Strategic performance management for remote services : How does Industrial Internet of Things affect the performance management of remote services

Abstract

The fourth industrial revolution enabled new services that utilize process data. Companies are expanding their service offerings and moving towards new business models. Managing this change requires a deep understanding of how servitization and the industrial Internet of Things (IIoT) affect business strategy and how performance management systems should be adjusted to consider these new ways of operating. IIoT has significantly transformed the product-service systems (PSS) environment, introducing new challenges and opportunities for performance management. This thesis investigates the strategic effect of integrating IIoT within remote services, focusing on performance management systems. Through a comprehensive literature review and a case study of a leading global developer and supplier in the pulp, paper, and energy industries, this research identifies the unique requirements IIoT introduces to performance management and evaluates the effectiveness of current key performance indicators (KPIs). Semi-structured interviews with the case company’s management and other stakeholders shed light on the critical aspects of IIoT-enabled remote service performance management. The practical aspects of service delivery, customer engagement, and organizational challenges are discussed, revealing a complex relationship between technological capabilities and strategic service objectives. The findings highlight the need for a nuanced approach to KPI design, one that goes beyond traditional metrics to consider IIoT-specific, remote service-specific, and broader business model considerations. The thesis advances the academic discourse on digital servitization, offering insights into the application of balanced scorecard approaches in IIoT-enabled environments and emphasizing the importance of standardized, clear KPI definitions that align with strategic objectives. The study underscores the pivotal role of customer feedback and advanced analytics in refining service offerings and enhancing customer satisfaction. It also sheds light on the organizational adaptations required to utilize the full potential of IIoT in service delivery. This research contributes to the academic literature concerning strategic performance management of IIoT-enabled remote services and points out potential future advancements in the field. It provides insights for both academia and industry practitioners navigating the complexities of digital transformation in service-oriented business models.