Increasing Customer Value Through Performance Management: Servitization Meets Industry 4.0 – The Convergence

This paper is of a conceptual nature and critically examines the various drivers, benefits and barriers of Servitization and Industry 4.0 to identify a relationship between the two and how this could enable a firm to gain a sustained competitive advantage. Servitization and Industry 4.0 are two concepts where product based firms have drivers to adopt them from their suppliers, customers and external governmental bodies. Research has shown that the benefits of both servitization and industry 4.0 allows firms to increase their performance management as well as boost customer value and co-creation of value. Firms face barriers such as internal resource and capabilities from skills shortages and the requirement of entrepreneurial leadership as well as culture change. The vast pace of advances in technology brought on in tandem with industry 4.0 and other societal changes are pushing firms to evolve in line with these ever changing technologies and the new requirements of customers. Whilst vast amounts of research exists on servitization and industry 4.0 as separate concepts, recent research has identified that the benefits from both can be increased and catalysed by converging the two together to provide further increases to performance management, as well as strengthen customer value through co-creation and ultimately providing a competitive and comparative advantage.