Guest editorial: Digital service innovation: ontology, context and theory Free

In recent decades, there has been a growing recognition of the strategic importance of services in driving industrial competitiveness, leading to a surge in multidisciplinary research in service and service-related areas on a global scale (Kreye, 2022). This increased focus on services from academia and practitioners can be attributed to the maturation and widespread adoption of servitization ^[1] as a strategic phenomenon in industrial environments (Vandermerwe and Rada, 1988; Vandermerwe and Erixon, 2023). As a result, research on servitization has given rise to different branches of study, including digital servitization, which holds great relevance for competitiveness in today’s business landscape (Vendrell-Herrero et al., 2017; Kamalaldin et al., 2020). Digital servitization involves leveraging digitalization and related technologies to greatly enhance service offerings. This approach represents a new starting point for service-based competitiveness, with digital interaction and interconnectivity with customers and products being key drivers of business value (Sjödin et al., 2020).

However, despite the inherent capacity of digital technologies in shaping and innovating services, traditional service management frameworks detach service constituents from the technological innovation requirements necessary for digitally-enabled service provision, diminishing the relevance, in some way, of the technological components that support both the development and the delivery of up-to-date innovative service propositions. An overlooked and unexplored debate in service research, brought forth by Opazo-Basáez et al. (2022), reveals the ineffectiveness of service classification in industrial environments and establishes the foundation for the development of this special issue. A prime example of this can be found in the classification proposed by global innovation frameworks, such as the OECD’s Oslo Manual, which categorizes service innovation as a non-technological innovation source. A rather decontextualized and simplistic categorization, particularly for current manufacturing sectors, where service provision cannot be decoupled from digital infrastructures (Kohtamäki et al., 2020; Kowalkowski and Witell, 2020).

In light of the above, the concept of digital service innovation (DSI) arises from an updated and innovative perspective on service provision, in which both the service offering and the technological components that support it represent a single entity that can be adapted in terms of both the service itself and the technology it relies on. Accordingly, the technological building blocks underpinning the service entity enable the continuous reconfiguration of the service design to the benefit of the user/customer experience. In other words, the service itself becomes a digital innovation source that can be completely revamped in relation to the service’s specificities. In this manner, DSI represents a pioneering source of technological innovation, in which digital technologies, interconnectivity, data and learning promote the development of new digital service offerings (based on analytic patterns) in multiple business contexts, enabling firms to align business model component configurations dynamically with users'/customers’ needs.

The objective of this special issue is to establish the research foundations of DSI. This entails a primary focus on unraveling the requirements and mechanisms that underlie and enable firms to adopt a DSI strategy. Additionally, the second major focus of this special issue is on theory development and comprehension of the distinct ways in which DSI implementation varies among organizations and industrial sectors. This includes an examination of the diverse technologies involved in DSI development as well as the organizational factors (such as systems, structures, functions, practices, culture, etc.) that can either facilitate or impede the progress of a DSI strategy.

The collection of papers included in this issue explores three critical strategic themes: (1) origins, progress and challenges of DSI; (2) nature and characterization of DSI and (3) learning, alignment and market dynamics of DSI.

This special issue marks the first of its kind dedicated to the topic of DSI, a research area that traverses multiple lines of inquiry and holds significant promise for future advancement among academics and practitioners. We extend our sincere appreciation to the Journal of Service Management (JOSM) for providing us with the opportunity to carry out this special issue, with special gratitude to Jay Kandampully, the editor-in-chief (EIC), for his unwavering support and invaluable contributions throughout the development process. Furthermore, we would like to express our gratitude to the servitization community at ICBS ^[2] and all the authors who collaborated on this special issue, as their involvement and expertise have been instrumental in its realization.

A key objective of this special issue has been to provide a comprehensive understanding of the scope of the DSI concept as well as its origins and key attributes for its advancement. The articles featured in this special issue have offered diverse insights into these aspects, enabling us to establish crucial characteristics of DSI. Building upon the research encompassed in this special issue, we can identify the following characteristics as the fundamental tenets that underlie the development of this concept. As a result, the following can be determined:

1. DSI is a crucial element in the ever-changing business ecosystem, leveraging digital technologies to create innovative services, improve product operations, enhance user experiences, knowledge and know-how and drive ongoing innovations.

2. DSI is transforming the way digitally-enabled services are designed, delivered, customized and consumed through the use of digital technologies. Its interdisciplinary approach integrates research on technological, organizational and human/societal factors, contributing to its overall success.

3. DSI emphasizes collaboration, explores the influences of technologies, market dynamics and human experiences on innovation and focuses on the impacts of digitalization so as to enable symbiotic service designs.

4. DSI emphasizes the impact of digital technologies on service innovation, particularly in relation to innovation dimensions. It identifies research priorities, specifically examining the disruptive effects of Internet of Things (IoT), artificial intelligence (AI) and digital platforms on these dimensions and emerging technologies.

5. DSI combines technological innovation and digital servitization, highlighting its transformative impact on service development. It recognizes the complexities of achieving DSI maturity and emphasizes the importance of organizational learning, internal alignment and collaboration with external stakeholders.

Furthermore, one of the primary aspire of this special issue is to offer a clear and succinct definition of DSI to researchers and industry professionals. This will help clarify the boundaries and interdisciplinary nature of its scope. While there have been previous attempts to delineate DSI (e.g. Iden et al., 2020), the contributions in this edition offer a more comprehensive integration of its holistic, forward-thinking and global dimensions. In light of this, we propose the following definition:

Central to this definition is the notion that DSI aims to address today’s strategic and competitive needs across sectors and industries while also prioritizing customer needs and market competitiveness (Rapaccini et al., 2023). This involves promoting intra- and inter-firm collaboration, co-innovation, resource integration, business model innovation, talent cultivation and fostering innovation within service provision (Frank et al., 2019; Vendrell-Herrero et al., 2021a, b; Dalenogare et al., 2023). Ultimately, it is crucial to highlight that this definition adopts a holistic and integrative orientation towards DSI, and therefore, its scope may vary depending on the heterogeneities within different industries and the objectives being pursued.

The manuscripts received for this special issue were managed by the guest editors and evaluated in accordance with the JOSM review process. Each of the articles went through three rounds of double-blind peer review. This issue includes seven accepted manuscripts that substantially contribute to provide a comprehensive understanding of the DSI concept. As stated, the received articles have been classified into three general themes, which have been established based on the main objective of each article. Figure 1 presents these three themes along with the main research orientation contained in each of them. Afterward, Table 1 presents the papers included in each theme, accompanied by concise summaries and explanations of their corresponding data and methodologies. This classification allows for the sorting of associated thematic lines that aim to explore the concept of DSI. The general orientation of each of these themes is described below.

The existing literature has highlighted both the potential and challenges associated with the introduction of digitally-enabled services. For example, Vendrell-Herrero et al. (2021a, b) demonstrate that the adoption of sensors is more common in companies that offer product-service combinations compared to those that focus solely on products. This highlights a specific synergy between service provision and digitization. Similarly, Raddats et al. (2022) emphasize the importance of digital technologies, information and knowledge as key components when configuring DSI, alongside products and services. Building on this foundation, this special issue includes three literature reviews aimed at identifying and synthesizing the origins, mechanisms and limitations of DSI in various industrial contexts. This forms the first theme of the special issue.

Hence, this theme scrutinizes the significance of DSI as a pivotal element in the evolving industrial landscape. It emphasizes the role of digital technologies such as IoT, cloud computing, AI, AR/VR, LLM and big data analytics in developing new services and shaping value-creation ecosystems. The main focus is on how DSI can enhance product operations, improve the user experience and drive innovation. However, it also acknowledges the fragmented understanding of DSI, which calls for further research to explore complexities and future directions. Transversely, this theme emphasizes the criticality of adopting an ecosystem perspective and promoting collaboration among interconnected stakeholders to achieve a comprehensive understanding of DSI’s scope – a perspective that envisions the potential of DSI to fundamentally transform business ecosystems by disrupting its organization and processes (Vaillant et al., 2021).

The previous literature in service management has focused on understanding the essential characteristics that a service should possess (Prestes Joly et al., 2019), with the service-dominant-logic (SDL) theory being prominent in this regard (Helkkula et al., 2018). In a similar vein, two articles included in this special issue have aimed to identify the specific characteristics that define DSI. These studies have played a significant role in shaping our definition and contribute to the second theme of this special issue.

This theme examines DSI research within the context of service innovation and digitalization, emphasizing the collaborative nature of DSI and the integration of resources. It explores the influence of technologies, market dynamics and human experiences on innovation, identifying three key impacts of digitalization: generating new outcomes, reducing coordination challenges and enabling symbiotic design. Furthermore, it ventures to characterize DSI on digital service platforms (DSPs), providing insights into the elements and processes that shape the innovation process on DSPs. Ultimately, this theme intends to contribute to a unified understanding of DSI and offers practical guidance for managers in developing and implementing DSI strategies.

A related and prominent future area of research in this direction pertains to how digitally-enabled services intersect with other innovations, both technological (Vendrell-Herrero et al., 2023) and environmental (Opazo-Basáez et al., 2024), among other dimensions. This is of significant importance as it delineates the sufficient and necessary conditions for better leveraging DSI within an organization.

Another topic of interest involves understanding how learning can occur through service provision, something that has been tangentially analyzed within the framework of nondigital services (e.g. Valtakoski, 2017) yet has not been addressed for digitally-enabled services. Similarly, it is important to comprehend how the service aligns with other offerings of the company (Visnjic et al., 2022), existing bundles (Aquilante and Vendrell-Herrero, 2021) or market demand (Bustinza et al., 2013), topics not specifically examined in the digital context. Two papers in the special issue explore these crucial aspects, shaping a third thematic area.

This theme advances DSI research by examining the impact of digital technologies on B2B industries. It addresses the neglect of digital services in service innovation literature and focuses on nonmanufacturing B2B contexts. By highlighting the disruptive influence of key digital technologies (IoT, IA and digital platforms), the theme outlines how they shape service innovation dimensions. Additionally, it explores the DSI transformation process, emphasizing the importance of organizational learning and alignment. On the whole, this theme provides insights into pathways for companies to evolve towards DSI maturity and contributes to a better understanding of the implications for B2B managers.

DSI is an emerging concept with significant growth potential, primarily due to the convergence of multidisciplinary themes in its development. This special issue aims to serve as a starting point for future research on this evolving topic as well as a reference for researchers and practitioners interested in its intricacies. The articles featured in this issue provide a robust theoretical and methodological foundation for understanding the fundamentals of DSI and serve as a catalyst for further progress in this research area. However, to advance this field, collaboration and involvement from well-established service-based research communities such as servitization, service management and service innovation are crucial.

The articles included in this special issue have led to the identification of potential future research questions for the advancement of DSI research (see Table 2). These questions align with the themes discussed in this issue, but given the interdisciplinary nature of DSI, they can also be applied to research projects with broader or convergent approaches. The progress of DSI as a concept relies heavily on the active involvement of researchers in this field. Therefore, we encourage scholars to actively engage with the content of this special issue, utilizing the insights, frameworks and theories presented to address real-world organizational challenges.