An Exploration of Smart Product-Service System Design: Guidelines and Insights for Design Management

This thesis reports on the findings of a research project funded by the Dutch Ministry of Education, Culture and Science. The thesis investigates the design of Smart Product-Service Systems (Smart PSSs), defined as the integration of smart, connected products and e-services, presented to consumers as single solutions to satisfy their needs. Smart PSSs are relatively new value propositions that have been well received by consumers. The number of Smart PSSs in the marketplace has risen in the past years, and their presence is forecasted to grow significantly in the years to come. However, their newness in the market implies that companies are still adapting to their design and implementation. Various reports from practice suggest important ambivalences of these solutions with important negative effects on the experiences and value consumers attach to Smart PSSs.
Consequently, the aim of this thesis is to provide designers and design managers with guidelines and insights, which can aid the design and implementation of Smart Product-Service Systems (Smart PSSs) with increased and lasting value for companies and consumers. This information is of relevance for designers because the role that they play in the development of Smart PSSs is likely to increase, just as the presence of these offerings in the market continues to grow. Designers ought to be well prepared for such relatively new design scenarios. It is of great importance that designers understand the particularities of Smart PSSs design, its opportunities and challenges, and the likely contribution of their activities to the development of meaningful value propositions. By doing so designers can contribute to the efficient development of Smart PSSs, and the design of value propositions that are cherished by consumers over time.
To achieve our research aim, two particular perspectives were followed. First, we investigated the aspects influencing the design and definition of Smart PSSs during the development phase. Regarding this perspective, two topics were addressed: the ‘characteristics of Smart PSSs’, and ‘the Smart PSS design process’. These topics were further translated into two specific research questions: What set of design characteristics can designers use while defining Smart PSS value propositions? And, How can designers support the design process of Smart PSSs? The second defined perspective is the effect of design decisions on consumers’ experiences with Smart PSSs. Concerning this perspective, one topic and one research question were addressed. The topic was defined as ‘consumers’ reactions to Smart PSSs’, and the research question stated as follows: How can designers trigger positive consumer responses with Smart PSSs?
The thesis follows a multidisciplinary research approach, building from theories of different fields, such as operations management, design management, service design, and traditional PSS design. Furthermore, the three research questions outlined above were investigated by means of four qualitative and one quantitative studies, reported in the empirical chapters Chapter 3, Chapter 4, and Chapter 5.
Chapter 3 focuses on the first research question: What set of design characteristics can designers use while defining Smart PSS value propositions? The research question was investigated by means of two qualitative studies: Study #1-a and Study #1-b. Seven characteristics of Smart PSSs were identified: 1) consumer empowerment, 2) individualization of services, 3) community feeling, 4) individual/shared experience, 5) product ownership, 6) service involvement, and 7) continuous growth. These characteristics can be shaped in various ways, through various features. Importantly, the characteristics of Smart PSSs can be used when defining Smart PSSs at different levels of abstraction, and for different goals during the design process. For example, to define the specifics of individual elements in the system (e.g., features in the e-service), or during co-creation sessions among stakeholders on strategic aspects that can influence the system and its implementation.
Chapter 4 addressed the second research question: How can designers support the design process of Smart PSSs? Three sub-questions were further defined, which guided our research efforts. All these sub-questions were investigated by means of a qualitative approach reported as Study #2.
The first sub-question was the following: What are the elements of the Smart PSS design process? In this regard, we found the design process of Smart PSSs to have much in common with that of traditional PSSs, but also to display distinct differences. Smart PSS design can be described as involving a large number of stakeholders with varying needs and goals towards value propositions. Smart PSSs are highly context dependent, where context helps to define the value propositions for different users. Smart PSS design provides designers with broadened design options on how to define and implement the Smart PSS value proposition due to its multi-touchpoint nature. Furthermore, Smart PSSs are ever-growing, ever-evolving, and this dynamism is translated into a design process that is ongoing.
The second sub-question was stated as follows: What are the challenges of Smart PSS design? In this regards, we found the elements of Smart PSS design to lead to seven challenges of Smart PSS design: 1) defining the value proposition, 2) maintaining the value proposition over time, 3) creating high-quality interactions, 4) creating coherence in the Smart PSS, 5) stakeholder management, 6) the clear communication of design goals, and 7) the selection of means and tools in the design process. Importantly, these challenges are rooted in one or more elements of Smart PSS design outlined above. However, we found the broadened design options of Smart PSS design, and the ever-growing nature of Smart PSSs, to be particularly distinct of this development context, and to create a complexity in the design process that can be overwhelming for designers.
The third and last sub-question reported in Chapter 4 was the following: What are the designer role/contributions that help tackle design challenges? Our findings point to five roles/contributions that are being used by designers to tackle design challenges while supporting the Smart PSS design process. Namely, designers were described as: 1) guardians of user experiences, 2) foreseers of future scenarios, 3) integrators of stakeholders needs, 4) problem solvers, and 5) visualizers of goals. We found the identified roles/contributions to belong to the set of design skills long discussed by the design community, and to be effective in dealing with the above challenges. Based on these insights, we conclude that the current skills set of designers contributes to dealing with the complexity of the Smart PSS design process. However, designers should be made aware of the distinct elements of Smart PSS design and the design challenges likely to be encountered, so that they can be better prepared and use their skills more effectively.
Chapter 5 reports on the third research question investigated in the research project: How can designers trigger positive consumer responses with Smart PSSs? This question was investigated by means of two distinct studies, namely, Study #3 and Study #4.
The aim of Study #3 was to address the following sub-question: What is the effect of coherence between products and service elements on consumers’ evaluations of Smart PSSs? To this end, an experimental study with consumers was conducted. The effect of coherence was studied by manipulating the symbolic meaning ‘professionalism’ of a product and service elements of a fictional rental car solution. Importantly, potential incoherencies between product and service elements were anticipated to look unreliable in the eyes of consumers and negatively affected their evaluations of the Smart PSS. Our results validate this assumption and indicate that consumers value the coherence in Smart PSSs. By creating coherence between the elements of the Smart PSS, designers can help evoke assurance with consumers, which results in a more positive evaluation of the overall offering.
The aim of Study #4 was to address the following two sub-questions: 1) How do consumers’ experiences with Smart PSSs develop over time, and 2) What factors should designers consider when defining user experiences with Smart PSSs? To answer these sub-questions, a longitudinal, qualitative research approach was followed. Overall, users’ experiences with Smart PSSs were found to be complex and cyclic. The multi-touchpoint nature of Smart PSSs was found to be a pressing element on how users’ experiences develop. The variety of elements in the system can complicate the understanding of the value proposition of each touchpoint, but also of the Smart PSS as a whole. Furthermore, users’ experiences are cyclic because Smart PSSs offer users the unique possibility to renew their value propositions over time, by means of new elements in the system, features, and content. However, every time the system changes, and users implement changes in their value propositions, they enter an orientation cycle that is influential of their continued engagement with the Smart PSS.
Finally, we identified four main factors that affect the transition from orientation to incorporation in users’ experiences with Smart PSSs: 1) quality of information, 2) number of options in the system, 3) coherence of functionality, and 4) product attributes. Several features in the Smart PSSs can influence these factors. For example, accuracy of data, and the format in which information is presented, are different features that can influence the quality of information in the system. Furthermore, identified factors and features have been associated with different steps in the temporality of users’ experiences with Smart PSSs.
Overall, it can be concluded that Smart PSSs are complex solutions, for designers and consumers alike. The design of Smart PSSs poses several important challenges, outlined through the several empirical studies reported in this thesis. Challenges are rooted in several elements of the Smart PSS design process, and of these, there are two that particularly pronounced design complexities: the multi-touchpoint, and the ever-growing, ever-evolving nature of Smart PSSs. For designers, these elements complicate the definition of the value proposition during the design process. For consumers, they complicate the understanding of the Smart PSS and their interaction with it. Importantly, designers can play important roles and make important contributions to the design process, which tackle specific design challenges and aid in the development of meaningful Smart PSSs value propositions to consumers.
In terms of the relevance of our research, Chapter 7 discusses the theoretical contribution and practical implications of our findings. Particularly, research findings are translated into ten design guidelines (practical Do’s and Don’ts) for Smart PSS design. In line with the two perspectives followed in this thesis, these guidelines point to two district areas where designers’ roles/contributions gain relevance: the efficacy of the design process, and the creation of meaningful value propositions. Such information is relevant because it can help designers to gauge the need to adapt their best practices (i.e., tools, skills) to the design of Smart PSSs. Furthermore, the guidelines and insight presented in Chapter 7 can help designers to manage and maximize the experience of users, and trigger positive responses, at specific stages of the user experience.