European Journal of Information Systems

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Exploring the value of IoT data as an enabler

of the transformation towards servitization: an
action design research approach

Kuan-Lin Chen, Astrid Lassen, Chen Li & Charles Møller

To cite this article: Kuan-Lin Chen, Astrid Lassen, Chen Li & Charles Møller (2022):
Exploring the value of IoT data as an enabler of the transformation towards servitization:
an action design research approach, European Journal of Information Systems, DOI:
10.1080/0960085X.2022.2046515

To link to this article: https://doi.org/10.1080/0960085X.2022.2046515

Published online: 24 Mar 2022.

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EUROPEAN JOURNAL OF INFORMATION SYSTEMS
https://doi.org/10.1080/0960085X.2022.2046515

EMPIRICAL RESEARCH

Exploring the value of IoT data as an enabler of the transformation towards

servitization: an action design research approach
Kuan-Lin Chen , Astrid Lassen, Chen Li and Charles Møller
Department of Materials & Production, Faculty of Engineering and Science, Aalborg University, Denmark

ABSTRACT ARTICLE HISTORY

Servitization is a well-recognised phenomenon in the manufacturing industry. Business poten­ Received 23 September 2020
tials are demonstrated mainly from the marketing perspective on servitization. However, Accepted 30 January 2022
increased digitalisation makes servitization interesting to other research areas. This paper KEYWORDS
applies the resource-based view (RBV) to argue how to value the data and explore its potential Internet of Things (IoT);
and impact on servitization. We examine the evolving role of information technology (IT), digital servitization; digital
particularly of the Internet of Things (IoT), and the role of data in the servitization journey. This transformation; action
research is based on a longitudinal study of a product-oriented manufacturing company’s design research (ADR);
transformation towards servitization. The engagement with the company also includes the business system; resource-
development of an IT platform that consolidates IoT and enterprise data, which enables based view (RBV)
managers to explore new data-based insights. Our goal is to investigate the organisation
and in particular cross-functional effects of data-based insights and their impact on supporting
strategic decision-making. The action design research (ADR) approach is applied to unfold the
servitizing activities inside the organisation and extract the lesson learned into the joint
domains of servitization and information systems research. First, we argued that exploring
the value of data is becoming a more complex process. Rather than having one design
perspective, technical concerns, business considerations, and operational purpose must be
aligned to frame the value of data to support decision-making. Second, we discuss the
emerging managerial implications, especially the role of IT in the transformation. A cross-
functional team is a prerequisite to exploring complex transformation projects. Thus, managers
must recognise the problematic situation and bootstrap the available organisational resources.
Finally, we provide empirical evidence on how scholars and practitioners can address mutual
interests by applying the ADR approach to a transformation project. In summary, servitizing a
product-centric manufacturing firm to have a digital services business model is a transforma­
tion involving complex social and organisational relations. This study advocates resource-
based analysis as a lens and demonstrates how IT and data as heterogeneous and imperfectly
mobile resources create value for a product-oriented manufacturing company. However, a
critical question remains on how to manage the expanding operational condition of a servitiz­
ing organisation and its business system to sustain its competitive advantage and win the
digital market.

1. Introduction Manufacturing firms, which have the strength to

Servitization is a well-recognised phenomenon in the
manufacturing industry. One of the critical motivations
for manufacturing firms to continue working in this
direction is to have a business model with two revenue
streams from business customers and end-users.
Scholars and practitioners endeavour to identify how
to create this opportunity. Many scenarios and models
(Baines & Howard, 2013; Tukker, 2004) have been
proposed to support firms in this servitizing trend. In
general, scholars argue in favour of the value-adding
perspective (Ulaga & Reinartz, 2011) for the physical
goods in order to create a new business opportunity
from services. This movement is rapidly developing
when digitalisation and smart products are involved
(Iansiti & Lakhani, 2014; Porter & Heppelmann, 2014).
service their smart products in the market, are in a
better position to engage their end-users at the down­
stream value chain. Data from smart products (Iansiti &
Lakhani, 2014; Liozu & Ulaga, 2018; Porter &
Heppelmann, 2014, 2015) with the Internet of Things
(IoT)/Internet of Services (IoS) setup are often involved
in subsequent discussions. This approach opens up a
new business horizon for manufacturing firms, espe­
cially in the business-to-business (B2B) scenario. It is
often discussed from a marketing perspective and seen
as a new competitive advantage to boost firms’ revenue.
Many benefits are identified through cases (Boehmer et
al., 2020; Iansiti & Lakhani, 2014); however, the servi­
tization is still considered a black box (Kamal et al.,
2020). Scholars are especially concerned about the chal­
lenge regarding reengineering organisational processes

CONTACT Kuan-Lin Chen klc@mp.aau.dk; kuanlin16@gmail.com Department of Materials and Production, The Faculty of Engineering and
Science, Aalborg University, Denmark
© The Operational Research Society 2022.
2 K.-L. CHEN ET AL.
and structures (Porter & Heppelmann, 2014; Ziaee
Bigdeli et al., 2021); it remains a subject of high-level
discussions (Bigdeli et al., 2017).
In this research, we applied Barney’s resource-
based view (RBV; Barney, 1991; Mata et al., 1995) as
a lens to investigate manufacturing, taking informa­
tion technology (IT) and data as the means to servitize
its firm. According to Barney (1991) and Mata et al.
(1995), a firm with IT competence can better create its
potential resources with characteristics of value, rare­
ness, imitability, and substitutability, which can be the
resources to develop the competitive advantage. If so,
it can lead to generating sustained competitive advan­
tage. In our study, the IoT and its data implementa­
tions are seen as enablers to explore the black box of
servitization from an operational perspective. We are
looking for how to materialise the value of IoT and its
implications in the servitization context. Action
design research (ADR; Sein et al., 2011) was applied
to look at the combination of these two above-
mentioned practical factors, and it was argued that
data could be an essential resource of sustained com­
petitive advantage (Mata et al., 1995). How can a new
layer of information transparency be created from this
enabler to support the strategic business moving for­
ward downstream markets? How can this set of IoT
data together with the enterprise resource planning
(ERP) system be consolidated to enhance the business
system in supporting managers’ decision-making?
How does the business system of a product-centric
firm explore this new data asset to support the busi­
ness goals? What changes should be initiated in the
organisation? These questions need to be investigated
in conjunction with the management information sys­
tems and servitization domains. Figure 1 illustrates the
high-level research background of this study.
This paper follows ADR’s research process (Sein et
al., 2011), as will be elaborated below. The first three
sections establish the framework, in which the
research background, the servitization challenges
from an operational perspective, and the research
objectives are provided. The case selection and case
Marketing perspective
Manufacturing
Smart products
Enablers
Usage of data &
Information technology
Servitization
Figure 1. The high-level research background.
background is then introduced, followed by a discus­
sion of the research design, methodology, and data
collection. The subsequent sections address the experi­
mental results and reflections on the selected case. Our
learnings and abstraction knowledge are then pre­
sented. The discussion focuses on the aggregate efforts
to utilise IoT data and its implications to develop
processes and organisations in the servitization con­
text. In conclusion, we revisit the framework and
suggest that scholars should pay more attention to
the significance of utilising data in connection to
organisation development. Last but not least, we pro­
pose that industrial researchers apply ADR to engage
more closely with practitioners to explore the use
context of innovative solutions. This leads to relevant
contributions to the industry as well as rigorous aca­
demic results.
2. Research background
2.1. The complexity of servitization
Servitization is a well-recognised phenomenon in the
manufacturing industry. Scholars from different dis­
ciplines define servitization from various perspectives
(Baines et al., 2009). There is, however, a common
agreement that servitization is the combination of
services and products (Tukker, 2004; Vandermerwe
& Rada, 1988). From a marketing perspective, serviti­
zation is often a business model or strategy (Baines et
al., 2009; Kastalli & Van Looy, 2013) to engage with
customers and end-users, while some operations scho­
lars emphasise that servitization involves the process
of firms’ transformation. The concepts “added-value
services” and “monetizing data” (Eggert & Ulaga,
2002; Liozu & Ulaga, 2018; Reinartz & Ulaga, 2008;
Ulaga, 2003) are often associated with digital services
or advanced services (Baines & Howard, 2013) to
shape the strategic moves. Data evidence (Iansiti &
Lakhani, 2014; Liozu & Ulaga, 2018; Porter &
Heppelmann, 2014, 2015) is also involved in this sce­
nario. In such a case, the IoT/IoS is an enabler to this
Operations perspective
Organization
Business system
IoT

Figure 2. The complexity of digital-enabled servitization for a smart product manufacturing firm.
movement. Manufacturing firms that can service their
smart products in the market have a better opportu­
nity to engage end-users. To this extent, the complex­
ity of servitization can be illustrated in Figure 2,
resulting from the combined arguments.
This complexity is packed with many uncertainties
and challenges (Bigdeli et al., 2017; Chen & Møller,
2019). Managers who are developing transformational
business strategies struggle with pressure from both
outsides and within the organisation. One particular
managerial concern often mentioned is the servitiza­
tion paradox. Scholars describe the situation “substan­
tial investment in extending the service business leads to
increased service offerings and higher costs but does not
generate the expected correspondingly higher returns”
(Gebauer et al., 2005). It results from several factors,
for example, the lack of market data and service think­
ing (Gebauer et al., 2005; Kohtamaki et al., 2015). The
managers, however, take such a bold approach
because of the rapid development in the external busi­
ness environment. A developed organisation must
absorb the rapid changes in the business environment
(prerequisite 1) and develop new capabilities to win
markets (prerequisite 2). We see clear evidence in the
literature; however, few studies have addressed the
situation within firms and the organisational changes
the firms might make to achieve such a vision (pre­
requisite 3).
2.2. The challenges of servitization
Instead of investigating the organisational changes,
researchers have identified several servitization chal­
lenges (Baines & Howard, 2013; Story et al., 2017;
West et al., 2018). Scholars argue that working on
solutions to overcome servitization challenges is a
hierarchical process. First, the firm needs to be
equipped with hardcore technical competencies to
develop value-adding offers and establish attractive
business models associated with the product-service
offers to engage with end-users. Manufacturing firms
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 3
might require different competencies to carry out the
two different types of prerequisites; however, the fun­
damental consideration is the same principle, which is
“increasing the value” for customers (Eggert & Ulaga,
2002; Reinartz & Ulaga, 2008; Ulaga, 2003). Second,
each product-service’s mutation is also confronted
with the soft value of the organisation, such as orga­
nisational inertia and the organisational culture
(Baines & Howard, 2013; Story et al., 2017). They
might be constrained the servitizing development.
This variety might lead to a specific structure and
processes to deliver the impact on servitizing a firm’s
performance (Kohtamaki et al., 2015; Wang et al.,
2018) and its’ servitization development. In addition
to these aspects, the transparency of information was
pointed out (West et al., 2018). They recognised that
“sharing of know-how” with cross-functional teams is
generally problematic because the organisational cul­
ture often binds an organisation in the transforming
stage. This culture is often shaped by the long devel­
opment of the product-centric vision (Chen & Møller,
2019). Most product-centric manufacturing firms
have difficulty in breaking through their existing
model towards providing advanced services. In this
case, up-to-date information was limited to the service
perspective of the products and the value proposition
aspect of the product-service offerings, which is posi­
tioned around product capability (Baines & Howard,
2013).
2.3. The research gap in digital-enabled
servitization
This research recognises how the IoT and its asso­
ciated data implementations create the complexity of
servitization for manufacturing (see, Figure 2). It
extends the current focus of the servitization literature,
which captures the potential value of the IoT data
from a business perspective. Scholars argue for a
need to monetise data (Liozu & Ulaga, 2018) as a
new business proposition to offer a digital service
4 K.-L. CHEN ET AL.
and/or a new form of business strategy. Only a few
studies have begun to look into the organisational
perspective, including the impact of external factors,
e.g., IT (Bustinza et al., 2017), and to highlight the
importance of using data to improve the operational
process (Huang et al., 2014). In other words, servitiza­
tion scholars and practitioners are mainly interested in
servitizing activities that deliver commercial results
and value propositions that might boost the firms’
performance (Wang et al., 2018). Servitizing activities
and processes of gaining performance knowledge to
promote servitization are often overlooked (Chen &
Møller, 2019). So, we argue that the servitization com­
munity should also pay attention to the other half.
In this research, we propose to take into considera­
tion the influence of IT (Mata et al., 1995), operational
processes to generate insights from data (Sharma et al.,
2014), and further recognising the power of using data
to enable decision-making (Lycett, 2013) as the
resourced to sustain the competitive advantage
(Barney, 1991). Two highly relevant concerns are
part of the current trend in discussions in the IS
community: (1) the impact of digitalisation on the IT
department (Urbach et al., 2019) and (2) the role of
data in supporting a business perspective (Winter,
2019). The former topic is associated with our third
prerequisite (how the back office and the setup of the
business system operate to support the development of
the digital-enabled servitization [see, Figure 2]). In
general, scholars debate the great responsibilities of
the IT department in the digital transformation jour­
ney. They argue that IT expertise is becoming preva­
lent in today’s business organisation; it is time to
rethink IT’s position in the business and the organisa­
tion. To be more specific, they further point out three
major areas in this digital transformation; a data-
driven transformation is one of them. In addition to
Research background
Marketing perspective
Manufacturing
Smart products
Enablers
Usage of data &
Information technology
Servitization
drawing on
Longitudinal study of servitization transformation
Figure 3. The paper framework.
this broader picture, the second topic, focusing on the
role of data, is to explore the data-driven approach
from a business perspective (Blaschke et al., 2018;
Winter, 2019; Winter & Yang, 2019). In this approach,
they specifically focus on the “black-box model of data,
which represents the interactions between the system
and its environment” (Dietz, 2006, p. 67).
In summary, Figure 3 presents the structure of this
paper. We acknowledge the role of IT and data as
enablers to drive both marketing and operations per­
spectives of servitization; however, in the research, we
focus on the operations perspective. Instead of using
IT and data to design value-adding digital services
(Lerch & Gotsch, 2015; Vendrell-Herrero et al.,
2017), we argue that IT and data can also drive opera­
tional development of servitization. More specifically,
we emphasise the link between servitizing activities
and processes and gaining performance knowledge
to promote servitization (Chen & Møller, 2019). The
roles of IT and data (knowledge from the IS literature)
are seen as enablers to facilitate this part of the
transformation.
By employing ADR in this longitudinal study, we
aim to answer the research question concerning how
to transfer IoT data into relevant insights and action­
able decisions to support servitization development.
To do so, we will build up this research from the
bottom up. First, we will leverage the power of IT to
explore how to transfer IoT data into relevant insights
and develop an artefact and an intervention to facil­
itate this process. Furthermore, we will investigate
what to change in the business system and at the
organisation level while we develop and use this arte­
fact and intervention with the internal stakeholders.
Last but not least, we would like to see how ADR plays
a role in a transformation project like this one. Figure
3 summarises the abovementioned ideas into the four
Research focus
Operations perspective
Operational concerns
Organization
1. Value of IoT data
2. Business system design
Business system
3. Managerial implications
IoT
4. Action design research
drawing on
contributing to
contributing to

subpoints: (1) the value of IoT, (2) business system
design, (3) managerial implication, and (4) ADR, to
which we aim to contribute our findings in joint IS
and servitization literature.
The following section will introduce how we set up
this study and draw a detailed view of the relevance of
the research objective.
3. Relevance of the research objective
This research recognises the digital trend of servitiza­
tion development, its challenges, and its complexity
(see, Figure 2). We intend to leverage the IS domain’s
expert knowledge to bridge the servitization research
gap. We aim to investigate servitization from the
operational perspective (see, Figure 3).
To align the research gap with the practical per­
spective, we advocate the principle of the “black-box
model” (Dietz, 2006, p. 67) to interpret the IoT data
from connecting a smart product and its usage envir­
onment. Here, the usage environment means to map
the installed smart product’s functionality from the
end-users’ side and the smart products’ default func­
tionality setup from the bill of material (BOM) in the
enterprise resources planning system (ERP). Figure 4
illustrates this conceptual hypothesis. It takes IoT
data as the enabler to explore the end-users market
in order to create transparent information to miti­
gate, e.g., the servitization paradox (Gebauer et al.,
2005), resulting from the lack of market information.
So, the end-users market can be understood
through exploring the business insights from the
collective IoT data. This means that the end-users
market can be the same region as the one for
installed and in-use smart products. Those in-use
smart products are also an index that indicates how
active the market is using such types of smart pro­
ducts. This particular feature is seen as the depar­
ture point of this research. Furthermore, we
consider how the existing business system
Figure 4. The role of IoT/IoS and its data value in the servitization context.
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 5
consolidates this IoT data set together with, e.g.,
ERP to support managers in understanding the
emerging end-users markets. In the first step, we
probe into the business system and examine how
the business system responds to exploring this new
data asset to support the business goals. If it needs
any changes to fulfill this task, what might be the
initial changes in the organisation? What impact
might be at the organisation and process levels?
4. Case selection and case background
This study was carried out in a Danish manufacturing
firm with 350 employees and business partnerships in
over 88 countries. Its core business is to design and
deliver high-quality and leading farm equipment in
the global markets. In 2006, the firm began developing
a software product for the developed markets and
transforming its product systems into smart products
for its end-users. However, this software product was
defined as an auxiliary tool rather than a digital service
at that time. It sold with the manual in a box delivery.
This software product aims to visualise the data from
the installed product system, which configures to one
smart controller and connects with its relevant func­
tional products and sensors. The main product func­
tion is to detect and monitor the production
conditions of farmhouses on the end-users sides.
Together with the latest developed IoT/IoS platform,
the company’s smart product was created and kicked
off its servitization journey in 2017. They have bigger
ambitions: creating a digital service and establishing a
smart, connected product concept in their business
model. The business goal is to reach end-users with
the digital service to create a second revenue stream.
Besides, they can further utilise and promote the phy­
sical product system. In short, the smart product is the
keystone of this extended business model. Figure 5
shows a summary of the business model for this
selected case firm and its business vision.
6 K.-L. CHEN ET AL.
Figure 5. The business model of the case firm.
In this stage, the firm can offer substantial smart
products and manage well the concept of “customer
who wants us to do it with them” (Baines & Howard,
2013). In other words, this firm is at the stage of a
maturing intermediate service. Although the com­
pany provided an intermediate service to end-users,
the firm’s deeper organisational thinking and organi­
sation structure (see, Figure 6) remained in the pro­
duct development form. This intermediate service
was developed as a software product rather than as
a digital service. In this sense, the Research and
Development (R&D) team took charge of the devel­
opments rather than collaborating with other func­
tional teams (e.g., the global support and the IT team,
see, Figure 6).
Figure 6. Part of the organisation chart associated with the servitization journey.
In addition to software product development, the
R&D team extended its competencies beyond physical
product development and stepped into the information
system. Several competencies, such as data and server
management, programming in the application develop­
ment, and technical-orientation skills, were used during
the development process of this software product.
However, the rest of the organisation’s teams remained
the same as the product-centric company. The firm
adopted lean manufacturing principles to carry out its
logistics mission: to serve its business customers (e.g.,
dealers) with the right (soft) products in the right place
at the right time. In the product business, the dealer has
the greatest responsibility for taking care of the end-
users. The primary mission of the IT team is to look

after the organisation’s business systems. They must
provide corresponding information to the functional
teams, so they can carry out the logistics mission.
However, constructive business insights are rarely
used in understanding the end-user markets as the
reference in this transformation stage. Managers are
thus paralysed in this brand-new situation, in which
they do not have the relevant information to make a
strategic decision. Figure 6 presents a part of the orga­
nisational chart, which shows the functional teams
associated with this longitudinal study.
5. Research design and methodology
In the previous sections, we explained the rationale
behind this practical research and emphasised its novelty
in bridging the servitization gap and IS development.
This section further sketches the link within the IT
focus and its implications in Figure 7. In addition to
the first challenge in consolidating the IoT data together
with ERP data, we also need to consider its implications
on the servitization from the operational perspective
(refer to Figure 3). So, the research focus is not only on
an IT artefact itself. We should also consider the impacts
of developing processes in the servitization context.
To fulfill these considerations, we selected ADR
to carry out this research. Unlike ordinary design
research (DS) projects (Iivari & Venable, 2009;
Järvinen, 2007), ADR prolongs the investigation
beyond designing an artefact (Sein et al., 2011)
and emphasises the role of organisational context
in shaping and deploying innovative IT artefacts.
So, the value of an experiment extends to the
ensemble artefact’s value as an intervention con­
cept. Therefore, the value of this DS project is in
discovering the intended and unintended
Figure 7. The research design within IT focus and its implications.
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 7
organisational consequences while designing, build­
ing, and evaluating innovative IT artefacts (Sein et
al., 2011). In this situation, the interactions between
design and use are often the aha! moments that
researchers value investigating. Therefore, we
adopted this research method in iterative experi­
ments and evaluated the lesson learned from the
organisational changes when materialising our pro­
posed artefact (see, Figure 7).
5.1. Research structure and data collection
In principle, this research was driven by the industrial
investigation and a literature review related to serviti­
zation. Together, we formed the conceptual model,
which took IoT data as an enabler to explore the end-
users market to mitigate the lack of market data in
servitization development. Figure 8 explains the itera­
tive process for developing the relevance and rigour of
this research. It represents the first part of the research
structure design, which extracts from the first two
stages of the ADR approach.
In this first stage, we intended to formalise the big
picture of the transformation context through a litera­
ture review of works on servitization and the role of
IoT. In addition, an industrial investigation was
undertaken in the case firm to probe practical chal­
lenges. Three prerequisites were identified through the
literature and the empirical investigation (see, Figure
2). In this research, we focused on prerequisite 3, the
internal processes and resources restructuring in the
back office (see, Figure 3).
In the second stage, three iterations (alpha, beta,
and gamma) were undertaken to work with practi­
tioners. Each iteration had three main activities: inves­
tigation, building intervention, and evaluation to
8 K.-L. CHEN ET AL.
Figure 8. The iterative process for developing the relevance and rigour of this research.
consolidate IoT and ERP data sets and evaluate their
impact on the operationalised perspective of servitiza­
tion development. The evaluation narrowed to under­
stand the strength and limitations of the existing
business system and to observe how internal stake­
holders interact with each other and with the existing
business system.
Next, practitioners and senior ADR researchers
were invited to provide feedback regarding the useful­
ness and rigour of interventions (see Appendix 1,
Table 3). Our understanding of developing a fit-
purpose intervention and this emerging complex
social-technical problem improved as we progressively
developed the artefact in each iteration.
The iterative development processes refined the rigour
and relevance of the three DS domains’ concerns, namely
the environment, the knowledge bases, and the solution
space (Hevner et al., 2004). Figure 9 presents the four
stages of the research structure and data collection
process.
6. Research insights, results, and reflection
In this section, we present the ADR research results for
the synthesis of stages two and three.
6.1. The constructions of the artefacts and
interventions
In this research design, each iteration had its sub-
objective and thus the outcome of the stage. The
goals and the mini engineering solutions matured
during the development process and satisfied the
defined project objective either way at the end of
three iterative engagements. Figure 10 presents an
overview of the research processes. There are two
layers of research processes. First, the engineering
approach (blue circle/three iterations) focuses on
designing and developing the artefacts and validat­
ing their usefulness. Also, we looked into how each
artefact’s results fit the purpose of exploring the

Figure 9. The four stages of the research structure and data collection process(adopted Sein et al.’s ADR method: stages and
principles (Sein et al., 2011)).
relevant business insights to support managers in
understanding the potential end-users markets. In
addition, the organisational changes and impact
through this interactive experiment (the green rec­
tangle) are also observed and validated during the
research processes with managers. The detail of the
ADR stages, the design concept, and insights are
outlined in Table 1.
Figure 10. An overview of the research processes.
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 9
6.2. The effect of artefacts and interventions
In this section, we present the results of three itera­
tions. The detailed technical development was
recorded in Appendix 3. In this section, we present
the summary and its theoretical implications. There
are two layers of research processes (see, Figure 10) in
each iteration. The design artefacts were developed
10 K.-L. CHEN ET AL.

Table 1. Action design research stages and its contents (based on Sein et al., 2011).
Operations and Management
Contributors ADR research ADR Design Artefact development Users

Activities Investigation Building intervention Evaluation

Iteration 1: Investigate the potential Practitioners provide input on
Alpha misalignment of servitization the practicality of two
development between the heterogeneous databases
research focus and the (from ERP and IoT platforms).
practitioner’s challenges. With the mindset of seeking
supportive information to
develop servitization, the
servitization team attempts to
identify the hidden
informative links to explore
the value of data sets behind
their representations.
Iteration 2: Reveal limitations of the Adopting the blackboxing
Beta product-centric business approach (Winter, 2019) to
system in the experiments examine the existing
and interventions. enterprise system and taking
a trial-and-error approach to
consolidate two
heterogeneous data sets (ERP
and IoT/IoS) based on
geographic information.
Iteration 3: Refine the proposed “product-in Established an instantiation,
Gamma -use” model and examine the which explores the product
organisational changes and attributes from the
impact on the content and perspective of how it can be
process levels (Ziaee Bigdeli used, rather than what it is
et al., 2017) through the Beta designed for and to whom it
intervention. can be sold.
A method to consolidate ERP
and IoT/IoS data sets. The
data regarding the extended
business potential of the in-
use smart products (from IoT
data set) are extracted
manually to map/consolidate
with the products sold (data,
from ERP) and presented in
Microsoft Excel spreadsheets.
The purpose of this version of
the artefact is simply to
explore potential business/
markets for the upcoming
digital service.
Develop a relational database by Several review meetings were
using the structured query
language (SQL) and then
present the exploitative
business information through
business intelligence.
A comprehensive artefact,
product-service platform
(PSP), containing three key
elements, is created to
visualise the invisible value-
adding information around
this emerging scenario.
Through the PSP, the
explorative value-adding
information regarding the “in-
use” smart products is
presented in Microsoft Power
BI to internal stakeholders.
Business value-adding
information from the alpha
version was used to set up the
initial business plan, which
the business developer used
to pitch a high-level
servitization tactical plan to
executive officers.
held to evaluate the
usefulness of the exploitative
information and the artefact.
The lesson learned from the
process was extracted, and
further, a concept of a
“product-in-use” model to
consolidate two
heterogeneous data sets (ERP
and IoT/IoS) was proposed.
Seven meetings were arranged
for the relevant internal
stakeholders (see Appendix 1,
Table 3) to receive
comprehensive feedback on
this data-driven artefact and
its impact on the long-term
perspective of servitization
development and its
associated tasks.

together with the specialists and functional teams
while evaluating its purpose and usefulness was done
with the management team. The objective was to
enhance the capability of the business system, which
can further consolidate the heterogeneous IoT and
ERP data sets and explore the relevant business
insights to support managers in strategic decision-
making. So, managers knew how many smart products
were sold to the markets (insights linked to ERP data)
and noticed how actively those smart products sold
were potentially in-use in the market (insights pro­
vided by IoT data). Through iterative engagements, we
gained knowledge regarding the organisational
changes and impact through the first-hand experi­
ments in the activities engagements with specialists,
observations, and evaluation interviews with the man­
agement team. Figure 10 presents the breakdown of
three deliverable artefacts as the interventions and the
contributions’ areas.
The first iteration, alpha, focused on investigating
the implementation of IoT/IoS impacts on the busi­
ness system and the organisation. Our approach was
to evaluate how to use this emerging data to benefit the
development of digital-enabled servitization. The
alpha version’s outcome was to present a conceptual
method to bridge the critical value of data from ERP
and IoT platforms, using Microsoft Excel spread­
sheets. The data value from this version was used to
set up the initial business plan, which the business
developer employed to pitch a high-level servitization
tactical plan to executive officers. Therefore, the initial
design essence of the artefact was examined and eval­
uated with the business developer and senior man­
agers who were involved in the development of the
servitization tactical plan (see Appendix 1, Table 3). It
was also confirmed that managers were looking for
information regarding how smart products are “in-
use” in the market. Without seeing this part of the
insights, managers made decisions blindly. The
detailed development is recorded in Appendix 3.1,
the alpha iteration.
The second iteration, beta, aimed to materialise the
proposed concept in a digital means. Before working
on building the second intervention, the ADR
researcher participated in the onboarding orientation
meetings. The purpose was to get comprehensive

knowledge of the firm’s history, the available product
components, smart product systems, the present orga­
nisational tactics, and the technical information infra­
structure of business processes, etc. With input from
the evaluation of the alpha version and from the
orientation meetings, the idea for the beta artefact
was to use the existing structured query language
(SQL) directly to consolidate two heterogeneous data
sets (ERP and IoT/IoS) based on geographic informa­
tion, where the geographic location was identified by
the IP address and customers’ delivery addresses.
Then, Microsoft Power BI was used to present the
exploitative business insights. Several meetings were
arranged (see Appendix 1, Table 3) to present this
artefact to managers (a business developer, a digital
product manager, a global support manager, and the
chief technology officer [CTO]). In meetings, we
further pinpointed what might need to be changed at
the technical and organisational levels and then
invited managers to evaluate the usefulness of explor­
ing information. With the second iteration, we under­
stood the information demands of the managerial and
operational aspects. In addition, the necessary (invisi­
ble/not yet digitised) knowledge, the limitations of the
existing organisational setup, and the business system
(e.g., ERP) were revealed. However, this attempt’s data
value was still bound to the product’s functionality. It
was most beneficial for the installed-base business to
sell upgraded components and/or spare parts to keep
the smart products running efficiently. Managers were
still missing the big picture of what percentage of its
smart products were being used in the markets and of
end-users’ considerations in terms of what digital
Figure 11. Tree-style view of the data analysis.
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 11
service was relevant. Therefore, managers cannot
make effective decisions to drive business changes
towards servitization and tell what digital services
can lead to potential success. The detailed develop­
ment is recorded in Appendix 3.2.1, the beta iteration.
The third iteration, gamma, goes beyond the lim­
itations of the beta version. It aims to explore the
potential of digital service markets rather than exploit­
ing business insights for the installed-base business. In
the gamma iteration, ASP.net(C#) was applied to
develop the product-service platform’s framework;
an institution with three elements was developed at
the gamma stage. This set of artefacts and the technical
changes were again summarised and presented to the
management team. We intended to invite managers to
offer feedback on this version of the artefact and its
potential impacts from the following three perspec­
tives. First, they assessed the mechanism of this
approach and how it might change their actions with
respect to developing servitization. Second, they eval­
uated how the usefulness of exploitative business
insights regarding their understanding of how smart
products were in-use in the market and to what degree
these in-use insights supported their decision-making
towards digital-enabled servitization. Third, they
assessed their opinions on how to take this approach
further and implement it in the organisation.
As a result of these iterative engagements, a prac­
tical intervention Product-Service Platform (PSP) was
developed to accommodate the consolidated hetero­
geneous data sets from the ERP and IoT/IoS plat­
forms. It included the following four steps of
development processes.
12 K.-L. CHEN ET AL.
(1) Step one: investigate the available data source.
The first step of the PSP design process was to
identify the reliable data source as a basis. What kind
of data was needed? Where were those data located?
These two questions needed to be investigated before
we started to develop the PSP. Initially, the two types
of data in the existing setup were referred to as the
fragmented understanding of the product market and
the current product-in-use markets of the smart pro­
ducts (see, Figure 11). Examples of the second type of
data were order info, product price info, and service
license info, which can be used to relate to IoT/IoS and
ERP systems. However, those two systems were
located in the R&D and IT departments, respectively.
(2) Step two: data analysis and processing.
After identifying the data sources in the first step,
we further focused on how we used the data and what
kind of processes we employed to process those data.
Our principle for designing the PSP was to consider
how to leverage the organizational IT resources and
capability. The goal was to avoid any unnecessary
interference in the current setup of the business to
maintain the consistency of this research case.
Therefore, we needed to investigate the current IT
setup, especially the ERP and IoT systems, to under­
stand what kind of technologies were used for data
management within the organization and how we
could obtain the required data from the current sys­
tem setup. As soon as we imported the real-time data
into the consolidated database, PSP needed to be able
to explore the hidden relationship between the ERP
and IoT systems. The feature extraction conditions
needed to be pre-defined for processing the later data
querying. However, due to the data sources being
different, the data structure of the same data may
vary between ERP and IoT/IoS systems. Therefore,
the data pre-processing (e.g., data normalization) was
a necessary step to continue the subsequent
development.
(3) Step three: data storage.
In order to have better PSP performance, a conso­
lidated database was requested. Therefore, the third
process needed to focus on integrating the extracted
data from both ERP and IoT/IoS systems. The key
point of this step was to build the data mapping rules
(e.g., link the end-user to the software license info.) to
fill the gap between relevant data sets. The abstraction
of this key step was also transferred to the design
principle in the next section. Furthermore, the chosen
data storage method needed to be compatible with the
current infrastructure.
(4) Step four: user interface design.
As one of the key features of the artifact, a user-
friendly interface was required. Several options were
available from a technique perspective, e.g., a local
website, a desktop application. To get a better experi­
ence and less training cost, the user interface of PSP
was designed to be self-explanatory and easily inte­
grated with the consolidated database designed in
step 3.
Furthermore, the Microsoft Power BI was used to
visualise the consolidated data in a tree model format
(see, Figure 11). This framing technique was adopted
from Howard’s decision analysis process (Howard,
1988). After structuring the problem, the consolidated
data was categorised according to rules set at the meta-
level. The tree’s starting point was the sold product
information, which was extracted from the ERP data­
set. All products sold were categorised into the smart
product group and the non-smart product group by
leveraging the consolidated data set. This process
helped estimate the market distribution of activated
smart products. To understand the potential market X
(e.g., which market (group of product-users) was the
target market to promote digital service X). Meta-
mapping was used to link the smart products’ infor­
mation with the product sold customers’ records. The
goal of utilising these data links was to infer the
potential of promoting the relevant digital service to
the end-users if their device was suitable to run the
coming digital services. Therefore, each specific smart
product market can be classified into a corresponding
digital service type. Such a process provided business
information on the potential digital service markets
for managers to decide what and how they should
promote digital services. In this project, another six
categories were identified by applying this logic, which
presented the potential business for other digital ser­
vices or/and their auxiliary products.
The internal stakeholders could “see” the invisible
changes in redirecting the available information to
understand how their smart products were potentially
being used in the markets. In the three iterations,
evaluations were handled in both steps of designing
and developing the artefact and semi-structured inter­
views. Thus, we received feedback and evaluations in a
dynamic environment. First, the artefact itself was
evaluated mainly during the building intervention
phase. Internal stakeholders involved in those three
iterations (see Appendix 1, Table 3) contributed their
domain knowledge and evaluated the developed arte­
fact’s feasibility and usability. Two senior ADR
researchers, one business developer, one digital pro­
duct manager, one data specialist, one marketing man­
ager, and the senior management team (two executives
and IT managers) were invited to evaluate this

Figure 12. The breakdown of the three iterations – the deliverable IT artefacts as the interventions and the areas of the ensemble
contributions.
invention’s rigour and ensemble value. We focused on
the potential impact of adopting a long-term perspec­
tive of servitization development and its associated
tasks (e.g., recognising the business potential related
to in-use users or markets).
In summary, Table 1 describes an overview of the
three iterations’ investigation, building intervention,
and evaluation. Figure 12 presents a visualised flow to
explain the results of the three iterative engagements.
6.3. IT and data impact servitization development
In this section, we provide reflections and learning on
servitization from an operational perspective (see,
Figure 3). First, our focus was on consolidating the
two heterogeneous data sets (from ERP and IoT plat­
forms). Second, we also reflected on organisational
thinking and processes that caused the conflict to
develop servitization in the organisation. In general,
this longitudinal study employed radical thinking to
provoke a manufacturing firm’s steady organisational
inertia. It eagerly transformed its product business
into a dual-focus business on both products and digi­
tal services.
6.4. Emerging managerial challenges
There were three managerial challenges identified
from the evaluation interviews of the three iterations
(see Appendix 1, Table A3). The first issue was the
innovation dilemma. Within the highly defined
responsibilities in the existing organisational setup,
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 13
people have limited themselves to innovative thinking
and activities within their realm of responsibility. The
IT department (the data specialist and IT manager)
stated:
This ADR way of developing an integrated system is
an innovative approach for them. Under the existing
organizational setup, developing an IT project is very
isolated. The functional team has its responsibility to
propose a mature idea (with the evaluation of the
business value) of IT solutions. Then, the IT team
will participate in the earlier project preparation
meetings to develop further the proposed idea. With
this functional approach, however, the integration
solution like PSP will never be formed because no
one will take the cross-functional ownership.
The second concern was the development of serviti­
zation thinking. The direct users of the PSP (the busi­
ness developer, digital product manager, and marketing
manager) acknowledged this explorative information in
understanding products sold, and the reference in-use
status was very beneficial for glancing at the potential
digital service market. However, it required effort to
adopt this way of thinking, learn the implications of the
explorative data, and think of how to take action based
on the indications from the explorative data.
The digital product (service) manager stated:
This information is good for me to develop a sales
tactic plan for the regional sales team and is also good
to share with our dealers. Now we know which smart
product systems are more actively used in what
regions; we are able to take a more proactive approach
to promote the upcoming advanced services.
14 K.-L. CHEN ET AL.
The third issue was to overlook the value behind the
data’s initial intention. The CSO provided an excel­
lent statement about this:
Developing the digital service and exploring the
markets are two pillars in servitization transforma­
tion. By exploring our own data (ERP and IoT), we
get one step closer to knowing how to identify the
potential markets and customers and what digital
services associated with our smart products
(advanced services) might need to be promoted.
IoT data creates this new interdependence relation­
ship between the market and R&D teams. We
should explore it more and see how to create
value for us and also for customers.
In most situations, the value of data was only recog­
nised for its original purpose, and its value was
exploited accordingly. That was one of the phenom­
ena we discovered in the servitization-related litera­
ture as well. Scholars and practitioners focused on
exploiting IoT data to design value-adding digital
services (Lerch & Gotsch, 2015; Vendrell-Herrero
et al., 2017) rather than using it to facilitate organi­
sational transformation. However, we turned this
thinking around and explored the IoT data for
operational considerations.
7. Prescriptive learning
This section provides our formalisation of learning
in reference to stage 4 of ADR. The learning from
the three iterations was formalised, and we
addressed it in two layers. First, the focus was on
the design principle of the data-driven approach (the
aggregated effort of IT and data), which can support
the business’ intends to go into downstream mar­
kets. Second, we further elaborate on the impact at
the system level and discuss how the business sys­
tem might be reshaped to facilitate the organisa­
tion’s service thinking and promote operational
development in servitization.
Figure 13. Iterative engagements for developing the IT-dominant of the PSP (Sein et al., 2011).
7.1. The design principle of the intervention:
product-service platform (PSP)
To explore the emerging needs of product in-use
information, we had three iterative engagements to
investigate the problematic situation, experiment
with the feasible solutions PSP, and evaluate the use­
fulness of the solutions. One of the practical challenges
of developing the PSP was revealing the internal sta­
keholders’ unspoken expectations. Each functional
team had a specific responsibility with respect to the
company’s newly defined vision for servitization.
Through the three iterative engagements (see, Figure
12 and Figure 13), the ADR team was able to under­
stand the synthesis of those responsibilities (the spe­
cific use context). They further identified what types of
information the managers and servitization task own­
ers were looking for (Sein et al., 2011; Sein & Rossi,
2019).
In this case, the firm is a B2B manufacturing firm,
which intended to go towards downstream markets to
provide digital services to its end-users. Except for the
logistics information, which could be extracted from
the ERP system, many questions were not recognised
anywhere in the existing business system. For exam­
ple, how were the sold smart products used in the
markets? Which end-user markets were most pre­
pared for the upcoming digital services? To put these
considerations in a central position, the marketing and
sales experts had to answer those questions. Based on
their experience, they knew how to recognise smart
products’ in-use status according to the end-users
production setup. However, those valuable insights
were missing from the existing business system. This
change in business considerations and operational
intention was challenging for the business system,
which was designed to be a product-centric setup
and a transaction-based business.
In addition to the changes in business considera­
tions towards downstream markets, the emerging data
asset also challenged the organisation’s competencies

to handle the complexity of the digital servitization
situation. It seems there was no connection between
the two heterogeneous data sets because they were
created in different places (ERP and IT vs. IoT/IoS
and R&D), and their initial purposes (e.g., integrated
enterprise resources vs. part of the new product devel­
opment) were also varied. One purpose was to fulfill
the logistics mission, whereas the other was to be part
of the functionality of smart products. However, if we
looked at the data collected from the business perspec­
tive, each data collection point in the IoT/IoS platform
indicated a particular type of smart product and its
product-in-use conditions. This means that the IoT
data set was able to express the conditions of the smart
product’s use. When the two heterogeneous data sets
were consolidated into one unified database, we could
better understand the business potential. The idea was
to compare the amount of the smart products sold to
the smart products’ in-use, which constituted the busi­
ness potential for digital services.
Figure 14 presents the design principle from which
we summarised the learning abstraction from our
three iterations. This design principle has three layers
to improve the existing business system by exploring
data to support managers’ understanding of the pro­
duct-in-use markets. These exploitative business
insights can then be leveraged to improve decision-
making about how to promote the upcoming digital
services to the markets with the greatest potential.
The purpose of the bottom layer technical concern to
support business considerations was to create digital links to
connect the fragmented understanding between two data
sets, referred to as two markets (B2C and B2B). To do so,
we also established a data-driven approach to explore the
value of data and use it to drive servitization forward.
Figure 14. Design principle of how the data-driven approach can support the business intention and the defined operational
purpose (adopted from (Chen et al., 2019; Winter, 2019)).
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 15
The middle layer business considerations in sup­
porting the operational purpose involved putting the
smart product at the centre. By extracting the product-
in-use insight from the consolidated PSP data set, we,
on the one hand, were able to draw the digital picture
of how the production condition on end-users sides
and the product-in-use status. On the other hand, the
managers were also able to understand the business
potential of the digital market through the aggregative
data points of product-in-use sits (a reference to
Figure 11).
They all three layers together improve the limited
functionality of the business system. The new explora­
tive data insight was to represent how active each
market (e.g., of the country) was using the smart
products sold rather than the static status of the sold
market (the classic image drawn from the ERP sys­
tem). Therefore, managers had a better understanding
of the market conditions for the potential digital ser­
vices and were able to tailor their tactics to promote
the digital service to each market.
Additional usability of the PSP was also identified
during the interview and system use. The CSO sug­
gested treating these explorative product-in-use data
as the reference key performance indicators (KPIs) for
pursuing digital (service) product markets. He dis­
cussed the potential of using those numbers to com­
municate with sales and even with business
partners:“It is helpful to nail down the actionable busi­
ness plan”.
In conclusion, this bottom-up approach of refining
the value of data created a clear view of how a product-
centric firm can change its IT development strategy.
Instead of using one-dimensional thinking, a firm that
embarks on the servitization transformation journey
16 K.-L. CHEN ET AL.
shall align its IT development strategy across purposes
in order to design and explore the data value in sup­
porting service-oriented businesses.
7.2. Emerging constructs to develop a business
system towards digital-enabled servitization
In addition, to examine the system changes at the data
level, we formalise the learning from the impact on the
organisation’s content and process level in this section.
Furthermore, we suggest how to revise a manufactur­
ing firm’s business system to create a data-driven
approach to support managers in facilitating organisa­
tional transformation. In this case, we explored the
IoT data’s potential value to understand the end-users
market and questioned how to handle this part of the
data asset in a product-centric manufacturing firm’s
business system. The three iterative hands-on experi­
ments and feedback provided us with some indica­
tions of what might need to change in the business
system in the back office.
The current business system of the manufacturing
firm took the ERP as the foundation of the IT platform
to accommodate the enterprise data assets and estab­
lish the operational processes to achieve business pur­
poses. It also mainly focused on the logistics mission:
to serve its business customers (e.g., dealers) with the
right (soft) products in the right place at the right time.
This emerging data set (IoT data), designed by the
R&D team, was collected from a smart product system
installed on the end-users’ side. The ownership of this
data set, therefore, belongs mainly to the R&D team.
Therefore, a barrier to recognising the integrated data
value stemmed from this separation and isolative
development. So, even though the IoT data could
represent the “product-in-use” market/end-users’
market, there was no consideration given to exploring
this part of the data asset. The managers seeking
additional business information to adjust their tactical
plan had no reference information, and they therefore
lost their sense-making in this new situation. This
Figure 15. An expanding view of the operational condition in the digital-enabled servitization context.
evolving demand for the product-in-use business
insights came from the decision to expand the busi­
ness direction from a product-orientation to the dual-
focus of a product- and (digital) service- business.
Therefore, managers were faced with a new opera­
tional scenario. Figure 15 illustrates this expanding
view of the operational condition.
In this case, we also argued that the internal busi­
ness system also needed to be expanded to explore the
IoT data. Doing so can accommodate more relevant
collaboration processes, which support the expansion
towards the service-thinking business.
Our interviewee, the CTO, said that
R&D had minimal interactions with the business
development and market department (sales and ser­
vice teams) in the past; it (silo thinking) leads (R&D)
us to know little about how competitive our product
system is in the markets and how actively our smart
products are being used on the end-users’ side.
Through the development of the IoT/IoS platform
and PSP, we began dialogues with business develop­
ment and market teams. We both eagerly seek an
answer to what digital services (advanced services)
should be created for what customers (end-users)
and also for which market (the aggregation of the end-
users) should we deploy our digital business strategy.
To embrace this practical evaluation, we argued
that the emerging business system concept needs to
handle the upcoming (heterogeneous) data assets.
Therefore, the explorative business insights can be
used to support managers in decision-making to
develop tactical plans towards servitization. In addi­
tion, the system itself plays a role in moderating the
different opinions among the functional team about
silo thinking. This means that explorative business
insights should be commonly recognised across
departments. Lastly, the information explored
from the emerging business system needs to recog­
nise the incentive points, which managers can use to
communicate with cross-functional teams
effectively.

8. Discussion
This section presents the research reflection of this
longitudinal study. We took IT and data as enablers
to commence this journey in engaging a global man­
ufacturing firm that embarked on a journey of ser­
vitization. The three iterative engagements provided
a concrete learning platform to observe this parti­
cular scenario, where we aimed to shed light on
servitization and IS literature.
In the following section, we will respond to our
research points (refer to Figure 3). First, we bring up
reflections to discuss the value of IoT data as an
enabler to drive the organisational transformation
towards servitization and its causality as explored in
the internal experiments and analysis. Second, we
discuss the emerging managerial implications from
this longitudinal study. Finally, we provide our
empirical evidence on how scholars and practi­
tioners can address mutual interests when applying
the ADR method to a transformation project.
8.1. IT and data as enablers to servitization
development
In this section, we present reflections to discuss how
the IT and IoT data as enablers drive the organisa­
tional transformation towards servitization and
explore their causality as seen in the internal experi­
ments and analysis. The intention is to present the
descriptive knowledge from designing, developing,
and implementing interventions. According to
Barney (1991), value, rareness, imitability, and substi­
tutability are the four empirical indicators which cate­
gorise potential resources’ characteristics that can be
used to create a competitive advantage. If a firm can
maintain such conditions for its resources, it can gen­
erate a sustained competitive advantage. We demon­
strate that the emerging IoT data resource and well-
established IT can be enablers of the vital resource to
drive servitization development. As a result, the two
prescriptive resolutions we extracted from the three
iterations also have threefold implications on IS and
servitization literature.
First, the research design brings a new perspective
to look into the design of a servitization project for
scholars and practitioners. It extends the discussion in
the servitization literature that the data are mainly
seen as monetising data to offer a digital service or/
and form a business strategy (Liozu & Ulaga, 2018).
We propose a set of design principles, namely the
“product-in-use” model to design and develop a data-
driven approach to utilise IoT data value and support
the development of servitization from an operational
perspective (Bigdeli et al., 2017; Chen & Møller, 2019).
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 17
This innovative thinking opens up a new angle for
exploring data value. So, the engineering deliverables
should not be limited to squeezing data value from the
original defined context (mainly for fulfiling the busi­
ness purpose). It should also consider environmental
factors. Empirical data show that the seed of servitiz­
ing thinking can also be planted through the hands-on
cooperating process of developing a purposeful IT
artefact across functional teams.
In addition, we also advocate the latest blackboxing
research, which pinpoints that the need for managing
data exploration is of the essence in the digitalisation
era (Winter, 2019). Scholars in IS and servitization
domains should consider that digital-enabled serviti­
zation is one particular case in the digitalisation trend.
So, by demonstrating more data-driven cases, we can
better develop the data-driven mechanism sophisticat­
edly to support business organisations to accommo­
date the growing heterogeneous data.
Third, the PSP experiment results provide empiri­
cal evidence that the power of using IT and IoT data in
the right defined context can generate valuable mar­
keting insights and stimulate service thinking in the
organisation. We recognised this contribution from
the managers, who participated in the evaluation
meetings (refer to Table 1 and Appendix 3.2.2), and
from the digital product manager’s feedback. These
exploitative business insights and managerial explana­
tions are becoming unique organisational resources
for firms to develop their value propositions. The
more practice with this data-driven process, the better
the unique sustained resource (Barney, 1991; Mata et
al., 1995) that the firm possesses. In addition, the
exploited customer-based insights (based on the pro­
duct-in-use concept) from the consolidated data set
are considered the reference KPIs to boost the devel­
opment of servitization as well.
8.2. Managerial implications
8.2.1. IT department’s responsibilities and dilemma
in transformation
To take this research one step further, one of the inter­
esting questions we are able to answer is how the data-
driven approach impacts the IT department and the
servitizing organisation. IS and servitization literature
gave us a very vague answer on this matter (Bustinza et
al., 2017; Coreynen et al., 2017; Dinges et al., 2015).
Most servitization studies argue and provide empirical
evidence for using IoT data to create concrete results in
the business model (Ju et al., 2016) and/or value-adding
product-service systems (Rymaszewska et al., 2017; De
Senzi et al., 2016) rather than focusing on the process of
how to deliver the organisational changes. So, servitiza­
tion is still considered a black box (Kamal et al., 2020).
18 K.-L. CHEN ET AL.
In this study, we applied the ADR approach to
engage with the selected firm and explore how the
organisational setup and its existing processes might
create constraints on the development of a data-driven
approach. In other words, we tried to reveal how the
IT department and cross-functional teams align their
responsibilities in this digital-enabled servitization
journey. We extracted our learning regarding the
interaction between IT and other departments from
the three iterative engagements.
At the start of this study, we struggled to create the
product-service platform based on the behaviour of
the IT department for the following reasons. First,
the organisation was in the initial stages of making
changes. In Mintzberg and Westley’ world, all
changes begin with learning (Mintzberg & Westley,
1992). Before the internal stakeholders (either the
individual worker or managers) inquire about
insights into emerging situations, no changes or
shifting of their mindset will have occurred. That
was why, after the innovation workshop, there was
no obvious enthusiasm for adopting the data-driven
approach. The only immediate needs were those of
the business developer, who was willing to under­
stand more about the data and explore the potential
benefits of using data assets to support his arguments
in the business plan. The information he needed was
what markets or customers are available for the
applicable product systems, where the markets or
customers are ready for the digital service. Second,
problems existed because of the organisational setup
and its inflexible process. The IoT/IoS was developed
in the R&D department; therefore, the authorisation
for managing and using these data assets belongs to
the R&D department. However, the enterprise data
asset was the ERP system, which was managed by IT.
Without a strong business motivation (in this case, a
need to seek information to support decision-making
regarding understanding the product-in-use mar­
kets), it is hard to establish joint cooperation. Also,
it is impossible to recognise the connection between
the two heterogeneous data sets without a clearly
defined objective. However, the intuitive thinking
related to calculating the potential return on invest­
ments (the comparison scenarios in the number of
customers purchasing the product systems and the
software product vs. the number of product-users
connecting to the IoT/IoS platform) inspired us to
look for a more comprehensive method for exploring
the value of data. It also led us to dialogues further
with the R&D, marketing, and sales units. Therefore,
we argued that practitioners and IS scholars need to
consider forming multi-disciplinary teams from the
beginning to explore a complex transformation pro­
ject like this one in order to leverage a firm’s poten­
tials (e.g., data, domain experts knowledge,
organisational resources). To do so, we can also
explore the success factors or/and limitations in
working on a digital-enabled servitization project.
We hope to understand the limitations of applying
the data-driven principle and seek more empirical
evidence on aligning the responsibilities between
the IT department and cross-functional teams.
8.2.2. Communication is the key to drive
organizational changes
Our learning is composed of three iterative engage­
ments using an ADR approach. The evaluations by the
direct system’s users gave them a second chance to
learn and grow from how they handled the previous
changes. This provided us with a concrete learning
platform to observe what should be changed at the
organisational content and process levels. Ackoff et
al.’s (2010) systems thinking was applied to examine
the changing environment. The evaluation focused on
“the relationships (rather than unrelated objects), con­
nectedness, process (rather than structure), the whole
(rather than just its parts), the patterns (rather than
the contents) of a system, and context (Ackoff et al.,
2010)”. Instead of answering the question concerning
– what changes should be made in servitization (as
most of the case studies did), we were able to answer
the question of how to address emerging change
because we dealt with those changes in the develop­
ment processes.
We observed three main areas and experienced
changes when the IoT implementation was at the
centre of the servitization development. First, task
owners needed to change their mindset regarding
servitization tasks. This “used-to” operational routing
logic determined how they communicated/inquired
about information from other teams. In the develop­
ment of servitization, task stakeholders should be
more concerned about for whom they are designing
this new digital service and should seek new pro­
cesses and collaboration within the internal organisa­
tion. Also, they need to create a two-way
communication. This means that if there is a change
in the operational logic, the counterpart needs to be
open-minded to listen to the difference and to under­
stand this new way of thinking and behaviour to
support the emerging request. This dynamic, positive
feedback loop explains why organisational changes
always take a long time to unfold. They happen
only in iterative situations because people need to
learn the emerging patterns and then experiment in
response. Last, hidden deep under the manufacturing
firm’s cornerstone of the business system is the mas­
ter data (e.g., in the ERP system). The ERP system
mainly addresses the perspective of product thinking
because it serves the mission, tracks, and traces how
these goods are produced and delivered to the right
customers in the right place at the right time.
However, to design and promote relevant digital

Figure 16. Building intervention and evaluation loops and outcomes (adapted from Sein & Rossi, 2019).
services, we must understand the capability of smart
products. This capability is about the physical func­
tionality of the system and how the end-users employ
it in their production environment. Later emerging
needs make today’s business system incapable of
supplying the necessary information to internal sta­
keholders, but we gain supplemental information
from the available IoT/IoS data sets.
8.3. Reflection on the research approach
In general, the ADR approach provides an excellent
guideline for conducting such a highly complex pro­
ject to investigate the development and use of an (IT)
artefact in an organisation (Sein et al., 2011). This
methodology has helped us to scope this research as
an interdisciplinary study. By adopting the ADR
method, we can study one defined objective from
two examination layers. It is unlike an ordinated case
and/or DS study, which investigates from a single
perspective. It, therefore, limits the findings to one
perspective. In this research, we were able to collect
first-hand data in the broader spectrum and assess the
cause and effect regarding this emerging IoT develop­
ment in the servitization context. Besides, the ADR
approach provides a rigorous method to look into the
practical problem and secure this research’s relevance
to the industry.
However, we also argue that the ADR method can
do much more. The approach is about reshaping the
specific use context of the artefact within the organisa­
tion. The investigated goals of each iterative engage­
ment might begin with a conflict between existing
processes, but they end up with the innovative inten­
tion of using the constructed artefact. For example, in
this case, managers also saw the PSP as a reference KPI
system, which can be used to communicate with both
business customers and end-users. Therefore, we
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 19
argue that the completion of Sein’s and Rossi’s models
should also involve constructing the use context (see,
Figure 16), rather than being limited to testing the
utility only. Therefore, the functionality and limitation
of the artefact will be set within this boundary by the
users.
To conclude this longitudinal study, the lessons
learned contribute to the research in three directions:
First, we argue that IT and data are enablers to servi­
tization development. The more practice with utilising
explorative data assets, the better the unique sustained
resource (Barney, 1991; Mata et al., 1995) the firm
possesses. Second, developing servitization is more
than handling the challenges of developing value-
added (digital) services and innovative business mod­
els. More fundamental soft organisational changes
must be built to support servitization tasks. Third,
we argue that adopting the ADR method is more
than investigating the development and use of an IT
artefact in the organisation. The method also enables
us to examine the evolving use context of the artefact
within the organisation. However, to practice this
ADR approach, researchers and practitioners need to
be open-minded to exploring possibilities from the
existing environment. Also, to develop a rigorous IT
artefact for a specific context (e.g., in this case, servi­
tization), cross-domain experts are needed to co-
design the artefact, the processes, and deliverables.
9. Conclusions
Servitization is a well-recognised phenomenon in the
manufacturing industry. Evidence demonstrates that
business potentials stem mainly from the marketing
research perspective on servitization. However, due to
digitalisation and the implications surrounding smart
products, researchers from adjacent fields are also
looking into this phenomenon. This paper applied
20 K.-L. CHEN ET AL.
the resource-based view (RBV) to argue how to value
IoT data and explore their potential and impact on
servitization. We examined the evolving role of IT,
particularly IoT, and data in the servitization journey.
This study set a broader spectrum of research back­
ground (see, Figure 1) to demonstrate the double
effects of IoT and data in servitization. It can be
from both marketing and operational perspectives.
However, through the engagement with ADR, we
zoomed in on the operational perspectives and inves­
tigated these four points: (1) the value of IoT, (2) the
business system design, (3) managerial implications,
and (4) ADR in joint IS and servitization literature.
Three iterative experiments were carried out with a
product-centric manufacturing firm that had
embarked on its digital-enabled servitization journey.
As a result, two prescriptive resolutions and three
descriptive reflections were extracted from the three
iterative engagements and contributed to the joint
domains of servitization and information systems
literature.
To the IS knowledge, the prescriptive focus was on
the design principle of the data-driven approach (the
aggregated effort of IT and data) that put the “in-use”
concept at the centre when considering exploring the
data value to support the servitization development.
Second, we elaborated on the impact at the system
level, discussed how the business system might be
reshaped and used to facilitate the organisation’s ser­
vice thinking and promote operational development
in servitization. This study provides empirical evi­
dence that exploring data value to support decision-
making in the digital-enabled servitization context is
more complex and similar to a black-boxing data-
driven exploration (Winter, 2019). Purpose-driven
(e.g., the “in-use” concept, in this case; see, Figure
14) is becoming the central assessment point when
aligning with the cross-functional business stake­
holders and exploring the heterogeneous data sets.
In addition, we have provided insights to shed light
on the servitization literature from an operational
perspective. First, digital service is a foreseen type of
soft product for manufacturing. It leads to the genera­
tion of additional heterogeneous data assets and new
business models. It is vital to value these (heteroge­
neous) data assets for managers to support strategic
managerial decision-making. Therefore, we argue that
the firm can create a competitive advantage if it knows
how to manage and transfer its growing data assets to
become a great sustained resource pool (Mata et al.,
1995) because the value of data is self-explanatory, as a
resource with heterogeneous, hard-to-imitate, and
rare characteristics. A firm having such resources
needs strong managerial skills to explore the value
behind its presenting forms to meet the business
goals. We further evaluated this argumentation
through iterative engagements with the case firm and
provided our first-hand insights on the impacts at the
organisational and process levels. Therefore, we argue
that the operational condition (see Figure 15) will be
changed. The key to this transformation is manage­
ment skills in recognising the problematic situation
and bootstrapping the available organisational
resources, including using the explorative data
insights to support the strategic decisions. So, the
explorative data can be used as KPIs to measure the
performance improvement in executing the servitizing
activities along the transformation journey.
We hope to use this case to highlight the impor­
tance of interdisciplinary research between IS and
servitization. Digitalisation is an inevitable trend in
today’s business world; increasingly, B2B manufactur­
ing firms are adopting the IoT/IoS idea to go down­
stream to their end-users. The challenge is how they
can reform their organisation to be quicker and smar­
ter. Thus, we suggest that future servitization research­
ers investigate further how IT and data impact the
organisation with respect to both technical and socio­
logical aspects; in other words, they should investigate
how to use the socio-technical systems lens to evaluate
what socio-technical conditions of a servitizing orga­
nisation might be changed and how to conduct such
changes effectively. It will also help practitioners if
there is a new method to learn the emerging patterns
(Snowden & Boone, 2007) to quickly restore a com­
plex operations environment to a complicated one.
Thus, there is a need to investigate further how firms
handle this new asset if they choose to take a digital-
enabled servitization path. Furthermore, there is no
doubt that all kinds of online data will arise, similar to
IoT data. IS researchers shall look into how to re-
structure these parts of emerging data and processes
to support managers facilitating the dynamics changes
in the external environment, business system, and
immediate problem space.
Although this single study with a clear set of propo­
sitions is an excellent representative case, it has limita­
tions. In the future, we will continue to engage closely
with the case firm to investigate further the impact of
this data-driven approach and the firm’s performance.
ADR might be another scientific approach for engaging
with practitioners for researchers interested in studying
the operations perspective of servitization. It creates a
learning-by-doing environment for internal stake­
holders involved in the project to share their expertise
and co-develop the outcome to achieve the same goal.
However, the ADR approach as a research method also
has its challenges, which also merit further research.
Acknowledgments
This work is part of the research program MADE SPIR
(Manufacturing Academy of Denmark — Strategic
Platform for Innovation and Research) with grant # 3067-

00001B, which is (partly) financed by the Danish Innovation
Fund. It aims to bridge the knowledge gap between scientific
research and practitioners’ dilemmas. We are grateful to the
editor-in-chief, associate editor, and three anonymous refer­
ees who provided very insightful comments.
Disclosure statement
No potential conflict of interest was reported by the author
(s).
Funding
This work was supported by the MADE SPIR
(Manufacturing Academy of Denmark — Strategic
Platform for Innovation and Research) [grant # 3067-
00001B].
ORCID
Kuan-Lin Chen http://orcid.org/0000-0002-9658-0147
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Appendix 1: data collection steps, methods, and participants

Table A2. Investigation setups, data collection methods, and participants.

Timeline Stage 1 Stage 2 Stage 3
Innovation Participated Semi-structured
Participations workshop Alpha orientation Beta interview Gamma
Investigating the internal user groups Operational Business Developer V 1 1
perspective R&D Developer V
Digital Product Coordinator* 1 1
Digital Product Project Coordinator 1
Industrial Domain Expert, Interface Engineer, and User Experience V
Engineer
Managerial CTO 1 1
perspective Product Manager 1
CFO/CIO 1 1
IT Manager 1
CSO 1 1
Digital Product Manager* 1
Marketing Manager 1
Global Support Manager 1 1
CEO 1 1
Developing data-driven innovation ADR Researchers 1 researcher in the Business Information Management field V V V V V V
projects 1 researcher in the Computer Science domain V
5 master’s students in Operation Innovation domain V
Servitization team Business developer V V V
R&D developer V V
Digital Product manager* V V
Markets team Marketing Manager V
IT team Data specialist V
ERP specialist V
IT manager V
Total # of interviews 5 full days 7 11
EUROPEAN JOURNAL OF INFORMATION SYSTEMS
23
24 K.-L. CHEN ET AL.

Table A3. Evaluation steps, methods, and participants.

Timeline Stage 1 Stage 2 Stage 3
# of # of
# of evaluation evaluation evaluation
Participations Alpha interview – A Beta interview – B Gamma interview – C
Developing data- ADR 1 researcher in the Business V V V
driven innovation Researchers Information Management
projects field
1 researcher in the Computer V
Science domain
5 master students in Operation V
Innovation domain
Servitization Business developer V V V
team R&D developer V V
Digital Product manager* V V
Markets team Marketing Manager V
IT team Data specialist V
ERP specialist V
IT manager V
Evaluation data- Senior ADR 1senior researcher in the 1 1 2
driven innovation Researchers Industrial Engineering field
projects 1senior researcher in the
Innovation / Change
Management field
Product-service Business developer V 1 V 1 V 1
operations Digital Product Manager* 1 V 1 V 1
users Global Support Manager 1
Marketing manager V 1
Management CTO 1 1 V 1
users IT manager 1
CSO 1
Total # of interviews 4 5 8

Appendix 2: Semi-structured interview
questions (used in the investigation of the
Gamma iteration)
Q1: How do you see the impact of servitization in the firm?
● What impact may the firm experience because of the
critical elements of servitization: “Digital technology” +
“Process” + “Data”?
Q2: How do you see the current teams’ setup in opera­
tionalising the development of (digital) product-service inte­
grated solutions in the firm?
● Expectations for further strategy change?
● Challenges in executing strategies to operationalise?
Q3: Servitization brings up the business relationship to go
beyond box-selling. How do you see the setup of the current
strategies linked to servitization? Have you experienced any
challenges in carrying out those defined strategies? If so,
please name some.
environment (to gather more relevant information, cre­
ate an efficient process, and have better communication)
to operationalise the currently defined strategies?
Q5: What challenges have you experienced in operatio­
nalising because of servitization? What changes have you
made in leading your teams?
Q6: What is your opinion about the role of the current
enterprise business system (in the organisational procedure,
communication model, and IT system)? Is it able to carry out
the relevant data/information generated from the new activ­
ities (e.g., design, support, and promote the advanced
service)?
Q7: From a strategy perspective, servitization targets soft
values such as service and data, to earn potential profits via
helping customers improve their productivity. What are
your opinions about this strategic movement? What are
your opinions about the value of data?
Q8: Servitization means to investigate “product-service
excellence”. How do the current performance system (e.g.,
KPIs) and managerial tools help?

● What points of the changes in strategies you have con­
sidered and what actions have you taken?
Q4: How do you see that the firm’s culture has changed
because of the extension of the business orientation from the
development of “(digital) product-service integrated
solutions”?
● How do you address the changes in this core value?
● What are your opinions on the capability of the relevant
functional teams in performing product-service excel­
lence? What would you do to create a better-fit
Appendix 3: The log of Three Iterations
Appendix 3.1. The Organizational Impact of External
Factors: The Alpha Iteration
The objective of the alpha iteration was to understand
how external factors, such as the development of the IoT
and IoS, impact the organisation in the context of servitiza­
tion. The project began with a five-full-day innovation
workshop with participants across-functional teams (see
Appendix 1, Table A2). The goal was to get to know the
competitive business environment the firm was facing and
then to initiate a feasible and envisioned advanced service

offering that provides added value for their end-users. The
service offering can also secure the business as the market
leader in the industry. Design thinking was used to facilitate
this conceptualisation process.
The ADR researcher participated in the innovation work­
shop to get an overview of the problematic context and to
initiate a potential direction for cultivating servitization
development. Thus, the role of the ADR researcher was to
observe the organisational development atmosphere, parti­
cipate in the discussion, and look for hidden information
links to propose a mechanism for probing and sensing
possible directions for expediting development. In addition
to the practical tasks, the ADR researcher was to investigate
the potential misalignment of servitization development
between the research community and practitioners.
The alpha version was developed with the business devel­
oper after the innovation workshop. The goals at this stage
were to extract the available business insights from the
installed smart product systems (the data from the first
version of the IoT platform and experts’ knowledge). The
first attempt at exploiting the information was to indicate
the number of potential end-users, who were potentially
“in-use” products. The outcome of the alpha version was
to present a sort of conceptual method to bridge the critical
value of data from ERP and IoT platforms. The explorative
data were carried out in the Microsoft Excel spreadsheets.
The explorative data value from this version was used to set
up the initial business plan. So, the business developer can
have the evidence-based data to pitch a high-level servitiza­
tion plan to executive officers. The initial design essence of
the artefact, the product-service platform (PSP), was exam­
ined and evaluated with the business developer and senior
managers. They were responsible for developing the servi­
tization tactical plan (see Appendix 1, Table A3). It was also
confirmed that “in-use” value-adding information was miss­
ing from the current enterprise system relative to making
confident decisions. Managers were looking for this infor­
mation when struggling to transform.
Appendix 3.2. The Organizational Impact of the Data-
Driven Approach in The Servitization Content and
Context
Through carrying out the alpha iteration, ADR researchers
also gradually observed conflicts within the organisation.
During the innovation workshop, the European sales director
stated, “We are a system provider; we should stay where we are.
Such innovative product-service offerings would not bring us
extra profits but consume our resources”. Some strong believ­
ers would not support broadening the core competencies that
the firm had had for years and did not believe this type of
innovation could bring financial profits. To understand these
concerns arising from the middle and bottom levels of the
organisation, we conducted two iterative engagements: beta
and gamma, in which we intended to use the exploitative IoT
data to support managers’ decisions in developing digital
servitization. Through the development of IT artefacts, we
learned what to change and how to deal with the organisa­
tional changes at the process level and how to evaluate its
contributions together with the management team.
Appendix 3.2.1. Beta Iteration
The ADR researcher participated in orientation meetings
to develop a comprehensive understanding of the case com­
pany’s existing working process and organisational culture.
The purpose of attending these orientation meetings was to
get comprehensive knowledge of the history of the firm, the
EUROPEAN JOURNAL OF INFORMATION SYSTEMS 25
available smart product systems and configurations, the
present organisational tactics, the technical information
infrastructure, and business processes (see Appendix 1,
Table A2). In this iterative engagement, two other groups
from the case company participated and a group of graduate
students, who had been invited to work on the beta version.
The goal of this iteration was to investigate potential
changes in the organisational environment when trying to
consolidate two heterogeneous data sets. In addition, we
aimed to gain a comprehensive view of how managers
adopt value-added information from the exploration of
IoT data (which we later called the product-service plat­
form) to make tactical decisions about promoting the devel­
opment of advanced services and associated business ideas.
During the orientation meetings, the ADR researcher
observed that news about the firm servitizing was spreading
within the organisation. However, senior management
recruited only a small project team to work on this topic.
Thus, there were two attitudes towards servitization. One
attitude was held by those who would not be immediately
impacted by the servitization project and doubted the ration­
ality of expanding the business direction towards digital ser­
vices. They also mistakenly thought that the firm would lose
its core strengths and move its business focus to digital
services. A prominent voice of resistance rose up among the
middle management teams. A one-day servitization work­
shop took place to mitigate such noise, and an expert was
hired as a consultant to preach the rationality of this move­
ment, its benefits, recommended areas of change, etc. The
other attitude was held by those in the operations cycle of the
servitization project, who understood the need for the trans­
formation but struggled to find reasonable grounds for their
actions. For example, the digital product manager found it
hard to seek further operational supports when he did not know
which markets or customers had the greatest potential for the
ongoing development of digital services. He was aware of his
job responsibility; however, he had no supporting evidence
for further operational support. It was hard to maintain the
cost-benefit under many uncertainties due to the limitation of
the existing enterprise information assets.
To overcome these barriers, the ADR teams tried to con­
solidate two heterogeneous data sets (ERP and IoT/IoS) based
on geographic information, where the geographic location
was identified by the IP address and customers’ delivery
addresses. In this approach, product-centric thinking was
still adopted. Structured query language (SQL) was applied
to connect the two data sets; then, Microsoft Power BI was
used to present the exploitative business insights. Four eva­
luation meetings were arranged with managers. The purpose
was to investigate the data value of those exploitative business
insights, extracting from the consolidated data set (see
Appendix 1, Table A3). We got a better understanding of
the information demands of the managerial and operational
aspects. In addition, the necessary (invisible/not yet digitised)
knowledge, the limitations of the existing organisational
setup, and the enterprise system (e.g., ERP) were revealed.
In summary, the ADR team members were able to state the
benefits, challenges, and limitations of adopting a data-driven
approach under product thinking.
Appendix 3.2.2. Gamma iteration
The third iteration was set up after a series of semi-
structured interviews with functional managers and execu­
tive officers (see Appendix 1, Table A2). The study was
intended to explore the operational paths of developing
digital servitization. The McKinsey 7S Framework
26 K.-L. CHEN ET AL.
(Waterman et al., 1980) was adopted in the interviews to
understand the synergy created from each union within the
organisation at this development stage of servitization. Nine
managers were asked eight pre-defined interview questions
(see Appendix 2) between June and August of 2018. Each
semi-structured interview lasted from 1 to 4 hours and had
30 hours of interview data in total. The interviews were
recorded for later data analysis purposes. Interview insights
into the interactions between the 7S McKinsey aspects, not
an individual aspect itself, were the goal. Thus, the questions
had at least two facets. Each perspective was generally
applied to more than one interview question to verify the
consistency of the managers’ operational insights. The min­
utes of each interview were summarised, and the document
was emailed to each interviewee. Interviewees were asked to
confirm the accuracy of the data collected (Yin, 2014) to
ensure the effectiveness of the communication.
The chief sales officer (CSO) provided a good summary
of the investigation: “There is no doubt about taking this
servitizing direction; however, transparency about informa­
tion, process, and organization platform needs to be devel­
oped”. Several managers also addressed that they used trial-
and-error approaches to learn about this emerging situa­
tion. A European sales director stated that he did not have
enough valuable information to be the reference for adjust­
ing strategic actions. The managers (CTO, CFO, global
support manager) also experimented with which skills
were necessary and which could be outsourced in terms
of performing product-service-related tasks. Overall, the
interviewee recognised why they were transforming the
firm but had little knowledge of how and what to do.
With an understanding of the environment and available
resources, the ADR researchers designed the third iteration
of the study. This time, a researcher from the computer
science domain was recruited to the team. We aimed to
materialise the identified invisible knowledge (from the
beta experiment) to bridge the missing data links between
two heterogeneous data sets, from the ERP system and the
IoT/IoS platform. A platform called the product-service
platform (PSP) was introduced. It contained three key
results: (1) a web-based platform, providing an interface
to materialise that invisible knowledge; (2) a database,
which consolidated the ERP and IoT/IoS data sets; and
(3) a PSP business intelligence platform, where the pene­
tration of “product-in use” was presented as the potential
market of the digital service.
The data sources for building such a PSP platform came
from the ERP system (e.g., sales order table, customers
information table, etc.) and the IoT platform (e.g., a model
of device). To deliver a solution that could be smoothly
applied to the organisation’s current IT infrastructure, we
investigated two systems’ setups, ERP and IoT. Microsoft
SQL Server and .NET web application were identified to
support the back-end data management and user interface,
respectively. Thus, we selected the Microsoft SOL Server as
our PSP database for managing consolidated data sets. Asp.
NET is used to design and develop the PSP platform as a
web application with a user-friendly front-end interface.
Therefore, the internal stakeholders (functional users and
managers) can easily access the PSP. The preliminary tech­
nical development was described in an earlier publication
(Chen et al., 2019). In principle, this platform can check a
customer/market’s readiness for installing the digital service
based on how well it equips the product system, compo­
nents, and software products. Figure A1 illustrates an over­
view of these relations.
In addition, to sort out the different types of product
systems fitted for the specific digital services, we pre­
sented the four questions below, including the idea of
the “in-use” concept, in the operational pages of the PSP
platform. Therefore, internal stakeholders easily recog­
nised the critical conjunctions of physical and software
products and how one became a smart product and then
a smart, connected product in which smart product
family.
Q1) If the product was sold with the essential local area
network (LAN) devices, would the product itself become a
smart product and have the capability to be the hub to attach
the upcoming digital services (advanced services)?
Q2) What is the assumption of the (end-users’) produc­
tion scenario of using one product system?
Q3) What type of software licence is compatible with
using one smart product?
Q4) What type of software licence is needed for the
compatible upcoming digital service?
The aim was to examine the product attributes from the
perspective of how the smart product could be used, rather
than what it was designed for and to whom it could be sold.
With this mapping idea (see Figure A2), we were able to
close the relationship between product and service and
establish an eligibility loop between the product and (digi­
tal/advanced) service.
To visualise those thinking processes, the PSP users were
given step-by-step guidance in the platform to link the “in-
use” products from the IoT dataset to the sold smart, con­
nected products from the ERP dataset. A web application
using ASP.net(C#) was designed as a framework. The PSP
web application had three core layers (see Figure A3): the
data process layer, the data storage layer, and the data
visualisation layer.
In the third iteration, we completed the design essence of
the PSP and evaluated this ensemble artefact in two layers: a)
technical concerns and b) organisational changes, and c)
impacts on the process and content. Seven meetings were
arranged with the relevant internal stakeholders (see
Appendix 1, Table A3) to receive comprehensive feedback
on this data-driven creation and its impact on the organisa­
tional changes.
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 27

Figure A1. An overview of product relations.

Figure A2. Four questions build a closed-loop relationship for the product-service.

Figure A3. The architecture of the product-service platform.