Creating sustainable customer value through digitality
| Published date | 11 November 2019 |
| Date | 11 November 2019 |
| Pages | 325-340 |
| DOI | https://doi.org/10.1108/WJEMSD-08-2018-0077 |
| Author | Tero Rantala,Juhani Ukko,Minna Saunila,Hanna Puolakoski,Hannu Rantanen |
| Subject Matter | Strategy |
Creating sustainable customer
value through digitality
Tero Rantala, Juhani Ukko and Minna Saunila
LUT School of Engineering Science,
LUT University Lahti Campus, Lahti, Finland
Hanna Puolakoski
Annomen Oy, Helsinki, Finland, and
Hannu Rantanen
LUT School of Engineering Science,
LUT University Lahti Campus, Lahti, Finland
Abstract
Purpose –Because the global economy is increasingly driven by digital businesses, and digitalization affects
the businesses of traditional industrial organizations, the need exists for a theory, and empirical
understanding, that elucidates the actual value-creating elements. By focusing on traditional industrial
organizations that are facing changes and transformation caused by the increase in digitalization,the purpose
of this paper is to increase the understanding of the characteristics of creating sustainable customer value
through digitality.
Design/methodology/approach –To increase the understanding of creating sustainable customer value
through digitality among traditional industrial organizations, quantitative and qualitative methods of data
collection were utilized in the study.
Findings –The results suggest that value creation through service process- and product-related elements
constitutes improved company performance, whereas cost-related elements do not. In addition, when it comes
to the role of digitality in value creation, results show that to generate benefits, digitality must be
implemented in the company’s strategy and in an existing business model.
Originality/value –Despite the increasing amount of literature on value creation in the digitalized world,
theory and empirical understanding that reflect the complexity and dynamism of the delivery of value to
customers through digitality are still lacking. This study contributes to this research gap, by presenting the
characteristics of sustainable customer value that contribute to value creation.
Keywords Sustainability, Customer value, Value creation, Digitalization, Digitality
Paper type Research paper
1. Introduction
Digitality has affected the operations and businesses of traditional industrial organizations,
and brought major changes related to the delivery of products and services, markets,
customers and business itself (Saunila et al., 2017). According to Dufva and Dufva (2019),
digitalization can be seen as a key motivation for the concept of digitality. Negroponte (2015)
defined digitality as a concept or phenomenon referring to living and operating in a digital
and digitized culture. Dufva and Dufva (2019) contended that digitality refers not only to the
philosophical mathematical system but also to the effects digital technologies have on
society. Thus, in this study, digitality is seen as a concept related to digitalization that
affects the operations and businesses of organizations operating in traditional physical
business environments. One way in which traditional industrial organizations can, and
must, react to change caused by increased digitality is to focus on the development of digital
services, as well as on the creation of sustainable customer value (Saunila et al., 2018). This
reaction by industrial companies has resulted in an increase in digital business, which refers
using technology and digitality as an advantage in a company’s internal and external
operations. Powered by the ongoing IT revolution and increase in digitality in the business
environments of traditional industrial organizations, customer value creation can be seen as
World Journal of
Entrepreneurship, Management
and Sustainable Development
Vol. 15 No. 4, 2019
pp. 325-340
© Emerald PublishingLimited
2042-5961
DOI10.1108/WJEMSD-08-2018-0077
Received 14 August 2018
Revised 24 May 2019
Accepted 2 June 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5961.htm
325
Creating
sustainable
customer value
an important process in the dynamic and competitive business environment. Increased
digitality and contemporary digitalized solutions enable different economic actors to
exchange resources, and thus, co-create value, through virtual, rather than physical,
interfaces (Breidbach and Maglio, 2016; Davis et al., 2011; Makarem et al., 2009). Focusing on
service process-, product- and cost-related elements (summarized in Table I) of customer
value in digitalizing business environments enables organizations to achieve better
relationships with their customers, and to improve the service experience.
The importance of customer value creation has increased in recent years due to fiercer
competition (Grönroos, 2011; Grönroos and Voima, 2013). The competition in digitalizing
business environments is even stronger than in traditional industrial business
environments, because the capital required to start something that operates in the digital
environment is less than what is needed in the traditional industrial business environment.
Elements References
Service
process
related
Service
delivery
Process records: accuracy, flexibility in
emergency cases, reliability, on time
Reliability and speed of supply
Ulaga and Chacour (2001), Möller and
Törrönen (2003) and Ulaga (2003)
Service
availability
Availability
Time and place of service delivery
Responsiveness
Customer understanding
Technical support
Service support: services and
information flow, outsourcing activities
Fitzgerald et al. (1994), Ravald and
Grönroos (1996), Lapierre (2000),
Ulaga and Chacour (2001), Möller and
Törrönen (2003), Ulaga (2003) and
Heinonen (2004)
Service
quality
Quality
Flexibility
Reliability
Order handling, storing, warranties
Fitzgerald et al. (1994), Lapierre
(2000), Ulaga (2003) and
Walter et al. (2003)
Product
related
Production
process
Effective production and supply chain
Process records (capacity, speed,
quality, flexibility)
Prototype development, product testing
Möller and Törrönen (2003), Ulaga
(2003) and Mejtoft (2011)
Product
quality
Quality
Performance, reliability
Usability
Consistency of product
Product’s characters
Ravald and Grönroos (1996), Lapierre
(2000), Sweeney and Soutar (2001),
Ulaga and Chacour (2001) and
Ulaga (2003)
Technology Product customization
Technical competence and new
technologies
Product innovation
Radical innovations
Product functionality
Sheth et al. (1991), Lapierre (2000),
Ulaga and Chacour (2001),
Möller and Törrönen (2003) and
Walter et al. (2003)
Cost related Continuous
improvement
Cost reductions by process and
incremental improvements
Alternative solutions
Lapierre (2000) and Möller and
Törrönen (2003)
Relationship Efficiency, effectiveness, and quality
of relationships
Networks
Supplier knowhow
Supplier solidarity with customers
Ravald and Grönroos (1996), Lapierre
(2000), Weill and Vitale (2001), Möller
and Törrönen (2003), Ulaga (2003),
Walter et al. (2003) and Mejtoft (2011)
Price Product costs
Product-/service-related price
Sheth et al. (1991), Lapierre (2000),
Sweeney and Soutar (2001), Weill and
Vitale (2001) and Ulaga (2003)
Table I.
The elements of
customer value
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