Exploring the landscape of digital servitization: A systematic review

2.1 Search strategy

The Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach was used in this systematic literature review (Farisyi et al., 2022; Liberati et al., 2009; Moher et al., 2015). The PRISMA approach ensures transparency and clarity in reporting systematic literature reviews by using an evidence-based checklist (Ginting, 2024b) connected to a four-phase flowchart. By applying the PRISMA approach, one may reduce bias, lessen the impact of chance, and improve the quality of data analysis.

The information search was carried out on a comprehensive academic research database, specifically Elsevier (SCOPUS), which houses extensive collections of scholarly literature. The search included articles published between 2019 and 2024 to ensure the literature used in the research analysis remains current and up-to-date. The search was completed on January 15, 2024.

2.2 Inclusion and exclusion criteria

Two sets of keywords associated with the concepts of servitization and digitalization were chosen and utilized in tandem. The selected keywords for this research are as follows: ‘digitalization OR digital AND servitization OR servitisation’. The Inclusion Criteria (IC) employed as guidelines in conducting the Systematic Literature Review are outlined below:

IC1: Articles are original documents that have undergone a peer-review process and were published between 2019-2024.

IC2: Articles are original documents written in the English language.

IC3: Research that employs quantitative methods.

IC4: Studies aimed at identifying factors influenced by digital servitization.

In detailing the Inclusion Criteria (IC), IC1 emphasizes that only articles that are original documents and peer-reviewed, published between 2019-2024, will be considered. Furthermore, IC2 indicates that the selected articles must be in the English language. This is because research conducted in English generally provides the most current information for that period, ensuring more accurate updates. IC3 ensures that only research using a quantitative approach will be taken into account in this study. Quantitative methods are used to collect numerically measurable data, providing a more structured framework for analyzing relationships between variables and identifying indicators in measuring digital servitization. Meanwhile, IC4 underscores that the studies focused on in this research must have a specific aim of identifying factors influenced by digital servitization. Furthermore, articles that were not fully accessible were excluded from the study.

2.3 Data collection

The subsequent step involved identifying publications and conducting practical screening, resulting in the identification of 340 papers. Following screening with IC1 and IC2, 310 studies were excluded, and the remaining studies were moved to the screening phase. At this stage, the titles, abstracts, and keywords of the 310 collected papers were scrutinized for relevance to the research objectives, resulting in 62 studies. Subsequently, the full text of the remaining 62 publications was meticulously reviewed, with only articles deemed capable of contributing to answering the research questions being selected. Ultimately, based on the predefined criteria, namely IC3 and IC4, 26 papers were chosen and analyzed to compile knowledge in this research field and identify potential knowledge gaps and future research directions.

2.4 Data items

The information gleaned from each article is outlined systematically, encompassing details such as the publication year, authors, country of origin and sample size, research aims, variables examined, aspects affected by digital servitization, and findings concerning its influence on dependent variables. Figure 1 provides a comprehensive depiction of the stages involved in this systematic literature review (Figure 1 also uploaded in Ginting (2024a)).

Figure 1. Flowchart illustrating the process of literature selection reviewed using PRISMA.

Each study was independently assessed by four authors. To ensure objectivity and reduce the likelihood of bias in the evaluation process, the authors worked independently. Any discrepancies between the authors’ assessments were resolved through discussion and consensus.

2.5 Data extraction and synthesis

To determine the degree of information completeness in accomplishing the research objectives, data was gathered from all of the chosen papers. A more thorough summary of the studies that need to be studied and how they can particularly answer the research questions is also provided by the extraction process. These actions are predicated on the previously mentioned selection procedure. After extraction, the data is sorted and entered into a worksheet. Cruzes & Dyba (2011) suggest using thematic synthesis to synthesize the findings. Additionally, an integrated synthesis process technique is used to guarantee that all study goals are met.

3.1 Research results and qualitative synthesis

The SCOPUS database search using the keywords (‘digitalization OR digital AND servitization OR servitization’) produced 340 papers published between 2019 and 2024 in English. These papers underwent examination and selection based on IC2 and IC3 criteria, focusing on titles, abstracts, and keywords, resulting in 62 articles remaining. One article remained inaccessible or uncategorized among those excluded or not researched. Ultimately, 26 articles were left for further analysis after this procedure. Selected articles are uploaded in Ginting (2024c) using Figshare.

Numerous journal publications on digital servitization are issued each year, with a notable increase observed in 2019. These journals utilize a combination of qualitative and quantitative methodologies. This trend underscores the ongoing relevance of research on digital servitization in recent years, as illustrated in Figure 2 below.

Figure 2. Distribution of selected studies over 5 years.

Between 2019 and 2024, numerous countries, including China, Finland, France, Germany, Italy, Norway, Spain, Sweden, Switzerland, and the United Kingdom, contribute to journals addressing digital servitization. Recent data indicate the ongoing relevance of research on digital servitization in these countries, as illustrated in Figure 3.

Figure 3. Country production over time.

Based on an analysis of reputable international journals, the percentage data of articles published in 18 major fields of study over the last five years is presented in Figure 4. 35% of the articles focus on business, management, and accounting. Engineering and computer science represent 17% and 13% of the total scholarly publications. The dominance of publications in applied fields such as business, engineering, and computer science reflects the dynamic needs of the industrial world for innovations in business models, technology, and digital solutions in the current era of the Industrial Revolution. Meanwhile, the smaller proportion of articles in decision sciences and other fields indicates the limited scope of multidisciplinary studies and fundamental research in addressing the complex challenges faced by modern society.

Figure 4. The percentage of scholarly publications based on fields of study.

Additionally, a qualitative synthesis was conducted on the 26 chosen articles, as illustrated in Table 1.

3.2 Systematization for searching dual role of digital servitization

Building upon the analysis of the 26 selected articles, determinants of digital servitization are further scrutinized utilizing the following additional criteria:

Considering the criteria above, Table 2 presents the determinants, items, result, conclusion, and references related to digital servitization.

Apart from examining digital servitization as a dependent variable, this research also considers it as an independent variable. Table 3 below presents the variable responses, items, results, conclusions, and references related to digital servitization as an independent variable.

4.1 RQ1: What are the definitions of digital servitization based on previous literature?

Digital servitization is a multifaceted and continuous procedure, given its amalgamation of servitization and digitalization (Chen et al., 2021). As businesses increasingly integrate digital technologies and reshape their business models, they must confront the challenges and opportunities inherent in this transition, including adjusting to more dynamic and interconnected markets (Chen et al., 2021). Digital servitization can occur within ecosystems, where companies work together to create value-creating and capturing systems (Kohtamäki et al., 2019).

Employing digital technologies like big data and cloud computing empowers companies to gather and analyze extensive datasets, offering valuable insights and stimulating innovation (Hacioglu, 2019). Digital servitization frequently entails adopting novel business models centered around offering packages comprising products, services, and digital tools like IoT, big data, and cloud computing (Hacioglu, 2019). Digital servitization enables connectivity between products, services, and customers, allowing for better monitoring, control, and optimization (Chen et al., 2021).

Digital servitization, as defined by Parate et al. (2022), encompasses leveraging digital technology to elevate existing business models or devise new ones. In order to further develop this idea, Paschou et al. (2020) present a digital servitization maturity model that includes elements like strategy, business procedures, customer experience, and organizational culture. In their contribution to this conversation, Tronvoll et al. (2020) identify three critical turning points that are essential for successful digital servitization: moving from hierarchy to partnership, from scarcity to abundance, and from planning to discovery. Finally, Lerch & Gotsch (2015) examines the fusion of digitalization with service innovation, underscoring the potential ramifications for service provision.

4.2 RQ2: In which industries is digital servitization extensively researched?

Research Question 2 (RQ2) delves into the industries where digital servitization has been extensively researched. A review of the literature indicates that, in the context of digital servitization, a wide range of industries have garnered substantial scholarly attention. Digital servitization study finds a dominant domain in the manufacturing industry. Several research papers examine the incorporation of digital technology into conventional manufacturing processes, delving into the ways in which this transition to service-oriented business models impacts the performance, sustainability, and innovation of firms. Another notable industry is the information technology (IT) sector, given its intrinsic connection to digital technologies. Research in this domain often focuses on how IT firms leverage digitalization to offer innovative service solutions, enhance customer experiences, and drive competitive advantage. Additionally, the automotive industry garners considerable attention, with studies exploring how automotive companies embrace digital technologies to offer value-added services alongside traditional product offerings. The healthcare sector is also a significant area of research interest, particularly regarding the adoption of telemedicine, remote patient monitoring, and personalized healthcare solutions. Moreover, the financial services, retail, energy, and telecommunications industries all feature prominently in digital servitization research, reflecting the widespread adoption and impact of digital technologies on business models, value propositions, and customer experiences across diverse sectors. Understanding the nuances of digital servitization within specific industries is crucial for practitioners and policymakers navigating the evolving landscape of service-driven economies.

4.3 RQ3: What are the determinants variable of digital servitization?

Research Question 3 (RQ3) aims to discern the determinants variables of digital servitization as elucidated in Table 2. Each determinant variable of digital servitization, in a more complex and comprehensive manner.

Digitalization plays a pivotal role in driving the adoption of digital servitization, as digitally mature companies possess the capabilities and infrastructure essential for implementing such business models. In other words, companies actively employing digital technology are more prepared and inclined to adopt digital servitization strategies (Vendrell-Herrero et al., 2017). A study conducted by Kohtamäki et al. (2020) on the relationship between digitization and servitization concluded that the level of adoption of digital technology by a manufacturing company significantly affects its ability to implement the digital servitization business model. This is consistent with earlier findings indicating the positive role of operational digitization and digital infrastructure in enabling servitization in the manufacturing industry (Kohtamäki et al., 2020).

Servitization pertains to the extent to which services are integrated into the product offerings of a manufacturing company. Coreynen et al. (2020) define servitization as the transformation of a business model from a product-focused approach to a solution-focused one by integrating product-service bundles. The higher the adoption of a hybrid product-service business model, the greater the likelihood of the company implementing digital servitization strategies. Both Bortoluzzi et al. (2022) and Rakic et al. (2022) identified a significant positive correlation between the extent of servitization in manufacturing firms and the adoption of digital servitization. This aligns with a longitudinal study by Coreynen et al. (2020), which concluded that as a company’s age increases, it is typically accompanied by an increase in the complexity of product-service offerings, thereby driving the adoption of digital solutions to integrate and manage these offerings.

Manufacturing servitization, refers to the degree of integrating services into the manufacturing operations and product offerings of an industrial company. Neely (2008) defines manufacturing servitization as a phenomenon where manufacturing companies offer additional services related to their products. As the proportion of a company’s revenue derived from services increases, so does the level of manufacturing servitization, providing an opportunity to implement digital servitization to facilitate the delivery of these service values (Neely, 2008; Visnjic et al., 2018). Agarwal et al. (2022) and Chen and Zhang (2021) both concluded that companies embracing a high degree of manufacturing servitization are also inclined to adopt digital platforms and solutions. The aim is to integrate and present product-service offerings effectively. Put simply, there exists a correlation between a high degree of manufacturing servitization and the adoption of digital technology to streamline and improve efficiency in delivering products and services. Consistent with a study conducted by Visnjic et al. (2018), it is concluded that manufacturing servitization creates new opportunities for implementing digital technology to support the operationalization of business models.

Process innovation, refers to the development and introduction of new production, distribution, or management methods by manufacturing companies that significantly enhance the quality and efficiency of their internal processes (Garcia & Calantone, 2002). The more successful process innovations implemented, the higher the flexibility and operational capabilities of the company to adopt the digital servitization business model to enhance service quality for customers (Raddats et al., 2014; Valtakoski, 2017). Opazo-Basáez et al. (2022) and Vendrell-Herrero et al. (2023) found that a higher level of process innovation positively influences the ability of manufacturing companies to implement digital servitization strategies. The transformation and improvement of internal production processes through automation serve as a crucial foundation for adopting the digital servitization business model to enhance the value proposition to consumers (Martín-Peña et al., 2018).

Product innovation entails a company’s creation and introduction of new products or services that represent a significant improvement over previous offerings, based on its performance (Schumpeter & Swedberg, 2021). The more innovative products are introduced, the greater the incentive for manufacturing companies to implement digital servitization strategies to support the delivery of value from these innovative products to consumers (Frank et al., 2019). Opazo-Basáez et al. (2022) and Vendrell-Herrero et al. (2023) found a positive impact of the number of product innovations on the ability of companies to implement the digital servitization business model. The success of developing smart/connected products requires supporting digital service offerings to integrate and optimize the value of the products for consumers (Rymaszewska et al., 2017; Kohtamäki et al., 2020).

4.4 RQ4: What are the factors influenced by digital servitization?

Research Question 4 (RQ4) aims to understand the variables that can be influenced by digital servitization as described in Table 3. Each variable that can be influenced by digital servitization is discussed in a more complex and comprehensive manner in the following explanation.

Developing a unique value proposition that differentiates a business from its rivals is one way to become competitive (Porter, 1997; Chen et al., 2023). Gebauer and Fleisch (2007) claim that servitization enables businesses to make five times as much money from services as they do from products, guaranteeing a consistent flow of income regardless of volatility in the economy and boosting competitiveness. Therefore, businesses can obtain a competitive edge by providing long-term, comprehensive, and high-quality services that are focused on products or customers (Chen et al., 2023). Furthermore, servitization in the manufacturing sector has a big effect on business performance and global competitiveness. Leading manufacturing companies that implement servitization strategies usually hold onto essential components like production, design, and R&D, which allows them to react quickly to needs from around the world (Huang et al., 2024).

According to Miao et al. (2023), servitization plays a mediating role in industrial digitalization’s enhancement of firm performance. By harnessing the advantages of servitization, digitalization eventually boosts business performance. According to Martín-Peña et al. (2020), servitization improves customer interactions, lowers costs, increases efficiency, and provides integrated packages by augmenting digitalization. In a similar vein, Bortoluzzi et al. (2022) found that servitization and firm success were positively correlated. But regardless of a company’s level of technical maturity, Rakic et al. (2022) discovered that only Big Data-based digital solutions had a favorable and meaningful impact on business performance. However, in order to fully comprehend the effects of digital servitization, it is important to recognize a number of services that have a detrimental and significant influence on the performance of the firm. Examples of these services include software development, digital solutions, and PRS (Product-Related Services) in low-tech companies.

A company’s ability to create income, turn a profit, and increase its market value is referred to as its financial performance (Westerman et al., 2014). A competitive advantage and maybe better financial performance can result from strategic adjustments made to a business model to make it more customer-centric (by servitization) and data-driven (via digitalization) (Abou-Foul et al., 2021). According to Abou-Foul et al. (2021), there is a possibility for digitalization and data-driven solutions to improve financial performance and servitization. This might lead to the development of more effective market offerings. To realize the benefits of digitalization and attain positive performance effects, manufacturing organizations may need to invest in portfolios of sophisticated services, as digitalization alone may not be sufficient to produce favorable financial performance effects (Kohtamäki et al., 2020). To maximize the benefits of digitalization and improve the financial performance of manufacturing firms, servitization is a prerequisite (Kohtamäki et al., 2020).

By offering unique product-service combinations, sustainable business models and servitization-related competencies have the potential to increase a company’s competitive edge and profitability (Kohtamäki et al., 2024). According to Kohtamäki et al. (2024), a focus on sustainability has a direct negative effect on a company’s profitability. However, servitization plays a positive moderating influence, highlighting its importance in producing profits from this concentration on sustainability. Additionally, Vendrell-Herrero et al. (2023) contend that dual innovation enterprises have higher profitability when they use digital service innovation.

In today’s rapidly evolving business environment, digital servitization emerges as a pivotal strategy for firms aiming to enhance their sustainable performance (Paiola et al., 2021). By offering value-added services aligned with customer needs, organizations can align their objectives, leading to heightened customer satisfaction and overall performance. Through servitization, firms can cultivate enduring customer relationships, fostering a sustainable revenue stream crucial for sustained performance. Moreover, servitization propels product enhancement efforts, as companies continuously strive to improve their offerings to meet evolving customer demands (Behl et al., 2024). Achieving sustainable performance necessitates companies to adapt to market dynamics and prioritize delivering solutions that address customer needs. Behl et al. (2024) argue that digital servitization positively influences a firm’s sustainable performance.

Pham and Vu (2022) define sustainable-oriented organizational performance as an organization’s capacity to efficiently and effectively utilize available resources to understand the interconnectedness of ecological, social, and economic dimensions of sustainability. They illustrate how digital servitization is becoming increasingly vital to organizational success in a sustainable manner by outlining its impact on sustainable-oriented organizational performance. Undoubtedly, a focused approach on these opportunities would enhance operational efficiency (Coreynen et al., 2017).

4.5 implications

For business practitioners, the findings underscore the critical importance of adopting digital technologies and transitioning to service-centric business models to enhance operational efficiency and customer value. Companies should invest in IoT, big data, and cloud computing to create intelligent products and services while developing capabilities related to digitization, servitization, and innovation. This strategic transformation can improve customer experience through better monitoring, control, and optimization of services, leading to higher customer satisfaction and loyalty. Additionally, integrating digital and service-oriented strategies can help businesses achieve sustainable competitive advantages, enhancing their long-term profitability and market position.

For policymakers, the study highlights the need to create and implement regulations that support the adoption of digital servitization. Developing legal frameworks that ensure transparency, efficiency, and investor confidence is crucial. Policymakers should provide incentives for businesses to invest in digital technologies and service-oriented models, such as tax breaks, grants, and other financial support mechanisms. Investing in necessary digital infrastructure, improving internet connectivity, data security, and digital literacy, is also essential. Encouraging collaboration between the public and private sectors can foster innovation and effective implementation of digital servitization strategies by facilitating partnerships and networks that promote knowledge sharing and resource pooling.

The study contributes to the expansion of knowledge by highlighting the need for broader research on digital servitization beyond the manufacturing sector. Future studies should explore its application in various industries to provide a comprehensive understanding of its impacts and potential. An interdisciplinary approach, incorporating insights from business management, engineering, and information technology, can enhance the theoretical framework of digital servitization. This can lead to a more holistic understanding of the concept.

Methodologically, the study suggests the inclusion of qualitative and mixed-methods research to capture the experiential and contextual nuances of digital servitization, providing richer, more detailed insights that quantitative methods alone might miss. Longitudinal studies are also recommended to understand the long-term effects and evolution of digital servitization strategies, identifying trends, challenges, and best practices over time. Conceptually, the identification of key determinant and response variables contributes to the theoretical development of digital servitization. Future research should build on these findings to refine and expand the theoretical constructs associated with digital servitization. Exploring the causal relationships between digital servitization and various performance metrics can deepen theoretical insights, strengthening the theoretical foundation of the field.