Data Analytics Capability Roadmap for PPO Business Models in Equipment Manufacturing Companies

Abstract

The objective of this paper is to extend the knowledge of data analytics capabilities and the development process required to implement pay-per-output/-outcome (PPO) business models. To achieve this objective,<br/>we conducted qualitative research to study two equipment manufacturing companies in their business model transformation, with a special interest in their data analytics capability development path. The findings were threefold; first we validated the data analytics capabilities necessary for PPO business<br/>models synthesised from literature with the selected case companies. Second, two additional data analytics capabilities, namely capability to influence how performance is measured and analysed, and capability to simulate the solution’s financial performance) were identified. Finally, this study presents two different<br/>roadmaps on how data analytics capabilities have been developed. The study findings suggest that remote monitoring capability is among the most critical data analytics capability to initiate a PPO business model in the equipment manufacturing industry. This study contributes to business model literature, and<br/>information systems literature.