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Assessing the Readiness of the Emerging Ecosystem (Actor) for the Pay-per-Outcome Business Model

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Collaborative Networks in Digitalization and Society 5.0 (PRO-VE 2022)

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Abstract

This study analyses the readiness of an emerging ecosystem for Pay-per-Outcome (PPO) business model. We adopted a qualitative exploratory research approach to assess the readiness of firms (as an individual firm) and the emerging ecosystem in the Indoor Environment Quality (IEQ) industry. The maturity model was used to assess the readiness of emerging ecosystem and individual companies. The study identifies 11 critical dimensions in readiness from an emerging ecosystem perspective. We follow a 4-step process 1) Individual companies’ current readiness level, 2) Individual companies’ target level, 3) Emerging ecosystem’s current readiness level, and 4) Emerging ecosystem’s target level. This is the first of its kind to the best of our knowledge that studied the emerging ecosystem readiness for the PPO business model.

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Notes

  1. 1.

    The maturity model (See Appendix) was adopted from the research paper Pay-Per-X Business Models for Equipment Manufacturing Companies: A Maturity Model. This paper is under review process. We will provide full citation details before the Pro-ve-2022 conference.

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Authors and Affiliations

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Correspondence to Prasanna Kumar Kukkamalla .

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Appendix

Appendix

Dimension

Subdimension

Maturity level

1. Initial

2. Experimenting

3. Defined

4. Advanced

5. Optimized

Organizational governance

Operational governance

No PPX-specific operational governance

Operational PPX architecture requirements identified with ad hoc implementation and development

Necessary operational PPX architecture requirements are documented and related governance measures are standardized

Operational PPX architecture requirements are defined and compliance is systematically monitored through related key performance indicators

Operational PPX governance is integrated across company with best practices in place

People governance

No PPX-specific roles or responsibilities related to PPX business model(s) defined

Responsibilities related to PPX are identified with ad hoc implementation and development

Necessary roles and responsibilities for PPX business model(s) are documented, defined and systematically governed

PPX-related roles and responsibilities are defined with systematic performance monitoring through defined standards and key performance indicators

Roles and responsibilities related to PPX are optimized and defined with respect to all company activities

Data & information governance

No set rules for PPX data & information governance

PPX data & information governance requirements are identified with ad hoc implementation and development

Necessary data governance requirements are documented and standardized, with data storage infrastructure defined in production

Data & information governance requirements are defined, with compliance systematically monitored and developed through defined key performance indicators

Data & information governance measures are optimized and integrated across company

Strategy

Business strategy

No defined business strategy for PPX business model(s)

Strategy for PPX business model(s) is experimental with ad hoc implementation and development

Strategy for PPX business model(s) is defined and documented

PPX is strategy is defined and continuously developed through defined key performance indicators

PPX business strategy is fully developed and integral part of the corporate strategy

Resource allocation

No plan for allocating resources towards PPX business model(s)

Basic PPX resource requirements are identified with ad hoc assignment

Procedures for allocating resources towards PPX business model(s) are standardized, allowing systematic resource allocation for specific PPX activities

PPX resource requirements are identified and documented across company, allowing systematic resource management and prioritization at an organizational level

PPX resource allocation follows best practices and is optimized across company

Strategic alignment

No strategic alignment between PPX and other strategic objectives

Limited understanding of PPX and its relationship to other strategic objectives with ad hoc alignment practices

Strategic understanding and objectives are shared between relevant business

Strategic objectives are shared across company with compliance and performance monitored through common key performance indicators

Full strategic alignment allowing optimization and development of common strategic goals across company

Risk management

Business risks

No PPX-related business risk management

PPX-related business risks are acknowledged with ad hoc management practices

PPX-related business risk are documented, with systematic and defined risk management practices in place

PPX-related business risk management is systematic and monitored, allowing predictive risk management

PPX-related business risk management is proactive, with continuous improvement and optimization of risk management practices

Operational risks

No PPX-related operational risk management

PPX-related operational risks are acknowledged with ad hoc management practices

PPX-related operational risk are documented, with systematic and defined risk management practices in place

PPX-related operational risk management is systematic and monitored, allowing predictive risk management

PPX-related operational risk management is proactive, with continuous improvement and optimization of risk management practices

Cybersecurity risks

No PPX-related cybersecurity risk management

PPX-related cybersecurity risks are acknowledged, with ad hoc management practices

PPX-related cybersecurity risk are documented, with systematic and defined risk management practices in place

PPX-related cybersecurity risk management is systematic and monitored, allowing predictive risk management

PPX-related cybersecurity risk management is proactive, with continuous improvement and optimization of risk management practices

Competences & culture

Competences

No identified any PPX-related competences

PPX-related competences are acknowledged with ad hoc acquisition

Basic PPX-related competence requirements are defined and documented, allowing systematic competence acquisition

PPX-related competences are acquired as well as developed systematically

All PPX-related competences can be acquired and managed proactively

Culture

Culture is product-oriented, with no cooperation between different business units

Organizational culture supports experimentation with limited & ad hoc cooperation between some business units

Organizational culture supports innovation and is open towards PPX, with frequent collaboration between some business units

Organizational culture is committed to PPX business model(s) with common incentives, with frequent collaboration across all related business units

Organizational culture fully supports PPX, with complete trust and open communication at all organizational levels and relevant business units

Product lifecycle processes

Beginning of life processes

No identified beginning of life processes for PPX business model(s)

PPX-related beginning of life processes are identified with ad hoc implementation

PPX-related beginning of life processes are defined and systematically implemented for specific project(s)

PPX-related beginning of life processes are defined and implemented across company with systematic management through defined metrics

PPX-related beginning of life processes are optimized and continuously improved across company

Middle of life processes

No identified middle of life processes for PPX business model(s)

PPX-related middle of life processes are identified with ad hoc implementation

PPX-related middle of life processes are defined and systematically implemented for specific project(s)

PPX-related middle of life processes are defined and implemented across company with systematic management through defined metrics

PPX-related middle of life processes are optimized and continuously improved across company

End of life processes

No identified end of life processes for PPX business model(s)

PPX-related end of life processes are identified with ad hoc implementation

PPX-related end of life processes are defined and systematically implemented for specific project(s)

PPX-related end of life processes are defined and implemented across company, with systematic management through defined metrics

PPX-related end of life processes are optimized and continuously improved across company

Product & production technology

Smart product & factory

No machine data collection capabilities for PPX business model(s)

PPX data collection capabilities are tested in machine(s), allowing contract-specific, ad hoc data collection from customer(s)

PPX data collection technologies are standardized, with systematic data collection from customer machine

PPX data collection capabilities is integrated in all machines, with performance monitored through defined key performance indicators

Production technology fully supports data-based products for PPX, with performance optimized through cost minimization and efficiency

Connectivity

No connectivity between machines or production processes for PPX business model(s)

PPX product- and production-related connectivity technologies are experimental and non-standardized

PPX product- and production-related connectivity technologies are standardized and we have access to customer(s)’ machine

PPX product- and production-related connectivity technologies are standardized and monitored through defined quality control measurements for development needs

PPX product- and production-related connectivity technologies are optimized and continuously improved, allowing 2-way/remote connection and control of machines

Data analytics

Data access

No access to PPX data

PPX data is identified, but siloed and accessed manually & ad hoc

PPX data is defined, enabling continous data flow and basic automation with online access

PPX data is systematically accessed, with related key performance indicators defined and utilized in quality control

All PPX data can be accessed, with cost-efficient, high-performing and optimized best practices in place

Data analysis

No PPX data analysis

PPX data analysis is unstructured, allowing descriptive analysis and basic monitoring

PPX data analysis capabilities are defined, enabling diagnostic analysis & recommendations and manual machine tuning

PPX data analysis is systematic and predictive, with performance monitored through defined key performance indicators

PPX data analysis is prescriptive/self-learning, with automation and self-adjusting capabilities

Data utilization

PPX data not utilized in decision-making

PPX data utilized for awareness purposes in basic reporting with ad hoc utilization in decision-making

PPX data established as an asset and utilized to support decision-making

PPX data utilzied broadly in the development of overall company strategy, with performance monitored through defined key performance indicators

PPX data is considered as central to company strategy and operations development

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Kukkamalla, P.K., Uski, VM., Kuismanen, O., Kärkkäinen, H., Menon, K. (2022). Assessing the Readiness of the Emerging Ecosystem (Actor) for the Pay-per-Outcome Business Model. In: Camarinha-Matos, L.M., Ortiz, A., Boucher, X., Osório, A.L. (eds) Collaborative Networks in Digitalization and Society 5.0. PRO-VE 2022. IFIP Advances in Information and Communication Technology, vol 662. Springer, Cham. https://doi.org/10.1007/978-3-031-14844-6_52

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  • DOI: https://doi.org/10.1007/978-3-031-14844-6_52

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