisational changes yet very little is known about the 117
identity and nature of those changes.

3.4.4 Surveillance and ethical challenges. Monitoring the health and condition of
products in the field helps manufacturers to mitigate some of the risks of more complex
product-service offers, such as performance-based contracts. Yet by embedding this
technology into their products it allows manufacturers to indirectly monitor the users.
Besides monitoring the health and condition of a product the technology also provides
insights into how the product is used. This was already mentioned in the section that
deals with benefits for manufacturers, where getting insights into customers’ needs
and their business was recognized as one of the key benefits of remote monitoring
technology. This ability not only brings benefits to the manufacturer but it also comes
with certain surveillance and ethical consequences. Jonsson (2006) sums up these
consequences into the concept of embedded panopticon. The concept further brings
three issues. First, remote monitoring technology is usually embedded into products so
users, if not explicitly informed, may not be aware that they are being monitored.
In respect to this issue, Jonsson (2006) found that remote monitoring technology
suppliers and developers are aware of the surveillance possibility yet they push this
into the background. Second issue deals with the visibility of what is being monitored.
Even if the user is aware that he is being monitored he may not know what is being
monitored. Third, the aim and purpose of monitoring may also be hidden to the user.
These issues are very important for both supplier and customer. The embedded
monitoring possibility may challenge their business ethics and impact the business
relationship so they should address the ethical questions from the start ( Jonsson, 2006).
Addressing such questions becomes even more important when we know that creation
of value from remote monitoring technology should be approached as collaborative
process between both parties. Therefore, surveillance and ethical consequences of
using remote monitoring technology are highly sensitive topics which should not be
neglected but treated seriously. Although some initial steps have been made towards
providing guidelines to address the privacy concerns in the context of “invisible”
computers (Lahlou et al., 2005), the research on understanding the surveillance and
ethical consequences of remote monitoring technology in the context of service oriented
business strategy is very limited, almost absent:
Finding 10. Remote monitoring technology can be used for R&D purposes because
it enables learning and better understanding of customers’ needs and
their business, unfortunately the same capability has serious
surveillance and ethical implications and consequences which are
almost completely overlooked both by research and practice.

Table V presents a summary on challenges of using remote monitoring technology

found in the literature while Table VI provides an overview of all findings made here.
JMTM
Factor Example
25,1
Limitations of Lack of standardisation to support sharing and integration of sensor
remote monitoring data between different manufacturers (Biehl et al., 2004; Kuschel, 2009)
technology Manual handling of data (Brax and Jonsson, 2009)
Remote monitoring technology can only detect what the technology is
118 designed to detect, the technology itself is a potential source of error
(Jonsson et al., 2008)
Scepticism towards remote monitoring technology (Kuschel and
Ljungberg, 2004; Westergren, 2011)
The gap between physical and digital worlds which may lead to a
phenomenon of remote closeness and physical distance. This results
with the perception of the local team about delegation of
responsibilities for the health of equipment to the remote team,
information asymmetry, and mistrust into the analysis provided by
the remote team ( Jonsson and Holmström, 2005; Jonsson et al., 2009)
Value related Convincing the users of the benefits of remote monitoring technology
challenges (Küssel et al., 2000)
Failure to articulate the value proposition of remote monitoring
technology (Westergren, 2011)
Gap between potential and realized benefits (Grubic et al., 2011)
Problems with selling remote monitoring technology enabled services
(Brax and Jonsson, 2009; Laine et al., 2010) and confusion of internal
sales staff about the benefits of this technology for customers
(Brax and Jonsson, 2009; Gremyr et al., 2010)
Challenges of Getting senior management to adopt a service perspective on business
changing mindset and think differently about the purpose of their company
(Allmendinger and Lombreglia, 2005)
Sales force and field technicians were not trained and versed enough to
discuss more complex value propositions enabled by remote
monitoring technology (Reinartz and Ulaga, 2008)
Remote monitoring technology was approached as a technical rather
than business development project (Brax and Jonsson, 2009)
The potential of remote monitoring technology calls for tackling a
range of challenges most of which fall into business and cultural
domains rather than to advances in the technology (Grubic et al., 2011)
Surveillance and Embedding remote monitoring technology into products allows
ethical challenges manufacturers to indirectly monitor the users. This brings certain
surveillance and ethical consequences which Jonsson (2006)
summarised into the concept of embedded panopticon. The concept
Table V. brings three issues. First, the users may not be aware that they are
Challenges of using being monitored. Second, even if they are aware of this they may not
remote monitoring know what is being monitored. Third, the aim and purpose of
technology monitoring may be hidden to the users

4. Discussion and conclusion

Servitization centres on the transfer of risks from the customer to the manufacturer or
service provider. The biggest risks are non-availability and suboptimal product
performance. By providing real-time information about current and predicted health of
a product in the field, remote monitoring technology can mitigate some of those risks.
Although recognised as one of the key enablers of servitization, the mainstream
servitization research community has treated this matter in a rather colloquial manner.
 Remote
Finding Content
monitoring
Finding 1 A review of literature reveals that the research into the role and contribution of technology
remote monitoring technology in servitized strategy is a relatively new and under
researched area, with only a handful of relevant research contributions
Finding 2 There is a great deal of diversity in terminology used when referring to the
application of remote monitoring technology to support service delivery, 119
examples include: teleservices, remote diagnostics, smart services and
diagnostics and prognostics; where all, in essence, refer to the same principle
Finding 3 The key principle behind remote monitoring technology is a combination of
software and hardware technologies which enable remote collection of data about
the performance and usage of a product in the field to determine its current and
predicted condition and health
Finding 4 Although relatively numerous, examples of real-world companies using remote
monitoring technology to support their service business models found in
literature are dealt with and presented in a very superficial manner. Very little
detail is presented that may provide some insights into the what, how, and why of
those applications. Nevertheless, the number and variety of different industry
sectors applying remote monitoring technology are encouraging and suggest the
great potential this technology holds for supporting innovative value
propositions
Finding 5 Remote monitoring technology benefits the customer mainly through
minimization of downtime and transfer of risks to the manufacturer. Main risks
identified are: non-availability of the product and its suboptimal performance,
technological and operational risks. It is still not clear how remote monitoring
technology mitigates technological and operational risks and what is meant by
this hence, more research is necessary before we can confirm these benefits
Finding 6 The key benefits for the manufacturers are: improving performance and
availability of its products, cost reduction, gaining insight into customers’ needs
and getting feedback for R&D that enables learning and knowledge creation. It is
still not clear how remote monitoring technology can be used to gain insight into
customers’ needs and how this data can be used in R&D and what factors are
essential for this
Finding 7 Literature suggests that limitations of remote monitoring technology (lack of
standardisation to support sharing and integration of sensor data, scepticisms
about its reliability, the gap between physical and digital worlds, remote
closeness and physical distance) can be addressed only if realisation of its
benefits is recognised as a value co-creation project between the customer and
manufacturer. Unfortunately, very little is known about the challenges and
enablers that surround the use of remote monitoring technology in such a
collaborative context
Finding 8 Examples found in the literature clearly point to the fact that manufacturers are
still struggling to articulate value propositions from remote monitoring
technology that would be appealing to customers. More research is necessary to
understand and address this problem
Finding 9 According to research reviewed here application and commercial exploitation of
remote monitoring technology should be accompanied by wider organisational
changes yet very little is known about the identity and nature of those changes
Finding 10 Remote monitoring technology can be used for R&D purposes because it enables
learning and better understanding of customers’ needs and their business,
unfortunately the same capability has serious surveillance and ethical
implications and consequences which are almost completely overlooked both by Table VI.
research and practice Summary of findings
JMTM Hence, the aim of this paper was to identify and critically analyse research
25,1 contributions in the area of remote monitoring technology and servitization. As such it
qualifies as the first attempt in consolidating research relevant to this topic.
Our literature review reveals very limited interest in this phenomenon from the
mainstream servitization research. Twenty papers were identified and reviewed, but
only a handful (Kuschel and Ljungberg, 2004; Allmendinger and Lombreglia, 2005;
120 Jonsson et al., 2008; Brax and Jonsson, 2009; Kuschel, 2009; Grubic et al., 2011;
Westergren, 2011) address the topic of using remote monitoring technology to support
servitized strategy more explicitly. This shows that research on remote monitoring
technology as enabler of servitization is very limited. Therefore, we encourage
researchers to make more efforts towards contributing to this important domain.
By reflecting on the findings of our analysis we have identified two broad areas that
demand research. These are:
(1) research to further our understanding about the role and support of remote
monitoring technology in service-oriented strategy; and
(2) research into the potential of this technology to enable service and business
model innovation.

In respect to the first area, specific avenues that require more research and contribution
are as follows:
.
Although there are significant examples of specific companies that use remote
monitoring technology to support their servitized strategies, very little detail is
provided about those examples and state of practice in this area. For example, it
would be very helpful to provide a detailed study or studies of industrial
applications of remote monitoring technology. Further to this, a survey of
industrial practice, similar to the one done by Grubic et al. (2011), would be a very
useful source. Such survey would investigate the examples, extent, motivations,
benefits and challenges of deploying remote monitoring technology in an
industry sector, country, continent or the whole world. Such studies would also
help to build better understanding on some of the issues introduced below.
.
Our study suggests that the benefits of remote monitoring technology and value
propositions of servitized business model have certain interrelatedness and
interdependence. Namely, it may not be all too clear to determine what benefits
what and what came first. For example, has the innovative business model that
centres on value propositions of taking risks and responsibilities for product
operation been motivated by promise and potential of remote monitoring
technology to reduce risks of non-availability and suboptimal product
performance or have the two somehow co-evolved together? Therefore, more
research is necessary to better explain this relationship and determine the role
and benefits of remote monitoring technology in supporting service-oriented
business models.
.
Another issue that has emerged from our review is about benefits of remote
monitoring technology. This includes benefits for customers and manufacturers.
For example, it was mentioned that remote monitoring technology can mitigate
technological and operational risks but it is still not clear what is meant by these
risks, and how and why it contributes in their mitigation. Similarly, it is
 suggested that remote monitoring technology can help in gaining insight into Remote
customers’ needs as well as in getting feedback for R&D that could enable monitoring
further learning and knowledge creation. But it is still not clear how remote
monitoring technology can be used to achieve this and what factors are essential technology
for this. We could here also add the challenge of articulating, both internally and
for the customer, value propositions from remote monitoring technology as
reported in Finding 8. Hence, there is definitely a great need to further our 121
understanding about benefits of this technology and how they support and align
with servitized value propositions. This could be achieved by different
methodologies. For example, surveys of industrial practice, as those mentioned
before, can be used to identify key groups of benefits while in-depth empirical
case studies of known examples could help to surface their details and any
idiosyncrasies.
.
Area which would benefit from such studies is study of contextualising remote
monitoring technology as a value co-creation project. Our study has revealed that
some of the limitations of remote monitoring technology, for example, scepticism
about its reliability, the gap between physical and digital worlds, remote
closeness and physical distance, all of which can be addressed only if realisation
of its benefits is approached as a value co-creation project between the customer
and manufacturer. Unfortunately, we have barely scratched the surface of this
important aspect of value co-creation in servitization. Almost nothing is known
about this phenomenon, in terms of challenges and enablers that surround the
use of remote monitoring technology in such collaborative contexts.
. As we approach the realisation of the potential of remote monitoring technology
as a value co-creation project, it will most likely demand certain organisational,
business and management changes in both customer and manufacturer,
i.e. service provider. This too is suggested by our study, which implies that
application and successful exploitation of remote monitoring technology should
be accompanied by wider organisational changes. This resonates with
conclusions from technology management research which shows that
technology, no matter how effective or new, will not deliver on its potential
unless we consider the wider context in which it is situated. Yet very little is
known about other factors in the wider application context that complement and
thus increase the value of remote monitoring technology. Similarly, we know
little about factors that prevent realisation and thus decrease this value.
.
Finally, our study has identified an almost completely overlooked issue, by both
research and practice, of the surveillance aspect of remote monitoring technology
and its ethical implications and consequences. If we take into account the
conclusion of approaching remote monitoring technology as a value co-creation
project, addressing this issue becomes of utmost importance for creating an
environment that would stimulate and enable such collaborative effort.

The research challenges or avenues introduced above imply that our understanding of
the role, support and contribution of remote monitoring technology in service delivery
and strategy is still in its infancy. Far more work would have to be invested to move
our understanding of this phenomenon beyond this stage.
JMTM Variety and the number of industry sectors in which remote monitoring technology
25,1 is used to support servitized strategies as reported in Table III is considerable. This
information suggests the importance and potential of this technology. Namely, one of
the findings from the study conducted by Grubic et al. (2011) reveals that more than
half of companies they surveyed characterises capability enabled by remote
monitoring technology as very relevant for their future success and competitiveness.
122 This implies that industry has positive expectations about the potential of remote
monitoring technology not only to support existing value propositions but to enable
new business models and service innovation. Unfortunately, our understanding about
how remote monitoring technology can be used as a platform for further service and
business model innovation and what factors are essential for this is very limited.
Therefore, we urge researchers to engage in this important topic which can only
further our knowledge about remote monitoring technology, servitization and service
and business model innovation.

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Corresponding author
Tonci Grubic can be contacted at: t.grubic@cranfield.ac.uk

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