The Role of ICT Solutions in Servitisation in Korean Firms

Yong Yoon and Youn Sung Kim

Chapter 7 in Key Challenges and Opportunities for Quality, Sustainability and Innovation in the Fourth Industrial Revolution:Quality and Service Management in the Fourth Industrial Revolution — Sustainability and Value Co-creation, 2021, pp 129-142 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This research explores the role of information and communication technology (ICT) solutions in advancing the servitisation process in Korean firms. As a solution, manufacturing firms striving to implement servitisation can include ICT’s strategic linkage and its widespread usage in its manufacturing system. We investigated whether such methods provide differentiated service to clients and affect firms’ sales ratio and profits. Case studies consisted of three firms that have adopted ICT solutions to support the servitisation process. While the three firms have employed ICT solutions in varying degrees, they all have made substantial progress in servitisation according to financial documents. All analysis was done according to standard protocol.Based on previous research on servitisation, we defined the standards and protocols to measure whether ICT plays an appropriate role in advancing servitisation. Data for these case studies are from the Korean Securities Market Annual Reports listed on the KRX (Korea Exchange). We checked the servitisation type and level for each case study and examined various kinds of value creation present in servitisation for firms and clients. We categorised the range of ICT solutions employed by firms into service monitoring, service evaluation, service integration, and front office.We analysed these firms by using separate analysis frames in categories of ICT solution type by the profit model and value offering. Data analysis from 2014 to 2019 demonstrated annual increases in the proportion of service sales to product sales, and we inferred that there is a connection between the increase of service sales ratio and sales growth. Furthermore, we predict that gains, such as cost reduction and sales growth, can be expected if a product sales firm strategically approaches ICT-based servitisation to provide value creation to clients.

Keywords: Quality and Service Management; Total Quality Management; 4th Industrial Revolution; Industry 4.0; Sustainability; Value Co-Creation; Innovation (search for similar items in EconPapers)
JEL-codes: L2 L6 O14 (search for similar items in EconPapers)
Date: 2021
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