Realizing Digital Servitization in Latin America

Abstract

The increasing significance of digital service models is actively reshaping how B2B companies can create value for their customers. This thesis investigates what strategies are being employed by companies for the adoption of digital servitization in Latin America. It aims to identify the main obstacles to implementation and propose solutions to overcome these challenges. Key areas of focus were organizational readiness, technological infrastructure, cultural dynamics and the way domestic clients can be engaged. As of now, digital servitization, which integrates tangible products with digital services, is well-established in regions like Europe and North America. However, its implementation in Latin America is hindered by various structural, cultural and technical challenges. The research addresses two primary questions: (1) How do organizational and implementational barriers influence the scalability and success of digital servitization initiatives in Latin America? and (2) How can firms navigate technological and cultural challenges to enhance their digital servitization strategies in this region? A qualitative research methodology was employed, involving 12 semi-structured interviews with industry experts and business developers. Sectors included manufacturing, energy, infrastructure and the machinery industry. Participants were chosen based on their expertise in Latin American and European business interactions. The results are indicating a multifaceted environment, that stakeholders need to effectively navigate. Internally, numerous companies encounter resistance to change, outdated organizational structures and insufficient digital readiness. On the external dimension, challenges such as inadequate connectivity, limited IT infrastructure and a lack of trust in digital solutions are presenting significant hindrances to implementation. Also, companies are facing cultural obstacles, such as a strong preference for face-to-face interactions and limited acceptance for service-oriented pricing structures. Nevertheless, several key factors have contributed to success in the region. Establishing trust through personal engagement, customized communication methods and a robust local presence can enable companies to achieve market acceptance. Effective practices include modular service design, predictive maintenance and data-driven solutions that align with client requirements. When customers actively participate in the creation of service offerings, both adoption rates and long-term satisfaction tend to rise. Emerging trends like AIenhanced technologies and collaborative efforts with clients, will drive digital servitization in Latin America. Yet, small and medium-sized enterprises (SMEs) require enhanced institutional support, education in digital literacy and improved access to financing to fully participate in this transformation. To realize the region's full potential, companies must reconsider generic models by tailoring their approaches to local contexts. Therefore, investing in regional human capital and cultivating trust-based collaborations. This research highlights the importance of integrating advanced technology with personal interaction, to provide actionable strategies for thriving in the dynamic B2B environment of Latin America.

Date of Award	2025
Original language	English
Supervisor	Christian Stadlmann (Supervisor)