Value creation in manufacturing industry software business

Although considered a traditional industry, manufacturing industry has evolved rapidly in the past decades, similarly to other industries. As software business has revolutionized almost every industry, the manufacturing industry is not an exception. The increased competition and globalization have forced manufacturing companies to increase their productivity and streamline their production processes. This research examines value creation in manufacturing industry software business. The research method is a qualitative case study, and the research data was analyzed using thematic analysis. The research aims to explore how value can be created and captured through software in manufacturing industry. Additionally, the research aims to discuss the focal elements of the business model, regarding value creation and capture, for the case organization. The theoretical framework of the study is based on three concepts: value creation, business models and business model innovation. As the more thorough examination of these concepts shows, they are linked to each other by various ways. Although previous research on value creation and business models has yet succeeded in providing unanimous definitions of the concepts itself as well as the contents of them, some similarities can be found. Additionally, the discussion on business model innovations provides an interesting connection between value creation and business models. The findings of the study suggest that software business companies working with complex systems, such as automation systems, should focus on assessing the needs of the customers. Furthermore, the co-creative nature of value creation seems to provide additional value creation potential, since the customers are engaged in the value creation process from the beginning. The research data suggests that there are multiple activities that have value creation potential. However, five elements of the software value chain proved to be most crucial in the value creation process: marketing, replacement, implementation, education, and support. The technical features of the software were not analyzed in length for this study. To conclude, the study relies heavily on earlier research on the study matter, which, furthermore, consists of a few leading studies. The aim of the research is to provide a guiding framework for the case company to utilize in their goal of improving their software business model. The results of the study show that complex software systems require collaborative value creation that benefits all the actors involved