When reviewing the existent literature, it becomes apparent that several scholars have already acknowledged the phenomenon of performance-oriented systems and identified different characteristics with regards to their field of expertise. The concept of product-service-systems and its related notions clearly focus on the operational level.
Additionally the concepts fall short of a clear and common understanding what phenomena the terms should embrace and which to exclude. Subsequently, the concept remains rather shallow in analyzing the different components and their role in the value proposition. The research in this field puts an emphasis on the ecological benefits of the systemic approach. Nevertheless, it provides initial evidence that the detected phenomenon is a well-defined sub-system within the respective industry with full life-cycle responsibility of the operating firm for the included components. These components may be physical and/ or non-physical, with a central service component.
The last aspect specifies the need for a reconfiguration of the firm`s business model.
The computational sciences precisely recognized the detected phenomenon in terms of cloud computing and software-as-a-service while not providing universal evidence for
all cases included in this research. They classify the offering as a sub-system as well that is located between a product-bundle at the lower end and an industry wide system or standard at the upper end. Additionally they emphasize the role of a platform for interconnecting the single components and providing a central service. The business model is altered towards a flexible on-demand and product-unspecific offering.
Regarding research on the strategic relevance of performance-oriented systems, the service-dominant logic is of limited use for strategic innovation management due to its restriction to the market diffusion phase. The notion of 'shareconomy', reflecting on the mixed characteristics of sharing and economy, primarily provides an initial, generic classification of the phenomenon. Last, the assessment of ecological benefits implied in a systemic approach remains on a conceptual level. Although all examined notions are linked to a dedicated strand of literature and area of expertise, none of the existing concepts describes the detected phenomenon thoroughly from a strategic perspective.
Against the backdrop of the omissions and weaknesses in the existing conceptions, the present study derives the notion of performance-oriented systems and combines it with central aspects of existent prior research in an innovative approach.
To summarize the different research strings above, the working definition of performance-oriented systems within this study concludes that:
"A performance-oriented system is a well-defined sub-system in the respective industry combining different resources, e.g. physical and non-physical components, for shared use. The single resources are organized through an integrating module, often referred to as platform. This module provides the performance of the integrated components on flexible, usage-based conditions and does not request partial ownership of any resources by the user. Hence, a performance-oriented system features maximum elasticity of resource deployment for the user. The integration of the use phase within the system boundary results in an increased resource efficiency in comparison to existing alternatives."
Depiction 8: Elasticity of Resource Deployment in System Offerings
Resembling bundles of components, e.g. renting, leasing or pooling services are not included under the notion performance-oriented system due to different characteristics that result in a reduced elasticity, i.e. inflexible contractual conditions, or the partial ownership of system-components by the user. Thus, elasticity describes in this study the user’s flexibility in his resource use. Depiction 8 exemplary compares the four generic models product sale, leasing, renting and sharing according to their elasticity. In a product sale, the user is forced to plan his demand for the entire physical product lifespan and deploy necessary resources, e.g. financial, time and know-how resources, before usage. The ownership of the product and the related status is a relevant aspect for the user in this case. In comparison, product leasing already decreases the planning horizon significantly, e.g. half the product lifespan, and allows for a monthly resource deployment after an initial fixed payment. Product renting continuous this trend and allows a pure variable resource deployment on an even shorter basis. The highest elasticity is provided by product sharing, where the user may decide in some of the observed cases every minute whether he wants to deploy further resources. In this case the usage and the related performance play the central role in the user’s considerations.
To summarize this aspect, as no consistent definitions across industry sectors for the differing notions/ models are existent and intersections are blurred,
performance-oriented systems always 'bang the right corner' in terms of elasticity of resource deployment relative to existent offerings. They are optimized towards performance, i.e.
in this study 'work done over time', and its related costs. Likewise, it is neither an industrial standard nor platform that provides the core for complementing firm`s offerings because of the system governance by a single firm and its limited adoption within the industry.
Ecological characteristics are only indirectly included in the definition of performance-oriented systems under the notion of resource efficiency. The resource efficiency, that forms the basis for being an ecological benign offering, may well be motivated solely by economies of scale and scope during system composition and operation phase [cp.
Henderson and Gälweiler, 1984; Hirschmann, 1964]. The rationale behind this conservative decision in the working definition is to potentially reduce inaccuracy. First, the previous chapters well illustrated the underlying challenges in precise assessment.
An explicit inclusion of the environmental aspect in the working definition would require a thorough resource comparison of the observed cases as well as prospective alternatives, which is beyond the scope of this work. Second, the existing body of literature has not reached a consensus whether a managerial motivation for environmental benefits is existent. The findings within this study (cp. Chapter 5) will certainly add clarity to the latter aspect.