Iterative uncertainty reduction in multi-actor smart service innovation

Smart service innovation is the process of reconfiguring resources, structures, and value co-creation processes in service systems that result in novel data-driven service offerings. The nature of such offerings requires the involvement of multiple actors, which has been investigated by a few studies only. In particular, little is known about the multiple actors' efforts to manage uncertainty in the process of establishing smart service systems. Empirically grounded in data from 25 interviews with industry experts, we explore how organizations act and interact in smart service innovation processes. For our data analysis, we adopt a microfoundational view to derive a theoretical model that conceptualizes actor engagement as a microfoundation for iterative uncertainty reduction in the actor-to-actor network of the smart service system. Our study contributes to information systems research on service systems engineering and digital transformation by explaining smart service innovation from both a multi-actor and a multi-level perspective, drawing on service-dominant (S-D) logic and microfoundations as well-established theoretical lenses.