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2016-01-28

The value creation pattern of digitised products changes manufacturing business

The digitisation of products is pushing manufacturing industries to change their business strategies and focus on digital service innovation. Research from Halmstad University shows the transformation of value networks within the vehicle industry and provides new insights for a more network oriented business.

Almost everything around us is becoming digital and connected, and industries therefore have to transform their strategies for product and service development. By designing new digital services, connected to traditional products, manufacturing companies are shifting form product-oriented to solution-oriented businesses. The process is not easy – but a newly published PhD thesis presents a model that provides a new understanding for industries during this process.

– Digital service innovation transforms the value networks of manufacturing firms. While digitisation* of products and digital service innovation can be observed in many manufacturing industries, my research focuses on the transformation of value networks within the vehicle industry, says Asif Akram, who is defending his PhD thesis in Informatics today at Halmstad University.

Remote vehicle monitoring and diagnostics

A value network can be described as a set of connections between individuals, between organisations, or between individuals and an organisation. Asif Akram has studied the value network consisting of vehicle manufacturers, transport operating companies, public transport authorities, vehicle dealers, workshops and public travellers.

– Today, digital services provided by vehicle manufacturers are mostly related to safety and security, such as roadside assistance and stolen vehicle identification. However, the opportunity with digitised vehicles is vast, both in terms of providing benefits to the society at large and providing new business opportunities, says Asif Akram.

The benefits to society include more efficient and safe transportation. The benefits to businesses include selling remote monitoring and diagnostics services to public transport operating companies – who in turn can use the information to, for example, effectively manage bus fleets.

An analytical tool

Asif Akrams thesis conceptualises how the value-creating pattern of digitised products transforms value networks of manufacturing firms. A model is presented that reflects how the symbiotic value relationship between the digitised product and digital services transforms the roles, relationships and exchanges in the value networks of manufacturing firms.

– This symbiotic value relationship means that design of digital services is dependent on the use of digitised products. In other words, the services cannot be designed if the products – for example digitised buses – are not in use. The model can serve as an analytical tool to further advance the knowledge on business aspects in digital innovation, says Asif Akram.

*Digitisation is the conversion of analogue information in any form (that is text, photographs, voice, etc.) to digital form through suitable electronic devices so that the information can be processed, stored, and transmitted digitally.

Text: LOUISE WANDEL

Asif Akram is a PhD student at the School of Information Technology at Halmstad University and the Department of Applied IT at University of Gothenburg. Photo: JOACHIM BRINK

Doctoral thesis defence

Time: 28 January, 2016 at 13:00.

Place: Halda, house Visionen, Halmstad University.

Supervisor: Maria Åkesson, Halmstad University

Opponent: Bendik Bygstad, University of Oslo

Examiner: Jan Ljungberg, University of Gothenburg

Title: Value Network Transformation – Digital Service Innovation in the Vehicle Industryexternal link, opens in new window

Updated 2016-01-28