Managing Uncertainty in Industrial Full Service Contracts: Digital Support for Design and Delivery

In industrial maintenance, the backbone of the industrial service business, full-service contracts form new and increasingly popular value propositions. For operators of industrial equipment these contracts offer peace of mind at a fixed price, as service providers bear the cost for any action required to maintain or repair their clients' equipment after (unexpected) failures. In order to ensure profitable offers, providers require methods to both assess uncertainties in the contract design phase and to reduce their adverse business impact during service delivery. So far, research has primarily focused on the identification of uncertainties for various types of contracts. There has been a lack of focus, though, on how digital technologies can support a risk-based design of service contracts - either by reducing uncertainties (e.g. by employing technologies for data collection) or by mitigating their business impact (e.g. by reacting more effectively to unexpected events during service delivery). We address this research gap by elaborating on the interdependencies between uncertainties, their adverse business impact and measures to mitigate this impact. We portray the current state of the art in uncertainty management based on a literature review and complement these results with findings from exploratory interviews with experts of full-service providers in the industrial sector. Building upon the results, we discuss how digital technologies can improve uncertainty management in full-service maintenance contracts and, more generally, in service contracts overall.