Discussion of Enabling Factors for System Development

So far, the precedent discussion has verified whether performance-oriented systems incorporate the characteristics of a strategy and what the results within this work contribute to the existing scientific conversations. In the following, the research seeks to answer the sub-question three of this study in providing initial enabling factors that illustrate the system context. As financial performance data on this emerging phenomenon is scarce, the research attempts to consolidate and align the theoretically developed success factors in the literature with the primary data. Hence, the subsequent section presents a comprehensive list of nine enabling factors for the implementation of performance-oriented systems, which are based on the consolidated insights from the previous chapters.

Depiction 28 provides an overview of the identified enabling factors. The first three propositions describe relevant factors in the industry environment that foster the success of performance-oriented systems. The propositions four to six comprise influencing characteristics with a focus on value creation. The last three propositions incorporate relevant aspects with an emphasis on value protection. Regarding the influencing factors in the firm environment, i.e. the industry state, the data suggest that location and constriction of the bottleneck as well as industry legislation are relevant aspects. First, the existence of an economical bottleneck downstream in the value chain of an industry positively affects the development of a performance oriented system, e.g. changing user preferences in a stable, mature industry with a dominant design. This aspect correlates with the results in finding one, finding two and finding ten as well as the insights of [Ethiraj, 2007], who is specifically examining the 'allocation of inventive effort' in complex systems. Second, the constriction of the industries' bottleneck positively affects the probability of system implementation. The constriction of the bottleneck aggregates the detected lack of elasticity for the user, the perceived complexity of the individual system and the degree of personal involvement. Exemplary, the higher the level of resource deployment for the products, the more numerous and interdependent the individual components and the more contextual the products for the business or the personal lifestyle, the higher the constriction and thus, the higher the probable success of a potential performance-oriented system. This characteristic is aligned with the results of finding one and finding three as well as the findings of [Ethiraj, 2007]. The third proposition concerns the role of existing legislations in the respective industry as enabling factor. This characteristic applies especially for environmental regulations. It

correlates with the results of finding two and finding ten in this work as well as the findings in [Jacobides et al., 2006], who are discussing the 'role of authorities in industry architectures'.

Depiction 28: Enabling Factors of Performance-oriented Systems

Relevant internal factors with a focus on value creation include the concentration on the integrating capabilities, the existence of prior competences and the potential to outsource non-crucial modules. First, the (exclusive) availability of relevant technology and knowledge for integrating the diverse range of complementary resources through a platform positively affects the development of a performance-oriented system. A firm needs to develop or acquire the associated capabilities prior or during the system development phase. The central role of the integrating module has been illustrated in finding three and finding five. In addition, especially [Pisano and Teece, 2007] are emphasizing the role of 'integrating capabilities' in complex systems. Second, existing firm knowledge of the relevant system resources are fostering the creation of performance-oriented systems. The 'usefulness of existing competences' in an incumbent firm during a change of the industry architecture is described by [Henderson and Clark, 1990] and also illustrated in finding four. Third, the elasticity of resource deployment for the implementing firm also affects the success of the system, i.e. the (financial) flexibility of the firm during system operation and evolution. For example,

[Baldwin, 2010] emphasizes the 'outsourcing of non-crucial modules' as an enabling factor of complex systems as well as the results that lead to finding seven of this work.

In terms of value protection, the discrepancy to existent offerings, the degree of user-collaboration, as well as co-specialization and decentralization are influencing the creation of a performance-oriented system. First, the discrepancy between the novel system architecture and the dominant industry architectures positively affects the system development. The more distinct the position of the system on the elasticity scale in comparison to conventional alternatives, the more difficult the imitation for competitors.

The 'difficulties in adapting to architectural innovations' for incumbent firms are described by [Henderson and Clark, 1990] and are also reflected by finding three and finding eight of this work. Second, the degree of user-integration and -collaboration has a positive impact on the development of the respective system. On the one hand, this approach accelerates innovation rate and speed. On the other hand, it includes the full spectrum of user demand to secure the firm's position. This aspect is addressed specifically in finding six as well as in [Christensen, 1997]. Third, the extent of component integration and decentralization enables the system creation. The more components and component suppliers are integrated into the system, the more stable the implementing firm’s position. The potential to 'capture value through complementary assets' is emphasized by [Pisano and Teece, 2007] and initially indicated by finding four within this work. Additionally, this last aspect is supported by recent developments of the examined cases. Exemplary, the Daimler AG has expanded its car-sharing platform lately towards a mobility platform including a taxi-service, private ride-sharing and public transport. Other, like the Deutsche Bahn AG, follow this evolution and combine bike-sharing and car-sharing with their commuter and mainline passenger services into an end-to-end mobility platform [Becker, 2013].

The hitherto briefly described nine enabling factors of performance-oriented systems are synthesized from the empirical findings within this work as well as the insights from existing prior research. The propositions are structured into the three groups according to the generic steps of environmental analysis as well as firm adaption for value creation and value protection, each containing three aspects. To the author's understanding, the propositions well illustrate the context of system development and are capable to serve as a guideline for future quantitative research in the area of performance-oriented systems. In terms of managerial praxis, the enabling factors provide initial managerial guidance for the implementation of prospect performance-oriented systems.