Cutting cost in service systems: are you running with scissors?

Nils Thenent; Ettore Settanni; Glenn Parry; Y M Goh; Linda Newnes

doi:10.1002/jsc.1981

Cutting cost in service systems: are you running with scissors?

Nils Thenent, Ettore Settanni, Glenn Parry, Y M Goh, Linda Newnes

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Abstract

The ability to take action, in particular related to cost reductions in service systems, is strongly infl uenced by the understanding of decision-support tools such as cost estimates. A managerial perspective on cost estimation that neglects the essential characteristics of service systems may drive a locally optimal behavior, but creates tension or failure at the level of the overall system. Cost-cutting decisions that are based on a flawed understanding of the situation can lead to counterproductive outcomes. This paper presents a rigorous link between the domains of cost estimation, systems theory, and accident investigation reveals fundamental epistemological limitations of commonly employed cost models when dealing with the characteristics of servitization systems.

Original language	English
Pages (from-to)	341-357
Number of pages	16
Journal	Strategic Change
Volume	23
Issue number	5-6
Early online date	19 Aug 2014
DOIs	https://doi.org/10.1002/jsc.1981
Publication status	Published - Aug 2014

Keywords

servitisation
cost

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10.1002/jsc.1981

cuttingcostinservicesys
This is the submitted version of the following article, Thenent, N, Settanni, E, Parry, G, Goh, YM & Newnes, L 2014, 'Cutting cost in service systems: are you running with scissors?' Strategic Change, vol 23, no. 5-6, pp. 341-357., which has been published in final form at http://dx.doi.org/10.1002/jsc.1981. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Submitted manuscript, 1.05 MB

Cite this

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ER -

Cutting cost in service systems: are you running with scissors?

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Costing for Avionic Through-Life Availability (CATA)

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Cutting cost in service systems: are you running with scissors?

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Costing for Avionic Through-Life Availability (CATA)

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