Digitalization is a transformative force reshaping the landscape of the modern industry, a source of differentiation for businesses and, therefore, competitiveness in the global market. Digitalization has been studied in conjunction with the servitization process—the shift from selling products to delivering integrated product-service solutions, the Product-Service Systems (PSS). PSS business models have gained significant traction, driven by the need for businesses to enhance customer value, differentiate their offerings, and improve long-term revenue streams. With the advent of digitalization, servitization can leverage Industry 4.0 technologies to optimize operations, ensure seamless service delivery, and therefore, define new business models integrating PSS with digital technologies.
Digitalization facilitates servitization by enabling real-time data collection, automation, and intelligent decision-making. Digital technologies can be applied to enable or enhance PSS business models, especially sustainable PSS, and also improve PSS design (i.e., through better support for industrial decision-makers). Technologies such as the Internet of Things (IoT), cloud computing, cybersecurity, artificial intelligence (AI), big data analytics and digital twins empower businesses to monitor product performance, predict maintenance needs and factors like costs, environmental impacts and risks, optimize resource consumption, and personalize service offerings based on customer behaviour. The shift has led to the emergence of Smart PSS, where digital intelligence is embedded within products and services to create more dynamic, responsive, sustainable and customer-centric solutions.
Recent industry surveys indicate that manufacturing companies have largely adopted Industry 4.0 technologies in their service delivery, mainly Industrial IoT, cloud computing, and cybersecurity solutions (data analytics, AI, and machine learning have a lower level of adoption to enhance service offerings) but still, the digitalization of PSS does not show the expected outcomes in terms of revenue generation and stakeholder involvement. This can be explained by one of the main issues in smart PSS, which is the management of organizational change and adequate guidelines for the transformation to Smart PSS.
Five main research areas can be distinguished within the concept of smart PSS: PSS design, transformation of business model elements, assessment tools for PSS decisions, knowledge management along the life cycle, and sustainable business models.
The Role of Knowledge Management in smart PSS
One key enabler of smart PSS is effectively managing and utilising knowledge. By integrating IoT and digital twin technologies, companies can collect and analyze real-time data from products, gaining insights into usage patterns, resource consumption, performance, and maintenance needs.
Key advantages of knowledge management in smart PSS include:
- Enhanced Decision Support: Digital twins and IoT-based systems provide predictive insights, enabling companies to optimize product design and service delivery.
- Collaboration and Knowledge Sharing: Cloud computing enables real-time knowledge sharing among stakeholders, reducing silos and enhancing service innovation.
- Data-Driven Service Optimization: AI and big data analytics facilitate the extraction of meaningful knowledge from product usage data, helping companies improve service quality, sustainability, and customer satisfaction.
- Customization and Personalization: Companies can use real-time data to tailor their services to specific customer needs, fostering deeper customer relationships.
Despite these advantages, many businesses struggle to effectively integrate AI and machine learning to extract actionable insights. Therefore, knowledge management in both PSS and Smart PSS remains a challenge.
The role of Information Traceability in smart PSS
Information traceability is crucial for ensuring transparency, accountability, and efficiency in PSS. The use of blockchain and digital platforms is transforming how companies track product and service information across the lifecycle.
The benefits of enhanced traceability in PSS include:
- Improved Service Quality: Through predictive analytics, companies can track service histories and anticipate maintenance needs, minimizing downtime and waste.
- Regulatory Compliance: Digital records help businesses comply with industry regulations by providing auditable data trails.
- Supply Chain Transparency: Traceability improves coordination among suppliers, service providers, and customers, fostering trust and efficiency.
- Risk Mitigation: Companies can identify potential risks by analyzing historical service data and implementing proactive solutions.
- New Service Offerings: Enhanced traceability enables companies to develop data-driven services, such as customized maintenance plans and usage-based service models.
However, challenges persist in fully leveraging traceability tools. Many organizations lack the digital infrastructure or expertise to implement comprehensive traceability mechanisms. Additionally, data privacy and security concerns must be addressed to build trust among stakeholders.
Future Perspectives
As PSS continues evolving, businesses must focus on strengthening their digital knowledge management and traceability competencies. The following strategic actions can help:
- Investing in AI and Machine Learning: Developing robust AI-driven analytics will enable companies to extract valuable insights from product data.
- Enhancing Digital Infrastructure: Deploying IoT, blockchain, and cloud-based solutions can improve service traceability and sustainable lifecycle management.
- Fostering Ecosystem Collaboration: Partnering with technology providers and industry peers can facilitate the adoption of best practices in digital servitization.
- Developing Data Governance Strategies: Establishing clear policies on data security and privacy will enhance trust and compliance.
These actions, aligned with the intentions of the PSS-Pass project, can make a difference. The project seeks to enhance the use of product and service data by integrating advanced digital technologies (e.g., AI) and foster transparency and ecosystem collaboration by becoming a single point of contact for stakeholders in the value chain. This objective could be realised through the integration of the Digital Product Service System Passport (DPSSP), whose framework will be developed in the PSS-Pass project. The DPSSP will integrate the PSS concepts into the Digital Product Passport structure, thereby enabling improved collaboration among actors and enhancing the service offering to the customers.
Digitalization is revolutionizing PSS by embedding intelligence into products and services, thereby enhancing efficiency, sustainability, and customer experience. Knowledge management and information traceability are two pivotal aspects of this transformation, enabling data-driven decision-making and transparent service operations, but they remain a challenge.
To overcome the challenges identified, the PSS-Pass project has the capacity to support businesses by developing the DPSSP. This will offer companies an effective solution to the challenges of the future industrial landscape, improving the efficacy of their collaboration and their ability to offer customers greater value by improving their service offerings.
References
Pirola, F., Boucher, X., Wiesner, S., Pezzotta, G., 2020. Digital technologies in product-service systems: a literature review and a research agenda. Comput. Ind. 123, 103301. https://doi.org/10.1016/j.compind.2020.103301
Pezzotta, G., Arioli, V., Adrodegari, F., Rapaccini, M., Saccani, N., Rakić, S., Marjanovic, U., West, S., Stoll, O., Wiesner, S., Bertoni, M., Romero, D., Pirola, F., Sala, R., Gaiardelli, P., 2023. The Digital Servitization of Manufacturing Sector: Evidence from a Worldwide Digital Servitization Survey. https://doi.org/10.1007/978-3-031-43666-6_12
