The negative synergistic effects and consequences of digital Servitization barriers

Developing a digital servitization business model presents inherent complexities for small and medium-sized enterprises (SMEs), owing to the intricacies of digital technologies, multifaceted product-service offerings, and the unique characteristics of SMEs. Consequently, SMEs often encounter substantial barriers to digital servitization. These digital servitization barriers, however, do not exist in isolation; rather, they interact in reinforcing ways that existing research has yet to fully capture. This is of concern because overlooking their interplay limits our understanding of the full scope of challenges SMEs face in pursuing digital servitization. To advance research on digital servitization barriers, our multiple-case study of eight SMEs in the Netherlands explores how the interplay between digital servitization barriers affects digital servitization. Our findings reveal that the interplay among digital servitization barriers in SMEs gives rise to decision paralysis, work overload, priority displacement, and lock-in effects. Together, these negative synergistic effects significantly slow down digital servitization efforts, leading to stagnation and path dependency. This study extends the literature on digital servitization barriers by highlighting their negative synergistic effects and consequences, thereby offering new insights into their impact on digital servitization.