The Impact of Contract Type on Service Provider Information Requirements

This paper is concerned with the role of information in the servitization of manufacturing which has led to “the innovation of an organisation’s capabilities and processes as equipment manufacturers seek to offer services around their products” (Neely 2009, Baines et al 2009). This evolution has resulted in an information requirement (IR) shift as companies move from discrete provision of equipment and spare parts to long-term service contracts guaranteeing prescribed performance levels. Organisations providing such services depend on a very high level of availability and quality of information throughout the service life-cycle (Menor et al 2002). This work focuses on whether, for a proposed contract based around complex equipment, the Information System is capable of providing information at an acceptable quality and requires the IRs to be examined in a formal manner. We apply a service information framework (Cuthbert et al 2008, McFarlane & Cuthbert 2012) to methodically assess IRs for different contract types to understand the information gap between them. Results from case examples indicate that this gap includes information required for the different contract types and a set of contract-specific IRs. Furthermore, the control, ownership and use of information differs across contract types as the boundary of operation and responsibility changes.

Beyond words: Testing alignment among inter-organizational performance measures

Purpose: This paper seeks to measure in a quantitative way the degree of alignment among a set of performance measures between two organizations. Design/methodology/approach: This paper extends Venkatraman's test of coalignment to assess the alignment of a set of performance measures governing a contractual inter-organizational relationship. The authors applied the test and present coefficients of misalignment across three sets of measures: those used by a service provider involved in the research, those used by customers contracting the services, and those documented in 11 contracts studied. Findings: Results confirmed a high degree of alignment between target and actual operational performance in the contracts. The alignment of customers' financial objectives and contracts' operational metrics was low. Calculations show poor alignment between the objectives of the provider and the contribution received from the contracts. Research limitations/implications: Some limitations of the conclusions include the small sample of contracts used in the calculations. Further research should include not only actual contracts, but also failed ones. Practical implications: It is possible that misaligned goals, represented in misaligned performance measures, lead to tensions in intra-firm relationships. If these tensions are not addressed properly the relationship could be unstable or terminated prematurely. This method of measuring alignment could detect early potential dangers in intra-firm relationships. Originality/value: This paper extends Venkatraman's test of coalignment to assess the alignment of a set of performance measures governing a contractual inter-organizational relationship. Management researchers and business professionals may use this methodology when exploring degrees of alignment of performance measures in intra-functional and inter-firm relationships. © Emerald Group Publishing Limited.

Integrated billing mechanisms in the Internet of Things to support information sharing and enable new business opportunities

The Internet of Things (IOT) concept and enabling technologies such as RFID offer the prospect of linking the real world of physical objects with the virtual world of information technology to improve visibility and traceability information within supply chains and across the entire lifecycles of products, as well as enabling more intuitive interactions and greater automation possibilities. There is a huge potential for savings through process optimization and profit generation within the IOT, but the sharing of financial benefits across companies remains an unsolved issue. Existing approaches towards sharing of costs and benefits have failed to scale so far. The integration of payment solutions into the IOT architecture could solve this problem. We have reviewed different possible levels of integration. Multiple payment solutions have been researched. Finally we have developed a model that meets the requirements of the IOT in relation to openness and scalability. It supports both hardware-centric and software-centric approaches to integration of payment solutions with the IOT. Different requirements concerning payment solutions within the IOT have been defined and considered in the proposed model. Possible solution providers include telcos, e-payment service providers and new players such as banks and standardization bodies. The proposed model of integrating the Internet of Things with payment solutions will lower the barrier to invoicing for the more granular visibility information generated using the IOT. Thus, it has the potential to enable recovery of the necessary investments in IOT infrastructure and accelerate adoption of the IOT, especially for projects that are only viable when multiple benefits throughout the supply chain need to be accumulated in order to achieve a Return on Investment (ROI). In a long-term perspective, it may enable IT-departments to become profit centres instead of cost centres. © 2010 - IOS Press and the authors. All rights reserved.

Product Service Systems and supply network relationships: An exploratory case study

Purpose - In recent years there has been increasing interest in Product Service Systems (PSSs) as a business model for selling integrated product and service offerings. To date, there has been extensive research into the benefits of PSS to manufacturers and their customers, but there has been limited research into the effect of PSS on the upstream supply chain. This paper seeks to address this gap in the research. Design/methodology/approach - The research uses case-based research which is appropriate for exploratory research of this type. In-depth interviews were conducted with key personnel in a focal firm and two members of its supply chain, and the results were analysed to identify emergent themes.b Findings - The research has identified differences in supplier behaviour dependent on their role in PSS delivery and their relationship with the PSS provider. In particular, it suggests that for a successful partnership it is important to align the objectives between PSS provider and suppliers. Originality/value - This research provides a detailed investigation into a PSS supply chain and highlights the complexity of roles and relationships among the organizations within it. It will be of value to other PSS researchers and organizations transitioning to the delivery of PSS. © Emerald Group Publishing Limited.