Outcome-based service capabilities: A case study of service capability maturity in adopting outcome-based service model
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School of Business |
Master's thesis
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Date
2024
Department
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Mcode
Degree programme
International Design Business Management
Language
en
Pages
51+7
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Abstract
Industrial companies are transitioning towards outcome-based services (OBS) due to their potential benefits, including stable revenue streams, enhanced customer relationships, and differentiation from competitors. Although significant research has been conducted on the broader concept of OBS, there remains a gap in studies that focus on the specific capabilities required for successfully implementing and sustaining OBS models. This study aims to provide a comprehensive understanding of the OBS process, identifying the capabilities necessary for its effective adoption. The research is dedicated to exploring the service capabilities of a particular company, addressing two key questions: What are the firm’s capability maturity levels regarding outcome-based service? And how can these capabilities be improved to support the company's transformation towards an OBS model? To answer these questions, six semi-structured interviews were conducted within the case company, which operates in the industrial manufacturing sector. The findings indicate that the company is at the "defined" level of maturity in most capability areas, but there is considerable room for improvement, particularly in feedback gathering and the innovative sales process. Interviewees highlighted key challenges in customer segmentation, value-based pricing, feedback management, and resource management. Based on the findings, the study suggests several managerial implications. First, the case company should prioritize developing its sales and pre-sales processes, rather than focusing exclusively on service delivery and R&D. Additionally, improving negotiation and communication skills with customers is critical for OBS success and requires dedicated attention from management to ensure long-term success.Description
Thesis advisor
Turunen, TaijaKeywords
outcome-based service, capability maturity, outcome-based capablities, business model