Latency and Criticality of Uncertainties in the Development of Product-Service Systems

Servitization requires manufacturers to develop new business models - compound offerings between products and services often referred to as Product-Service Systems (PSS). The development of PSS goes beyond the traditional product-development practices, requiring new processes and capabilities due to the high levels of uncertainty caused by the novelty and complexity of developing the product and the service in parallel. Uncertainty is further increased through mostly long life cycles of PSS and organisational complexity caused by a high degree of stakeholder involvement (Wolfenstetter et al., 2015). The lack of managing these uncertainties often leads to large-scale losses for the provider, also known as the “servitization paradox”. Uncertainty has been characterised by a framework in product development literature in terms of its latency and criticality (O’Connor and Rice, 2013). Latency describes whether the uncertainty may be recognizable in time and distinguishes unanticipated and anticipated uncertainties. Criticality defines the influence on the project’s immediate progress and distinguishes routine (and thus foreseeable) and extraordinary (and thus unforeseeable) events. This
research aims to apply this framework which stems from the product-development literature to PSS development to explore the phenomenon of uncertainty in this context.