In this article, the authors address the strategic role of information in smart industrial services.
The fundamental characteristics of information, as well as lowering costs of gathering and processing it, have had a dramatic impact on companies’ business models. For instance, manufacturing industries have become extremely information-intensive and companies have adapted digital service offerings (referred as “smart services” in many discussions) to benefit from information.
The data is the new oil. Or is it…?
Information is seen as one of the most important strategic assets the digital service providers posses. It is said that “data is the new oil” fulfilling the empty space of matured markets. Some companies have even reported to place information to their balance sheets.
Given this, there is still too little elaboration on how and why information provides strategic benefits. This assumption that information simply yields benefits seem to be taken for granted in a unanimous agreement.
Considering the breadth of different approaches to the sources of competitive advantage, as well as the diversity of digital service business models, we argue that the strategic role of information remains unclear and needs to be further elaborated. In one of our previous articles, we already touched upon this theme, and now we broaden our argument.
Toward holistical view of information as a strategic asset
In our research we have identified the distinct and even surprising ways information can provide strategic benefits in different business contexts and smart service business models. Our findings are based on empirical evidence gathered during the last five years from leading European industrial service providers. We back the empirical material with a systematic literature review on the role of customer or installed-base information on successful service business models.
Based on the emerging results, we introduce four schools of information leverage. These are
1) information as a source of power
2) information as a currency in value-based exchange
3) information as an attractor in communities, and
4) information as a commodity or resource.
Among these schools, the information should be treated distinctively different, as the strategies are based on completely different assumptions.
Furthermore, according to the results, it appears that the characteristic fluidity of information has set a new baseline level for the transparency in the service operations. As smart services are innovated and delivered in company networks, the opportunistic behavior becomes visible, inhibiting the crucial inter-firm relationships. In turn, mutually beneficial intentions between collaborating companies function as attractors and lead to synergetic results.
Steering the research further
This article provides some sneak peeks to the preliminary results of our emerging research. Our aim is during the upcoming months to summarize discussion even further and present conclusive frameworks that challenge the somewhat overly-simplifying information-related talks that prevail at the moment. Information seems to be a resource that requires own methods of assesment. It might not be just “oil”.