Business models for after sales services—current state and future directions

Abstract

The core strategic decisions describing what, where, how and whom to make business with are defined in the business model. The business models adapted by industry have evolved as a consequence of changes in the business environment, the production processes as well as in technology, and the modern, innovative business models focus on long term relationships, performance-based and value-driven customer offers, and knowledge intensive processes. Other aspects are the increased complexity of the offer itself and a holistic perspective on the full value chain. This paper reviews the literature with respect to business models, business strategy and business innovation for postproduction activities, i.e. operations and maintenance (O&M) services. The purpose is to describe the current state within the area and based on this give directions for future research and development. Four main aspects are found as being important for the successful development of O&M service models: the mix of products and services in customer offers (bundling), relevant setup and metrics for performance-based business models and contracts, Information and Communications Technology (ICT) as an enabler and a prerequisite for business model development, and the need for a holistic view on the value chain by utilising the asset management concept.