Towards Service Innovation Readiness in Outcome-Based Business Models

Outcome-Based Business Models (OBBMs) shift the focus from selling the products to selling the performance outcomes of the products by using advanced digital technologies for decision-making and shifting the logic from “creating value for” to “creating value with” the customer. As a result, they become dependent on complex socio-technical value co-creation systems required for service innovation. Service innovation in OBBMs requires continuous collaboration between the parties, which is neither simple nor always successful. However, to our knowledge, no model or framework exists to assess readiness for service innovation in OBBMs. Hence, we used the Organizational Readiness for Digital Innovation model to address the gap by reviewing it in the context of service innovation in OBBMs. It revealed that a co-innovation approach and consideration of the customers’ resources, capabilities, and readiness are required to develop the model further in this context. This creates a firm foundation for further customization and contextualization of the model by contributing to the conceptual knowledge of organizational readiness for digital innovation and providing insights for collaborative service innovations in OBBMs.