Pathways to Service System Smartness for Firms

As smart technology develops at an ever-increasing pace, firms are investing heavily in boosting the smartness of their service systems. To support these endeavors, practitioners and researchers call for guidance on how to account for customers’ complex needs and wants when making smartness decisions. This research adopts the firm’s perspective on investigating how and why decisions on smartness are undertaken. It examines how firms configure the smartness of service systems and communicate the intended value to customers through value propositions. Critically, it further unravels why firms make these decisions on the basis of their reasoning about aligning resources to create value for customers—that is, the firm’s value creation logic. Our analysis of multiple case studies across several industry sectors reveals a number of pathways to service system smartness. These are labeled cautious, tailored, premium, and balanced pathways, and each entails specific combinations of smartness configurations and customer value propositions, underpinned by particular logics. A more nuanced analysis shows that firms may pursue multiple pathways simultaneously when targeting different customer segments and indicates how firms’ characteristics may shape their pathways to smartness. The resulting framework can operate as a guiding tool for managers and consultants when making important smartness decisions.