Keeping up with business model developments in the age of PSD

Developing a business model can be complicated when a product is supplemented with services and digital offerings. A modular approach makes things easier, and a new practical guide written by Julian Hsuan from the Copenhagen Business School explains exactly how.

Many manufacturing businesses in Denmark were already focused on expanding their digital offerings before the coronavirus pandemic. During the pandemic, this development has only accelerated. One of the major challenges for businesses heading into an age where products, services, and digital offerings (PSD) go hand in hand is to adapt their business model and its development in order to ensure that the business is competitive. It can be difficult to figure out how to define a PSD strategy and choose a direction to move in. The new practical guide from researcher Julian Hsuan, Copenhagen Business school, entitled “Product + Service + Digital Systems Integration: Configuring Offerings for Business Model Innovation”, offers help with this.

More manageable with a modular approach

The challenge lies in the fact that the combination of products, services, and digital offerings makes developing business models and solutions brought to market even more complex. To make it more manageable, the guide introduces a modular approach where each area (products, services, digital offerings) is characterised and evaluated separately. The guide illustrates how to do this and what to look for in the process, and it provides clear, recognisable examples for each area. The modular approach offers a conceptual framework that can be used when considering the individual elements of a PSD solution.

With different characteristics for each area, the guide presents eight unique configurations in the field of PSD, each with varying degrees of either innovation or standardisation. The eight configurations provide a framework for understanding and managing the evolution of business models in a company, and they can serve both as goals in their own right and as stepping stones in the strategic journey towards the configuration you wish to achieve in the short, medium or long term.

Plan and reserve resources

The modular approach and the clarity it provides make working with business models in the field of PSD significantly more manageable. This clarity makes it possible to plan out the strategic journey of a company involved in PSD. It also makes it clearer what skills and resources the different configurations require in the company, and it provides an opportunity to consider whether the company already has them (and if not, how and whether to acquire them). Last but not least, the guide presents a series of key questions that are useful to ask as your company begins to develop PSD business models. These questions are valuable to return to and keep in mind as you progress in development.

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