The impact of digitalization and servitization on the financial performance of a firm: An empirical analysis

Abou-foul, Mohamad; Ruiz-Alba, Jos� L.; Soares, Anabela

Abstract

Manufacturing firms have vigorously pursued opportunities for profitability and growth through servitization and digitalization processes. However, the current body of research provides contradictory results on the impact of servitization and digitalization on firm financial performance. This paper seeks to address how manufacturing companies can turn technology into business process transformation. To address this gap this paper develops and tests a framework for assessing the impact of servitization and digitalization on firm financial performance. This study analyses a survey of 185 U.S. and European manufacturing firms showing empirical evidence that digitalization and servitization had a direct positive effect on a firm’s financial performance. This research gives managers some insights to better understand the digital transformation in servitization process. These results also have significant theoretical implications to the servitization literature, since achieving superior bottom-line results is contingent on the integration of the digital and service-specific capabilities that reinvent the nature of an offering.

• Journal Article Type: Article
• Acceptance Date: May 7, 2020
• Online Publication Date: Jun 22, 2020
• Publication Date: 2021
• Deposit Date: Apr 21, 2020
• Publicly Available Date: Jun 23, 2021
• Journal: Production Planning and Control
• Print ISSN: 0953-7287
• Electronic ISSN: 1366-5871
• Publisher: Taylor & Francis
• Peer Reviewed: Peer Reviewed
• Volume: 32
• Issue: 12
• Pages: 975-989
• DOI: https://doi.org/10.1080/09537287.2020.1780508
• Keywords: Servitization; Digitalization; Firm performance; Structural equation modelling 2
• Public URL: https://uwe-repository.worktribe.com/output/5872864