Determinants of value creation and customer value in the IPS² operations phase

Abstract

The advent of B2B industrial product-service systems (IPS 2 ) requires a rethinking of business strategy on both the part of the provider and the customer. In particular, IPS 2 depends on a close and collaborative relationship between them over an extended period of time. This relationship necessitates a certain distinctiveness of the B2B operations infrastructure; and it affords the customer a distinctive set of value propositions intended to result in superior performance and business success. We present two sets of characteristics comprising the makeup of the IPS 2 : (1) a set of value-creating activities and resources -value proposition, ownership, involvement in customer business, customer-provider communication and interaction, contracts and guarantees, information and knowledge channels, life cycle management, product life extension management, sustainability and regulation management, and customer value management; and (2) a set of value propositions realizable by the customer -product (the tangible component of IPS 2 ), service (the intangible component of IPS 2 ), process (operational or customer usage or functional process), relationship (association between provider and customer), outcome (objective served through IPS 2 process operation), robustness and evolution of the IPS 2 life cycle (continual creation of value throughout the IPS 2 lifecycle), and costs (expenses incurred through IPS 2 acquisition and implementation).