Transition to product-service systems: principles and business model

The Product Services Systems philosophy has frequently been put forward as the ultimate form of customer-producer relationship, with mutual benefits in terms of cost, more efficient use of resources, improved performance for the customer, and development of innovative solutions to meeting customer requirements via holistic management of a suite of services for the customer, of which the products form a part. However, it is difficult for enterprises to begin making the shift to PSS without understanding the changes required to their current business models, how these changes may be undertaken in a progressive manner, and the potential benefits that may accrue along the pathway toward PSS. Firstly, this paper establishes a value proposition for PSS, with a set of key principles. These are then examined in terms of the well-established Business Model Canvas. A pathway is then established to assist firms make the shift by taking the necessary steps, and to understand the requirements and potential benefits associated with each step along the way. A case study of an SME is then described to demonstrate these steps in a practical way. (C) 2016 The Authors. Published by Elsevier B.V.