Overcoming Institutional and Capability Barriers to Smart Services

Smart services have potential to improve value creation and profitability of industrial firms and their customers. Defined as services that go beyond the upkeep and upgrades, traditionally bundled with products and helping companies to build intelligence— that is, awareness and connectivity. Combined with digitalization, services have had a major role in improving efficiency of existing offering and enabling new channels for service delivery. Implementing the change toward smart services is challenging. Research shows that especially industrial companies maintain institutionalized beliefs and attitudes impeding the transformation, lack capabilities and resources for implementation, and face industrywide norms and relationship practices resisting the change. The study explores the barriers in adopting smart services and is implemented as a multi-case study among six globally operating industrial companies. Our findings indicate classification of internal barriers, capability gaps, and external barriers, contributing a framework that describes the interplay between institutional forces and capability development in organizational change.