EM Klein ValueProposition IoT Canvas2022 Leitura

Electronic Markets
https://doi.org/10.1007/s12525-022-00548-w
RESEARCH PAPER
Value proposition of IoT‑based products and services: a framework

proposal
Graziela Molling1 · Amarolinda Zanela Klein1
Received: 18 June 2021 / Accepted: 4 April 2022

© The Author(s), under exclusive licence to Institute of Applied Informatics at University of Leipzig 2022
Abstract
The IoT can help firms to innovate and to address new business opportunities. However, many companies face difficulties in
developing products and services based on the IoT with a clear and valid value proposition (the core of any business model).
Considering this, we aimed to answer the following research question: which elements need to be considered to define value
propositions for IoT-based products and services? We used the Design Science Research method, developing a conceptu-
alization that guided the creation and testing of a framework to support the definition of this type of value proposition. The
framework was evaluated by 33 academic experts and practitioners and tested in four real companies. It addresses critical
dimensions and elements to the value proposition considering affordances and constraints related to the IoT architecture to
generate different types of values for different actors and the strategic positioning of IoT-based products and services.
Keywords Internet of things · Value proposition · Affordances · Design science research
JEL Classification M1 M15
Introduction models (De Cremer et al., 2017; Fleisch et al., 2014; Wort-
mann et al., 2020).
The Internet of Things (IoT) can be defined as a conceptual For instance, the IoT afford objects to become “smart”
framework that leverages the availability of heterogeneous and able to capture data around them, analyze the data, make
devices and interconnected solutions, augmenting physical decisions, and take actions. Several technologies have been
objects and providing a shared information base on a global developed to achieve this, allowing the application of the
scale (Atzori et al., 2010, p. 19). The IoT allows objects and IoT in the most diverse types of businesses, such as clothing
people to be connected anytime, anywhere with anything or and accessories (smart wearables), home automation (smart
anyone (McPhee, 2017; Nolin & Olson, 2016; Perera et al., home), cities (smart city), industry (industry 4.0), energy
2014; Ray, 2017; Sundmaeker et al., 2010). It integrates the (smart energy) and healthcare (smart health), among others
physical and the digital dimensions, providing considerable (Beecham Research, 2017; Borgia, 2014). Gartner projected
benefits to individuals, businesses, and society, enabling the that there would be over 100 billion connected objects by
creation of numerous new products, services, and business 2030 (Gartner, 2018a, 2019), confirming the potentially sig-
nificant growth of the IoT in the coming years.
Therefore, the IoT can redefine electronic markets with
profound business opportunities (Manogaran et al., 2021)
Responsible Editor: Shengnan Han because organizations can leverage this technology and
develop innovative products, services, business, and rev-
* Amarolinda Zanela Klein
[email protected] enue models (Wortmann et al., 2020) through the combi-
nation of sensors, ubiquitous connectivity, data, and ana-
Graziela Molling
[email protected] lytics. This digitization of the physical world presented
by IoT creates new values for companies and customers
1
Unisinos University - Business School, Av. Dr. Nilo Peçanha, (McKinsey & Company, 2019). However, it also presents
1600 ‑ Boa Vista, Porto Alegre, RS Zip code: 91330‑002, several challenges that impact its widespread adoption
Brazil
13
Vol.:(0123456789)
G. Molling, A. Zanela Klein
(Hsu & Lin, 2018), such as security, privacy, storage, frameworks that support business modeling and the defini-
and use of data, the lack of usefulness of some intelligent tion of value propositions (Klein et al., 2017).
objects, among others (Mani & Chouk, 2018; Siegel et al., Therefore, this paper aims to answer the following
2017). research question: which elements need to be considered
De Cremer et al. (2017) discuss the “dark side” of the IoT, to define value propositions for IoT-based products and
which includes the fact that vendors do not clarify or omit services? We used the Design Science Research (DSR)
from their customers the actual capabilities of IoT-based method to answer this question. Following the DSR steps,
products or services, such as data collection and usage. In we propose a conceptualization of these elements (grouped
this scenario, many IoT-based products and services provid- in critical dimensions). This conceptualization evolves the
ers have been redesigning their offerings and strategies to discussion about the imbrication between the material and
increase their chances of success, focusing on value delivery human agencies (Majchrzak & Markus, 2013) to generate
(Gartner, 2018b; Techonomy, 2016). Thus, the IoT requires value with the IoT, with a perspective of affordances (Gib-
new value propositions (Mani & Chouk, 2018; Shih et al., son, 1977; Leonardi, 2011; Majchrzak & Markus, 2013).
2016), a critical element of any business model (Dijkman Based on this conceptualization, we created and tested a
et al., 2015). multidimensional framework, called Value 4.0, that allows
Nevertheless, companies face a significant challenge in analyzing the IoT-based product and services consider-
understanding the potentials and limitations of the IoT to ing several elements in the following dimensions. First,
generate appropriate value propositions (Bhardwaj & Kole, Actors, to whom the generated value can be created, who
2016; Porter & Heppelmann, 2014, 2015). For instance, is impacted by it, or can co-create the value (Bocken et al.,
some sites highlight the lack of value of IoT-based products 2013; Den Ouden, 2012). Second, Perspectives, related to
and services, such as The Internet of Useless Things (Rehab- the type of value being generated or delivered, for instance:
studio, 2019), among others (Brookes, 2017; Watson, 2017). economic or financial, functional, psychological, among
Atzori et al. (2017) argued that people need to perceive the others (Den Ouden, 2012; Rintamäki et al., 2007). Third,
IoT as resilient, robust, secure, and easy to understand to Strategy (which, after the data collection, we renamed to
trust its applications. The benefits of IoT applications need Positioning in the final version of the framework), refer-
to outweigh the effort of use, security risks, possible pri- ring to the value proposition positioning, for instance:
vacy invasions, and associated costs. Therefore, there is a best cost versus benefit or customization (Anderson et al.,
need to overcome the challenges and limitations of this new 2006; Treacy & Wiersema, 1993). These three dimensions
technology to generate compelling and innovative value (Actors, Perspectives and Strategy) were associated with a
propositions. fourth one, encompassing the five IoT value creation lay-
In this sense, the potential of the IoT as a critical enabler ers (Fleisch et al., 2014), considering the affordances and
of business models is still underexplored (Leminen et al., constraints (Gibson, 1977; Leonardi, 2011) related to the
2018; Paukstadt & Becker, 2021; Suppatvech et al., 2019), technologies in each one of these layers that can transform
especially regarding its core: the value proposition (Dijkman traditional products into smart, connected devices generat-
et al., 2015). As we detail later in this article, most of the ing new services and values. A set of evaluations of the
previous studies that address the value proposition of IoT- proposed framework indicated that it is easy to use, simple
based products and services are based on generic and popu- and parsimonious.
lar business models frameworks (e.g., Canvas—Osterwalder The research results make a theoretical contribution by
& Pigneur, 2010), frequently disregarding the capabilities conceptualizing the dimensions and elements that need to
and limitations of the IoT and the complexity related to the be considered to generate value propositions for products
several technology layers that form its architecture (Aagaard and services based on complex and multilayered technolo-
et al., 2018; Fleisch et al., 2014; Sethi & Sarangi, 2017). gies such as the IoT and the relations among these elements
In this context, current frameworks and models to support and dimensions. As a contribution to practice, the proposed
the value proposition definition are limited because they are framework can help organizations developing IoT-based
very generic (Bocken et al., 2013), lack empirical applica- products and services better specifying their value proposi-
tion due to their complexity (Den Ouden, 2012), focus only tion, increasing their chances of success.
on the customer (Osterwalder, 2004; Osterwalder et al., The article proceeds as follows: first, we present the lit-
2014; Rintamäki et al., 2007), or focus only on the strat- erature review, in which we approach the capabilities and
egy positioning (Anderson et al., 2006). Besides, in general, challenges of the IoT and their relationship with the value
these frameworks do not incorporate digital technologies proposition. Next, we present the research method, based on
nor consider how they can be used to generate new business the DSR, and how the framework was conceptualized. Then,
value (Aagaard et al., 2018). The IoT is a complex tech- the research results section presents all the different rounds
nology with distinguishing features not captured in current of framework evaluation and the knowledge generated.
13
Value proposition of IoT‑based products and services: a framework proposal
Finally, we show the main research contributions, implica- allow creating new values and revenues models for products/
tions, limitations, and suggestions for future research. services (Fleisch et al., 2014; Wortmann et al., 2020).
This five value-creation layers architecture was also con-
sidered by Bilgeri et al. (2015) to develop their IoT Business
The capabilities and challenges of the IoT Model Builder. These authors emphasize that an IoT solution
adds value by extending the reach, functionality, and scope
The IoT can change our traditional conception of inanimate of services offered with a physical product (Bilgeri et al.,
objects, which needs a human agent to make sense of what 2015). Considering all these five layers can help to foster
is happening in the context in which they are situated or to creativity and identifying opportunities for IoT solutions
take actions to achieve a purpose (Hammoudi et al., 2018; (Bilgeri et al., 2015). Wortmann et al. (2020) also considered
Krotov, 2017; Lin et al., 2017; Turgut & Boloni, 2017; Whit- these layers and indicated direct and indirect revenue pat-
more et al., 2015; Yaqoob et al., 2017). The IoT can be used terns based on different combinations of products/services
to transform traditional objects into smart objects, enabling and the physical/digital dimensions with the IoT use.
them to interact with each other or with people, to see, hear, Despite these possibilities, the IoT is still in an early
“think” and perform tasks, share information, and coordinate stage of adoption, and it is necessary to overcome a set of
decisions across technologies such as devices, sensors, the limitations and challenges for its usage (Burkitt, 2014; Da
Internet, and applications (Al-Fuqaha et al., 2015). Xu et al., 2014), such as lack of consumers' understanding
In the IoT, objects are equipped with identification, locali- and trust in the IoT. The main challenges for IoT adoption
zation, communication, and the capabilities of sensing, actu- include costs, hardware size and weight, power consump-
ating, adapting to rules, connecting to networks, and pro- tion, standardization, interoperability, compatibility, avail-
cessing data (Al-Fuqaha et al., 2015; Lin et al., 2017; Lohan ability, reliability, performance, scalability, size and stor-
& Singh, 2017; Mattern & Floerkemeier, 2010). These capa- age (big data), security and privacy issues (Al-Fuqaha et al.,
bilities enable objects to communicate with each other and 2015; Alioto & Shahghasemi, 2018; Hammoudi et al., 2018;
with other devices and services over the Internet, allowing Mani & Chouk, 2017; Mazhelis & Tyrvainen, 2014; Porter
them to be located, identified, and operated to achieve a & Heppelmann, 2015; Rad & Ahmada, 2017; Yaqoob et al.,
specific purpose (Ruengittinun et al., 2017; van Deursen & 2017).
Mossberger, 2018; Whitmore et al., 2015). Weber (2010) and Atzori et al., (2010, 2017) discussed
Thus, the IoT architecture encompasses several technol- many of these limitations, and they continue to be presented
ogy layers that allow people and things to connect any- in the most recent literature. We claim that both the capabili-
time, anywhere with anyone using any service or network ties and limitations/challenges of complex and multilayered
(McPhee, 2017; Nolin & Olson, 2016; Perera et al., 2014; technologies such as the IoT need to be carefully considered
Ray, 2017; Sundmaeker et al., 2010). The most basic IoT when defining new value propositions for products and ser-
architecture considers three layers; it was introduced in the vices based on it.
early stages of research on this subject (Sethi & Sarangi,
2017). It encompasses the layers of (1) perception, (2) net-
work, and (3) application, which have defined the main idea Value proposition and the IoT
of the IoT. However, considering these three levels is not
sufficient because research often focuses on finer aspects The focus of this paper is to propose a framework to support
of the IoT; therefore, we have many more layered architec- the development of value propositions that encompasses the
tures proposed in the literature (Sethi & Sarangi, 2017). For complexities and idiosyncrasies of creating IoT-based prod-
instance, some authors (such as Aagaard et al., 2018, for ucts and services. Therefore, we need to discuss the con-
example) considered a four-layer IoT architecture encom- cept of value proposition. This concept originally came from
passing: (1) the device, (2) connectivity, (3) cloud, and (4) strategy consultants seeking to address problems related to
the application layer to discuss the relationship between the production-oriented organizations; the value proposition
IoT and new business models. typically was defined by the organization, explaining, in
As will be detailed later, we considered the five value‐ a few key sentences, why customers should purchase the
creation layers of the IoT proposed by Fleisch et al. (2014) firm's products and services (Payne et al., 2017). This defi-
because it helps us to understand the technical complexity nition received later contributions but remained related to a
better and how value is created considering the IoT capa- promise or statement about the products and services that a
bilities and applications, covering the most diverse areas company offers, the benefits and values that will be delivered
and businesses (Miorandi et al., 2012; Zanella et al., 2014). to customers, and how it differs from competitors (Lanning,
This five-layer architecture shows that the integration and 1998; Payne et al., 2017; Sales et al., 2017).
combinations between the physical and the digital layers
13
From the promises or benefits of the product and service integrating economic, social, environmental, and ethical
offered by a price to customers (Lanning & Michaels, 1988), issues (Emerson, 2003; Payne et al., 2017).
the value proposition definition scope has been expanded to However, as will be detailed later, the main general value
consider different tangible, intangible, and objective/sub- proposition frameworks/models do not consider most of the
jective types of values (Rintamäki et al., 2007; Den Ouden, elements cited in the IoT literature that addresses the value
2012). In addition, other stakeholders impacted (positively proposition. This literature indicates that combining tradi-
or not) by the value generated (besides customers) started tional products with IoT capabilities provides new functions
to be considered in the development of a product or service and benefits related to the physical objects and the digital
value proposition (Den Ouden, 2012). This proposition has services associated with them (Fleisch et al., 2014). Nev-
to be developed not only by the supplier (the organization) ertheless, it is also fundamental to consider the IoT limita-
but also counting on the active participation of customers tions and challenges in the development of the value propo-
and other stakeholders in a co-creation fashion (Den Ouden, sition. For instance, privacy and security risks may impact
2012; Payne et al., 2017). More recently, a service-dominant IoT adoption more than the price of the product or service
logic emphasizes value as co-created by multiple actors and (Hsu & Lin, 2018). Convenience, usability, reliability, per-
related not only to specific products and services but rather formance, cost, customization, risk mitigation of IoT-based
to experiences and unique contexts in which services occur products and services must also be considered in the value
(Chandler & Vargo, 2011). proposition (Dijkman et al., 2015; Mani & Chouk, 2018;
In this sense, based on Osterwalder et al. (2014), we Rymaszewska et al., 2017).
define the value proposition as the presentation of products Shin and Park (2017) presented an IoT acceptance model
and services, identifying the value (e.g., cost, benefits, expe- that considers advantages, quality, safety, and interoper-
riences, impacts) they generate and for whom they are gener- ability as key features to create a perceived value to users.
ated, considering several actors such as customers, organiza- Lindley et al. (2017) highlighted simplicity, versatility,
tions, business partners, society, among others (Emerson, and pleasure as characteristics to consider when develop-
2003; Den Ouden, 2012). In the literature, that are several ing devices based on the IoT. Fiore et al. (2017) noted that,
frameworks/models to support the development of value despite the growing IoT market, such as smart home solu-
propositions. The main frameworks are depicted in Table 1. tions, the lack of perceived benefits, the high prices, and
These frameworks/models (Table 1) indicate essential the privacy concern are barriers to adoption. Mishra et al.
value proposition elements besides benefits and price, such (2016) emphasized that it is also necessary to consider the
as performance, risk, effort, and customer roles (Kambil socio-organizational context, cultural, social, and cognitive
et al., 1996). They also indicate different dimensions of forces in the process of adopting IoT-based solutions.
value (functional, economic, emotional, symbolic, and ethi- In sum, the challenge is to develop value propositions
cal values), extending the understanding of value beyond that integrate all these points without losing focus (Ghan-
tangible elements (Emerson, 2003; Rintamäki et al., 2007). bari et al., 2017; Hudson, 2017). However, few studies so
Actors impacted by the value proposition should be con- far have directly explored the relationship between IoT and
sidered in its definition, such as stakeholders, the society, value proposition. Previous research highlighted the need for
or the environment (Bititci et al., 2004; Chandler & Vargo, reviewing the value propositions for IoT-based products and
2011; Den Ouden, 2012; Helkkula et al., 2012). There is services (Kamble et al., 2019), citing some key elements to
also a need for continuous innovation in value propositions be considered in this value proposition (for example, Hudson,
Table 1 Top cited general value Reference # Name Source

proposition frameworks
R1 Value Delivery System Lanning and Michaels (1988)
R2 Disciplines of value Treacy and Wiersema (1993)
R3 Dimensions of value proposition Kambil et al. (1996)
R4 Value proposition approaches Anderson et al. (2006)
R5 Value proposition framework Rintamäki et al. (2007)
R6 Value Proposition Builder (VPB) Barnes et al. (2009)
R7 Value Proposition Canvas (VPC) Osterwalder et al. (2014)
R8 Value Framework Den Ouden, 2012
R9 Value Mapping Tool Bocken et al. (2013)
Literature review
13
2017). However, they do not comment or detail these elements artifact, a framework dedicated to supporting the definition
(Chandrashekhar et al., 2017). of value propositions for IoT-based products and services.
Most of the current literature addresses the value proposi- This research followed the DSR approach by Peffers et al.
tion as part of the business model based on the IoT, consider- (2007), comprising six steps of research: (1) problem identi-
ing frameworks such as the Business Model Canvas (Oster- fication and motivation, (2) definition of the objectives for a
walder & Pigneur, 2010) for its development (Suppatvech solution, (3) design and development, (4) demonstration, (5)
et al., 2019), for example: Leminen et al. (2012), Dijkman evaluation, and (6) communication of results. The first step,
et al. (2015), and Gierej (2017). therefore, was the (1) problem identification and motivation.
Another popular business model framework in which value It started with an exploration of the literature on IoT and
can be defined applied to the context of IoT-based solutions value proposition. As a problem, we identified that it was
is the St. Gallen Business Model (by Gassmann et al., 2013), unclear which elements should be considered to define the
used by Bilgeri et al. (2015), Kralewski (2016), and Aagaard value propositions for IoT-based products and services. Also,
et al. (2018). by exploring the most cited general frameworks and models
Bilgeri et al. (2015) considered the five value-creation lay- that support the value proposition definition (Table 1), we
ers of the IoT proposed by Fleisch et al. (2014) and suggested realized that they do not consider the IoT capabilities and
the use of tools such as impact mapping (Adzic, 2012) to limitations and their implications to the value proposition.
work out the key value drivers. However, their methodology Moving to the next step, (2) definition of the objectives
is broad, aiming to develop the business model as a whole, not for a solution, we envisioned a framework to support the
focusing on the definition of the value proposition. development of value propositions for IoT-based products
Leminen et al. (2018) discussed business models for IoT- and services. This framework has the following objectives:
based solutions considering an ecosystem view, proposing a (a) to support the creation of new value propositions for
framework of analysis based on the type of ecosystem and the IoT-based products or services; (b) to support the revision
nature of services involved. Wortmann et al. (2020) discussed of existing value propositions; (c) to help companies to con-
revenue models based on the IoT and the combination of the sider the IoT capabilities and challenges when developing
physical and digital dimensions to develop products and ser- the value proposition; (d) it must be understandable, intui-
vices, based on Fleisch et al. (2014), but also did not detail the tive, easy to use, simple and, parsimonious (considering only
process of defining the value proposition during the product/ essential elements to the value proposition).
service development. With these objectives, the next step was (3) design
Shoukry et al. (2021) proposed the E3-value business model and development. Based on Webster and Watson's (2002)
for improving the business process in e-business. Their model approach, a systematic review of the academic and gray
assumes the collection of business data using IoT devices (for literature was conducted (in August 2018), searching for
instance: wearable devices collecting data about a patient's (a) “value proposition” and (b) “value proposition” AND
health), which minimizes the complexity and collects different “Internet of Things” OR IoT. The academic literature was
kinds of data used to examine the business process. Various searched in the Web of Science, Scopus, EBSCO, and Sci-
actors, roles, and interface values can be determined from the ence Direct databases. The gray literature was searched
collected IoT data to manage user demands. However, their on Google. After the analysis of results, we selected 449
model focuses on the business process in e-business and does academic studies related to value proposition (out of 1180
not focus on the value proposition definition. initial results), and 39 academic studies (out of 89 initial
In sum, so far, current frameworks do not discuss the results), and 206 publications from the gray literature (out
value proposition process in-depth nor offer support on how of 701 initial results) related to IoT and value proposition.
to develop the value proposition specifically to IoT-based The selection considered the documents explicitly associated
products and services (Ikävalko et al., 2018; Kiel et al., with the research focus (IoT AND value proposition). Also,
2017; Metallo et al., 2018; Wnuk & Murari, 2016). These regarding the academic literature on value proposition in
frameworks and models do not consider the distinguishing general (not focused on the IoT), we considered the articles
features of the IoT and its high level of complexity, which is with the highest citations (at least 100). All the references
the main topic of our research, as detailed next. selected were read in full and went through an open coding
process (Saldaña, 2009) with the help of ATLAS.ti. The pur-
pose of this process was to identify the elements that need
Method to be considered for the development of value propositions
for IoT-based products and services.
The DSR is a method that supports and operationalizes Besides the systematic literature review, we applied the
research when the goal is to develop an artifact to solve a Delphi technique to gather the views of experts on value
practical problem (Aken, 2004). We aimed to develop, as the proposition and the IoT. Delphi is a research technique with
13
multiple rounds of expert opinions, using a series of data products/services (Hevner et al., 2004; Venable et al., 2016);
collection and analysis techniques, with feedback between d) completeness—the framework includes all the elements
each data collection phase (Rowe & Wright, 1999; Skul- necessary to generate a value proposition for IoT-based prod-
moski et al., 2007; Mason & Alamdari, 2007; Giannarou & ucts/services (Hevner et al., 2004; Prat et al., 2015); e) usa-
Zervas, 2014). Each subsequent phase of research is devel- bility—the framework is ease of use and intuitive (Hevner
oped based on the results of the previous one. The process et al., 2004; Prat et al., 2015); f) fit with the organization—
stops when the objective is achieved, for example: via con- the framework is applicable in organizations that develop
sensus, theoretical saturation, or when there is sufficient IoT-based products/services (Prat et al., 2015; Venable et al.,
information. 2016); and; g) parsimony—the framework has the adequate
We conducted two rounds of the Delphi technique. In number of elements (without excess) (Zemke et al., 2019).
the first round, a questionnaire was sent to 52 IoT experts The research participants evaluated these criteria based on
worldwide, asking which elements should be considered to their work experience and knowledge.
generate value propositions for IoT-based products/services. The online questionnaire contained a 5-points Likert scale
These experts had seven years of experience (on average) (Strongly disagree to Strongly agree) evaluating the frame-
with the IoT; most of them (54%) research and work with the work according to these criteria; (b) a 5-points Likert scale
IoT (the remainder only research the subject); 62% of them (Not important to Very important) assessing the importance
have a Ph.D.; 23 were from Latin America, six from North of each one of the elements of the framework and (c) one
America, four from Asia, three from Europe, one from the open question asking for suggestions and improvements.
Middle East and one from Africa. Based on the evaluation by the Delphi experts, we made sev-
The answers gathered in the first Delphi round also went eral improvements in the framework, and after these adjust-
through an open coding process (Saldaña, 2009) of the elements, we submitted the second (improved) version, named
ments that need to be considered to generate a value proposi- “Value 4.0”, to a new demonstration and evaluation round.
tion for IoT-based products/services. We identified 99 ele- First, a group of academic experts (from the university
ments in total (experts plus the literature). We grouped and where the study was conducted) tested the framework during
organized these elements (considering different dimensions) a workshop. The workshop aimed to apply the framework in
according to the theoretical conceptualization that will be fictitious cases. The participants had to (a) create a fictitious
detailed in the Research Results section, generating the first IoT-based product or service, (b) develop the value proposi-
version of the artifact (framework). The subsequent phases tion with the support of existing generic value proposition
of the DSR were (4) demonstration and (5) evaluation. frameworks, and (c) review the value proposition consider-
To evaluate the framework (artifact), we adopted a set of ing the developed framework (Value 4.0). After these activi-
criteria indicated in the DSR literature. According to Hevner ties, the group discussed the experience and answered an
et al. (2004) and Venable et al. (2012), an artifact's evalu- individual questionnaire containing eight five points-Likert
ation must be rigorously demonstrated via well-executed scale questions assessing the framework. The evaluation
evaluation methods considering a set of criteria regarding criteria were the same used in the Delphi evaluation. An
the utility, quality, and efficacy of the artifact to achieving its open question also asked for possible improvements and
intended purpose. It is also necessary to compare the artifact suggestions. Subsequently, the framework was tested and
with other similar designed artifacts and evaluate possible evaluated in real-life applications in four companies, with
side effects or undesirable consequences of the artifact use, the participation of their owners.
identifying weaknesses and areas of improvement (Venable The first company, named Alpha, applied the framework
et al., 2012). This evaluation can be made via artificial or to revise the value proposition of a product that had been
naturalistic methods (Venable et al., 2012). recently launched in the market, a smart camera used in
Following these guidelines, we started the artifact evalu- manufacturing processes. We observed the framework's
ation by presenting the first version of the framework to the application with the company owner, in June 2019, in a work
52 Delphi experts in the second round of this technique. In session lasting around 50 min, via Skype. The second com-
total, 25 of the 52 experts evaluated the framework. The pany, named Beta, is a startup in the smart home industry.
evaluation was performed via an online questionnaire. The The framework was applied to a product in the development
criteria adopted to evaluate the artifact (framework) were: phase, a smart remote control, in June 2019. The application
a) functionality and b) flexibility—the framework can sup- also lasted around 50 min. The third company, Gama, devel-
port the development of value propositions for different ops IoT products/services for agribusinesses. The framework
IoT-based products/services (Hevner et al., 2004; Prat et al., application occurred with the company owner, in Decem-
2015; Venable et al., 2012); c) utility—the framework differs ber 2021, in a session via Microsoft Teams, lasting around
positively from other frameworks with similar purpose and two hours. The fourth company, Delta, was developing an
support the development of a value proposition for IoT-based IoT product/service for industrial effluents waste treatment
13
(not launched yet to the market). We had three sessions with applied. We present the details of the four rounds of evalu-
Delta via Microsoft Teams: the first with one of the company ation of the framework in Table 2.
owners, in which we started the application of the frame- We analyzed the answers to the individual questionnaires
work. The second session occurred with the two company's using descriptive statistic techniques (frequency, mode, aver-
owners. They decided to continue fulfilling the framework age). The answers to the open questions and discussions
offline. In the third section, we finished the application of the (recorded and transcribed) were saved in the ATLAS.ti data-
framework. All three sessions lasted around 3 h. base. We analyzed the content of these answers via open/
In all the four cases, we used the Miro® graphical tool data-driven codification (Saldaña, 2009) to identify the nec-
(https://miro.com/app/dashboard/) to fulfill the questions essary improvements in the artifact, considering qualitative
and elements inside the framework. After this application, aspects of the artifact evaluation.
the participants answered an individual online questionnaire
with the same evaluation criteria of the artifact adopted in
the Delphi and the workshop evaluations, also with one open Conceptualizing the value 4.0 framework
question asking for improvements suggestions.
Finally, four practitioners analytically evaluated the The systematic literature review and the first round of the
framework. The first one is the owner of a small company Delphi technique, both performed as part of Step 3 of the
that provides IoT-based solutions for manufacturing pro- DSR (artifact design and development), allowed us to iden-
cesses. The second is a process engineer in a large car man- tify several elements to be considered in the definition of
ufacturer who has been experimenting with IoT and other value propositions based on the IoT. All these elements (99
technologies to improve production and business processes in total) are presented in Table 3. This table also indicates
in the company. The third and the fourth practitioners are the presence/absence of these elements in the main value
angel investors on start-ups that develop IoT-based products proposition frameworks/models (shown in Table 1).
and services. We presented the framework to all the practi- We grouped the elements identified according to theo-
tioners and conducted a recorded discussion with open ques- retical dimensions. The three first theoretical dimensions
tions considering the same evaluation criteria previously had been previously identified in the main value propo-
sition frameworks/models. The first dimension, Actors,
Table 2 Rounds of evaluation of the artifact

Evaluation Type Mode Date Duration Participants
1st: Analytical IoT's experts (2nd round of Online – web question- April 14, 2019, to May 29 days 25
Delphi) naire 13, 2019 (10 min.
aver-
age per
answer)
2nd: Experimental (arti- Workshop with academic Face-to-face Meeting June 26, 2019 85 min 4
ficial) experts
3rd: Observational (natu- Case 1—Company Alpha Online work session— June 24, 2019 50 min 1
ralistic) Skype
Case 2—Company Beta Face-to-face Meeting June 11, 2019 50 min 1
Case 3 -Company Gama Online work session – December 21st, 2021 100 min 1
Microsoft Teams
Case 4 -Company Delta Microsoft Teams—Micro- November 18th, 2021 81 min 1
soft Teams December 13th, 2021 67 min 2
December 23rd, 2021 33 min 2
4th: Analytical Practitioner 1 Face-to-face Meeting June 5th, 2019 90 min 1
Practitioner 2 Face-to-face Meeting July 10th, 2019 54 min 1
Practitioner 3 Microsoft Teams—Micro- November 26th, 2021 33 min 1
soft Teams
Practitioner 4 Microsoft Teams—Micro- January 11th, 2021 45 min 1
soft Teams
Total Approx. 38 participants
938 min.
or 15,6 h
13
Table 3 Elements to be considered in value propositions based on the IoT

# Element Source Element presented in general value proposition frame-
works/models (**)
Academic Gray Lit- Delphi
literature* erature* (First R1 R2 R3 R4 R5 R6 R7 R8 R9
round)
1 Customer ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
2 Consumer ✓ ✓ ✓ ✓ ✓
3 Users ✓ ✓ ✓ ✓ ✓
4 Other people - - ✓
5 Organization ✓ ✓ ✓ ✓
6 Objects/devices - - ✓
7 Partnership - ✓ ✓ ✓ ✓
8 Stakeholders ✓ ✓ - ✓
9 Environment - ✓ ✓ ✓
10 Society - ✓ ✓ ✓ ✓
11 Energy consumption - ✓ ✓
12 Environmental impact - ✓ -
13 Sustainability ✓ ✓ ✓ ✓ ✓
14 Cost ✓ ✓ ✓ ✓ ✓ ✓
15 Cost reduction ✓ ✓ ✓ ✓
16 Effort (reduction of) - ✓ ✓ ✓ ✓
17 Income/Profits ✓ ✓ ✓ ✓ ✓
18 Price ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
19 Economic Risks (reduction of) ✓ ✓ ✓ ✓ ✓ ✓
20 Time (reduction of) ✓ ✓ ✓
21 Aesthetics/design ✓ ✓ ✓ ✓ ✓
22 Availability ✓ ✓ -
23 Automation and Control - ✓ ✓
24 Benefits - ✓ ✓ ✓ ✓ ✓ ✓ ✓
25 Compatibility ✓ - ✓
26 Competence/ Knowledge/ Ability - ✓ ✓
27 Connectivity ✓ ✓ ✓
28 Consistency - ✓ -
29 Coverage/ Location/ Scope ✓ ✓ ✓
30 Data and information (big data & analytics) ✓ ✓ ✓
31 Durability ✓ ✓ ✓ ✓
32 Ease of use/usability ✓ ✓ ✓
33 Efficacy ✓ - -
34 Efficiency ✓ ✓ ✓ ✓
35 Flexibility - ✓ -
36 Functionalities ✓ ✓ ✓ ✓ ✓ ✓
37 Impact - - ✓
38 Implementation - - ✓
39 Integration - ✓ ✓
40 Integrity - ✓
41 Interoperability - ✓ ✓
42 Maintenance and update ✓ ✓ ✓
43 Actor's needs - ✓ ✓ ✓ ✓ ✓
44 Performance ✓ ✓ ✓ ✓ ✓ ✓
45 Prediction ✓ ✓ -
46 Problems to solve - ✓ ✓ ✓
47 Productivity ✓ - ✓
13
Table 3 (continued)
works/models (**)
round)
48 Quality ✓ ✓ ✓ ✓ ✓
49 Reliability ✓ ✓ ✓
50 Functional Risks (reduction of) ✓ ✓ ✓ ✓
51 Scalability - ✓ ✓
52 Stability - ✓ -
53 Simplicity - ✓ ✓
54 Technology ✓ ✓ ✓
55 Utility ✓ ✓ ✓ ✓ ✓
56 Visibility - ✓ -
57 Brand ✓ - -
58 Confidence - ✓ - ✓
59 Comfort/ Convenience/ Cosiness ✓ ✓ - ✓ ✓
60 Experience ✓ ✓ ✓ ✓ ✓ ✓
61 Privacy - ✓ ✓
62 Satisfaction - ✓ ✓ ✓ ✓
63 Security ✓ ✓ ✓ ✓ ✓
64 Status ✓ - - ✓
65 Welfare - ✓ - ✓ ✓
67 Accessibility ✓ ✓ ✓
66 Culture - ✓ ✓ ✓
68 Ethic - - ✓ ✓
69 Inclusion/Diversity - - ✓
70 Health benefits ✓ - - ✓
71 Regulation ✓ ✓ ✓
72 Hardware size and weight ✓
73 Standardization ✓ ✓
74 Actuating ✓ ✓
75 Identification ✓
76 Communication and cooperation ✓
77 Embedded processing ✓ ✓
78 Environment-Awareness ✓ ✓
79 Goal-orientation ✓
80 Human-awareness ✓ ✓
81 Localization ✓
82 Logging ✓
83 Monitoring ✓
84 Network ✓
85 Programmability ✓
86 Retention/Storage ✓
87 Rule-adaptation ✓
88 Self-Awareness ✓
89 Self-management ✓ ✓
90 Sensing ✓ ✓ ✓
91 Shielding ✓
92 Social-Readiness ✓
93 User interface or interaction ✓
94 Cost vs. benefit - - ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
13
Table 3 (continued)
works/models (**)
round)
95 Customization ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
96 Differentiation from competitors - ✓ - ✓ ✓ ✓ ✓ ✓ ✓ ✓
97 Exclusivity - ✓ -
98 Innovation/ Originality ✓ ✓ ✓ ✓ ✓ ✓
99 Market leader - - ✓ ✓
(*) To see all the references for each one of the elements, please access the supplemental data file
(**) Frameworks/models presented in Table 1
defines to whom value can be created, who is impacted by value-creation layers (Fleisch et al., 2014). We propose that
it, or co-create the value (Bocken et al., 2013; Den Ouden, the imbrication of these layers (encompassing capabilities,
2012). The actors can be: (1) clients, whether in their roles limitations, and challenges of the IoT, as previously dis-
as a buyer, consumer, user, or co-creator of value; (2) the cussed) with the other three dimensions can be justified
organization itself, including its employees; (3) ecosystem based on the concept of affordances.
actors—involving stakeholders, partners, suppliers, govern- In its original definition by Gibson (1977:127), affor-
ment, and others; (4) society; (5) environment; (6) bystand- dances are "what the environment offers to the animal, what
ers. Bystanders are people indirectly impacted (positively or it provides or furnishes, either for good or ill." The theory
negatively) by the IoT-based product or service (Ferneley & of affordances encompasses the consideration of the benefits
Light, 2006, 2008); and (7) other objects. These actors need and the constraints and risks of an object (or technology).
to be considered because an IoT-based product/service, with The affordances of an object or technology are not restricted
embedded IoT capabilities, can collect and use data not only to its material properties (Leonardi, 2011). Instead, the
from its users but also from bystanders, sometimes without affordances emerge from the encounter between the human
their notice. goals and what an object affords for human action. A con-
The second theoretical dimension, Perspectives, is related straint refers to the ways by which a technology limits the
to the type of generated value: environmental or ecological, actor from accomplishing specific goals (Nambisan et al.,
economic or financial, functional, psychological or emo- 2019). Affordances and constraints are distinct from technol-
tional, social or symbolic, regulation, and political (Den ogy features; they indicate what an actor with a particular
Ouden, 2012; Rintamäki et al., 2007). purpose can or cannot do with a technology (Majchrzak &
The third dimension of the framework is Strategy, which Markus, 2013). In sum, perceiving an affordance involves
refers to the value proposition positioning type, such as (1) perceiving the value of an object or technology in a specific
best cost versus benefit; (2) customization; (3) differentia- environment for a specific actor (Nambisan et al., 2019).
tion from competitors; (4) innovation or novelty; (5) market By considering that technologies provide sets of affor-
leader; and (6) uniqueness or exclusivity (Anderson et al., dances and constraints for particular sets of actors (e.g.,
2006; Treacy & Wiersema, 1993). The definition of the strat- innovators, designers, entrepreneurs, clients), we can poten-
egy for the IoT-based product and service should be aligned tially explain how and why the same technology infrastruc-
with the other dimensions of the framework. The Strategy ture may lead to different innovation outcomes (in this case,
dimension is also related to the competitors (Kambil et al., different value propositions) in different use contexts (Nam-
1996). The definition of the Strategy is fundamental to guide bisan, 2017).
the development of an attractive and differentiated value In this sense, defining a value proposition for a product/
proposition (Anderson et al., 2006). service based on the IoT implies reconciling the goals of
The Value 4.0 framework is different from the frame- the designers, innovators and, especially, the goals of the
works presented in Table 1 because it considers the IoT's potential clients and users (human agency) with the things
specificities and complexity (IoT value levels, opportuni- that technology can or cannot do – its material agency (Klein
ties, and challenges), since the three dimensions (Actors, et al., 2020; Leonardi, 2011) to leverage the value of the
Perspectives, and Strategy) identified in the previous value product/service.
proposition frameworks were associated and complemented The combination of different technologies in the IoT
with a fourth dimension, specifically related to the five IoT value layers architecture can change the agency of material
13
objects to the point that an "ordinary" object, such as a light service providers to identify patterns in data, calculate
bulb, can "act" and generate data, which, by its turn, allow indicators of products' use, and generate other relevant
innovators and product designers/developers to create new information about the physical object (e.g., the on‐and‐
value-added services. It was explained by Fleisch et al. off times of the LED bulb in a household are processed,
(2014) in their model of five levels of value creation con- and motion patterns are discovered).
sidering the IoT architecture – Fig. 1. • Layer 5 ‐ Digital service: the integration and combina-
We approach these five levels of value creation next, with tion of technologies in the previous layers afford generat-
the perspective of affordances (Gibson, 1977; Leonardi, ing a digital service. A user-friendly interface via a web
2011; Majchrzak & Markus, 2013): service or app affords easy and timely access to the ser-
vice for clients/users (e.g., a security service with alerts
• Layer 1 – Physical thing: the affordances of a physical allows its users or the police to identify potential risks
object or product forms the first layer of the IoT value‐ and unpredicted events via a mobile app).
creation architecture. The affordances in this level are
available to the actors in the surrounding environment As highlighted by Fleisch et al. (2014), all the five value
(e. g. a LED light bulb affords a person to illuminate a levels based on the IoT architecture are interdependent; they
room). need to be correctly integrated to extend the value of a physi-
• Layer 2 ‐ Sensor/actuator: the physical object is cal object. However, although Fleisch et al. (2014) named
equipped with a minicomputer with sensors and actua- these "value levels," they did not detail what type of value
tors. The sensors afford the object to "perceive" the sur- is generated to what type of actors. It is crucial to consider
rounding environment and generate data about it (e.g., the concept of affordances since an object or technology
the LED light bulb can continuously measure whether generates value when it provides specific possibilities of
people are present in the room). The actuators afford the action to specific users in specific contexts (Majchrzak &
object to act and provide local services (e.g., the object Markus, 2013).
automatically turns the lights on/off due to human pres- In this sense, our proposed conceptualization (Fig. 2)
ence/absence). extends the understanding of the IoT value layers indicating
• Layer 3 ‐ Connectivity: the minicomputer with sensors that the affordances and constraints related to each technol-
and actuators becomes connected to the Internet through ogy layer must be considered concerning specific groups
an embedded radio module, which allows it to transmit of actors, evaluating what type of value can be generated
information about the object globally (e.g., the light bulb to them. It also indicates the need to consider the strategic
can be addressed anywhere/anytime to authorized sub- positioning/orientation of the product/service based on the
scribers). IoT. For example, different technologies in the IoT architec-
• Layer 4 ‐ Analytics: In layer 4, the sensor-generated data ture can change the material agency of an object by allowing
is collected, stored, and processed, for instance, using it to be aware of its context and pervasively collect data. It
a cloud‐based system. The analytics technology affords can generate services for a specific actor (e.g., the user of
Fig. 1 IoT value creation lay-

ers—adapted from Fleisch et al.
Layer 5
Digital service provided
(2014) from previous layers
Digital service Digital/Global
Layer 4
Data collected, stored Digital World
Analytics
and classified
Layer 3
Object connected to
the global internet
Connectivity Value proposition
Layer 2
Object equipped with
Sensor/Actor Physical World
sensors and actuating
elements
Layer 1
Physical Thing Physical/Local
Physical Thing
13
Fig. 2 The conceptualization –

artifact’s (framework) theoreti-
cal foundations
a smart object) that provide value for him in one perspec- only for analytical purposes. For instance, privacy can be
tive (e.g., functional value, delivering relevant data on the both a source of value and a challenge in IoT use. These
smart object's context of use). However, at the same time, in elements are presented graphically in the framework, using
the imbrication of the technology and human agencies, con- icons, keywords, and short questions (similarly to the Canvas
straints emerge related to possible privacy invasions, which framework, by Osterwalder et al., 2014), aiming to facilitate
can destroy value not only for the central client (user) of the their identification and consideration. The proposed frame-
smart product but for another actor (e.g., a bystander). Value work went through a set of evaluations, described next.
destruction occurs when the target user perceives a reduction
in utility or when some stakeholders disagree on whether
the outcome of a project is positive or negative or can even Research results
question the criteria to assess it (Canhoto & Clear, 2020).
Overall, it can affect the strategic positioning of the product/ In this section, we present the results of the different rounds
service, raising questions about its costs versus benefits and of evaluation of the proposed framework, and the knowledge
possibilities for customization. generated through this process.
A conceptualization is a “semantic structure which
encodes the implicit rules constraining the structure of a Evaluating the framework
piece of reality” (Giaretta & Guarino, 1995: 6). Consider-
ing this conceptualization, we created the first version of First evaluation – analytical—second round of delphi
the framework to support the value proposition definition
for IoT-based products/services, shown in Fig. 3. All the 99 The first evaluation occurred in the second round of the Del-
elements previously identified (Table 3) were revised and phi technique, in which 25 participants out of the 52 experts
grouped considering the theoretical dimensions presented who participated in the first round evaluated the first version
in the conceptualization (Fig. 2), eliminating redundancies, of the framework (Fig. 3) via a questionnaire. The results
resulting in 67 elements. It is important to explain that some are shown in Table 4. It indicates that most experts agreed
elements are related to more than one dimension simulta- that the proposed framework can support the development
neously; they were separated in the framework dimensions of value propositions for IoT-based products/services,
13
Fig. 3 Value proposition framework for IoT-based products/services – first version
13
including all the elements needed. Most of them agreed that object and define its value proposition. They could choose
the framework differs positively from other frameworks with one or more general value proposition frameworks/models
a similar purpose, being easy to use, intuitive, and has an previously identified in the literature review (see Table 1) to
adequate number of elements. support them in this task. After defining the smart object (the
The experts were also asked to indicate the degree of participants chose a smart pan) and its value proposition,
importance of each framework element on a scale of 1 to with the support of one or more general frameworks, they
5 (1—Not Important; 5—Very Important). Only 3% of all should rethink the value proposition using the framework
answers marked an element as 1 (Not Important) and 2 Value 4.0 and, finally, evaluate the proposed framework.
(slightly important). At least 56% of the respondents scored In their evaluation, the experts highlighted that the frame-
4 (Important) or 5 (Very important) in all items. Therefore, work helped them to think in new elements that are not con-
we decided not to exclude any element. The framework was sidered in other frameworks, such as the storage, usage, and
improved considering the suggestions given by the experts access to the data collected by the smart product, which
in an open question, with the following modifications: is related to privacy and security issues – some of the IoT
challenges. All participants agreed that the framework Value
• Inclusion of the item “Current Value Proposition”; 4.0 can support the development of value propositions for
• Replacing questions within levels with short words or IoT-based products/services, differing positively from the
phrases; general frameworks presented to them. They also indicated
• Addition of more images (icons to represent each level); that the Value 4.0 is easy to use, has an adequate number of
• Separation of the “functional,” “economic,” “ecologic,” elements, and is intuitive. However, they suggested clarify-
“psychological” and “social” types of value, as they do ing the element "Limitations" in level 5. According to them,
not fit into a specific level of the IoT architecture; it was unclear if it referred to limitations of the physical
• Inclusion of the “Strategy” within the “New Value Propo- product (e.g., the resistance of sensors to high temperatures)
sition” section. or the service. Also, they suggested clarifying the element
• Aesthetic changes (layout of the framework). "Security," informing that it refers to "Information Security."
After making these changes, we generated a second ver- The third round of evaluation – observational/naturalistic –
sion of the framework, named "Value 4.0" (referring to the testing in four companies
industry 4.0 concept). We submitted this second version to
three new evaluation rounds, as explained in Table 2 and The third evaluation involved an observational (naturalis-
detailed next. tic) framework testing in four real companies (Alpha, Beta,
Gama, and Delta). Naturalistic evaluations aim to explore
The second round of evaluation – experimental – workshop the artifact performance to understand the complexities of
with academic experts human practice in real organizations (Venable et al., 2012).
We describe the results of these evaluations in each one of
The second evaluation (experimental) consisted of a work- the companies next.
shop in which participants (four academic experts) should
choose an object they would like to transform into a smart
Table 4 First evaluation of the artifact in its 1st version – second Delphi round
Questions Number of experts that agreed or %
strongly agreed
(N = 25)
The framework is able to support the development of value propositions for IoT-based products/ser- 23 92
vices
This framework differs positively from other frameworks with similar purpose 14 56
I would use this framework to develop a value proposition for IoT-based products/services 20 80
This framework includes all the elements necessary to generate a value proposition for IoT-based 20 80
products/services
This framework is easy to use 20 80
This framework has the adequate number of elements (without excess) 19 76
This framework is intuitive 16 64
This framework is applicable in an organization that develops IoT-based products/services 20 80
13
Case 1: Alpha and its industrial smart camera Company Interviewee 1 pointed out that they had not achieved the
Alpha is a start-up founded in 2012 and identified an product's scalability yet because customization is needed to
opportunity to work with smart cameras and process their implement the product, and it is a differential but also a chal-
images to obtain information that helps improve industrial lenge for scale. In addition, they need to think more about
processes' quality control. Alpha had recently launched his the ecological impacts of their solution, for example, how
new smart camera, which was selected to test the Value to discard electronic waste.
4.0 framework. This camera captures images, processes Regarding the actors for whom the values are generated,
them, returns the information, and triggers actions for other Alpha focused more on its customers. However, Interviewee
devices or machines. For example, on a production line, it 1 said that employees of the companies that use their cam-
can identify strange objects and trigger an alarm or stop the eras are relevant bystanders due to the concern of capturing
conveyor belt. According to Interviewee 1, founder of the employees´ images, which is linked to the “Social” aspect
company, the current value proposition defined is “Smart related to legal and ethical concerns and also with “Psycho-
cameras to generate/extract information from images for pro- logical” values related to privacy.
cess control and improvement.” He pointed out that he did Finally, the Value 4.0 generated a picture of Alpha's value
not think much about the value proposition of this product, proposition, showing current values they deliver, values they
being more “pulled” by the market to develop it. are concerned about, and values they had not considered
When asked about using a framework to develop the yet. Interviewee 1 emphasized as current opportunities to
value proposition, Interviewee 1 mentioned that he had improve their value proposition elements identified in levels
already used the value proposition canvas by Osterwalder 2 and 5, in the “Functional” and "Economic" types of value
et al. (2014). He commented that it supported the company's (highlighted in darker sticky notes in Fig. 4).
start, helping them to think about the value proposition of
other products. However, he considers the value proposi- Case 2—Beta – universal control device for smart home and
tion canvas “overvalued” because it does not help to solve industrial applications Company Beta, founded in 2014,
problems, it helps only to reflect on points that may not have focuses on making homes and industrial establishments
been considered at first. He pointed out that it contains basic intelligent, serving end consumers and companies. It fabri-
elements, and today he does not use it anymore. Regarding a cates smart switches and sockets with a sophisticated design.
value proposition framework specific for IoT-based products Beta emphasizes that its value proposition is focused on ele-
and services, Interviewee 1 says it should be simple and ments such as cost–benefit and convenience. The product
support reflection on “things that have been overlooked.” selected for applying the framework was a universal control
To apply our framework, the article's first author shared device. Commands are sent to this control device through an
the computer screen with Interviewee 1 to apply it. The app, and it operates, for example, air conditioning equipment
researcher created virtual sticky notes that were fixed in each and televisions, performing actions such as turning them on
part of the framework, as Interviewee 1 mentioned the con- and off, changing channels, and the temperature. Until the
tent that should be placed. Each element related to the value date of the framework application, the product had not yet
proposition in the framework was defined (Fig. 4). been released to the market. The first author filled out the
During the application, Interviewee 1 described the prod- framework, creating virtual sticky notes, as Interviewer 2
uct's characteristics in each level of the framework Value 4.0 (owner of the company) created the content that should be
and emphasized that its smart camera differs from others due placed in the framework (Fig. 5).
to its cost, ease of implementation, ease of use, and solu- The value proposition developed until that moment for the
tion for image processing. However, we identified that their product/service was: “remote control equipment through a
initial value proposition did not explicitly contain any of smartphone application.” This initial value proposition sum-
these statements. This is due, as he explained, to their focus marized the functionality of the product and did not contain
on developing the product more than the value proposition its differentials, which the Value 4.0 framework helped to
itself. emphasize. The opportunities identified are: the possibil-
Therefore, after using the Value 4.0 framework, the Alpha ity of integrating the device with any equipment that has a
company owner considered opportunities to improve the remote control, of different brands and models (identified
value proposition such as highlighting the product perfor- in levels 1 and 2 of the IoT value levels); the app, that has
mance (identified at level 2 of the IoT value levels); the cus- different functions compared to similar ones in the market
tomization and the complete solution they provide, hardware (identified in level 5); the accessibility characteristics, espe-
plus software (identified at level 5); the solution easy instal- cially in the app (identified in the “Social” value group); and
lation and maintenance (identified in the “Functional” value the Strategy of the company, positioned as the best cost–
type); and the superior cost–benefit of the camera, compared benefit option in the market (identified in the “Economic”
to the competition (identified in the “Economic” value type). value group).
13
Fig. 4 Framework application: Case Alpha
Interviewer 2 also noted that they collect lots of data, issues (connecting to the “Social” value) since the device
but they are currently using them more as a log for trou- does not collect confidential data. Besides providing a
bleshooting issues rather than to improve services and whole picture of Beta's value proposition, the frame-
monetize them. Interviewer 2 said that are no ethical work also provided a set of reflections on unexplored
13
Fig. 5 Framework application: Case Beta
13
opportunities; they are highlighted in darker sticky notes released to the market yet. Delta was developing and test-
in Fig. 5. ing the product (hardware part) for running a pilot project.
They clearly understood the problem they were attempting
Case 3—Gama – IoT for agribusiness Company Gama is a to solve because one of the company's owners (Interviewer
start-up founded in 2019 and focuses on developing IoT- 4) is an expert engineer working in industrial effluents treat-
based products and services for water resource management ment processes and auditing. The other owner—Interviewer
in agribusinesses. Currently, Gama's unique product/service 5 – is an IT expert. However, they had not formalized the
is a control device, which includes a sensor device and soft- product/service value proposition.
ware, which monitors the irrigation process on rice farms. In this case, we divided the framework's application into
It is a water-saving technology that farmers can apply to two sessions. In the first one, the first author filled out the
reduce their irrigation water consumption in rice fields with- framework, creating virtual sticky notes according to the
out decreasing its yield. inputs provided by Interviewer 5. In the second session, the
This IoT-based product/service has as value proposition: two company owners decided to complete it offline. The
“Generate monitoring, cost, and product efficiency infor- result of the framework application is shown in Fig. 7.
mation to assist farmers’ decision making in the irrigation With the framework application, Delta´s owners found
process.” It has been used in several farms, and the company opportunities in almost all levels and elements of their value
is attempting to scale this solution. The Gama's owner (Inter- proposition ( Fig. 7). Among the main opportunities identi-
viewer 3) said he learned and improved the product and ser- fied, they reflected about the focus they were spending on the
vice since its ideation and already solved many challenges hardware development instead of the software and analytics
inherent to IoT solutions, such as communication issues. As development, which contain their differential: the method-
in the previous cases, the first author filled out the frame- ology used to calculate indicators about effluent waste and
work, creating virtual sticky notes, and Interviewer 3 created treatments´ needs. In this sense, the Delta owners recognized
the content that should be placed on it (Fig. 6). that the Value 4.0 helped them to focus on the services pro-
Interviewer 3 emphasized the differential of its IoT solu- vided as a differentiation from their competitors.
tion from competitors because it works in large areas such In addition, when working by themselves offline, Delta
as rice plantations. He saw an opportunity to communicate owners figured out aspects that, after a review, they would
this differential better in their value proposition (highlighted not consider anymore (highlighted by them in the darkest
in darker sticky notes in Fig. 6). In terms of actors, the value sticky notes in Fig. 7) or they will consider in the medium-
proposition is focused on customers. However, Interviewer 3 term (highlighted by them in darker sticky notes in Fig. 7 -
considered their customers' employees as actors that can be levels 2 and 3). They also used arrows to identify relations
impacted because the IoT solution can replace the manual between different elements in the framework, which was not
work performed by the employees, such as checking the used before or suggested in the previous cases. The partici-
water levels and turning on/off the irrigation. In addition, he pants from Delta, in this sense, made an innovative use of
emphasized the need for partners such as resellers to enable the framework. They also suggested the creation of software
product scalability. However, they did not explore the value to support the framework application, facilitating “crossing
to be delivered to these partners. over” the framework elements in each one of its dimensions.
In summary, Gama´s owner already had a clear concep-
tion of its IoT-based product and service and the values Cases results – summary In the four cases described, the
delivered to customers. He said the framework would be framework supported the value proposition development of
more useful in the early stages of the product and service the companies, helping their owners to identify new oppor-
development (before market release) when the company had tunities and aspects to be emphasized in their current value
less experience with IoT and faced challenges with some proposition, except for company Delta which had not for-
elements overlooked at the beginning of the project. In that malized it yet. These opportunities were found in different
case, probably the framework would be helpful to identify dimensions and levels of the framework.
challenges and issues they already overcame. Interviewer 3 Delta, which was developing its product at the time of
also emphasized that he would use the Value 4.0 to develop the framework application, has found more opportunities to
new IoT-based products/services and help his team better define the value proposition, profiting more from the frame-
understand the solution, not only isolated parts of hardware work application if compared to companies such as Gama,
or software. who had already released its product to the market. Compa-
nies Alpha and Beta, which had developed their value propo-
Case 4—Company Delta – IoT for industrial waste treat‑ sition and were near to market release, figured out some
ment Company Delta is developing an IoT-based product/ opportunities as well.
service for industrial effluent waste treatment, and it was not
13
Fig. 6 Framework application: Case Gama
13
Fig. 7 Framework application: Case Delta
13
Regarding the type of opportunities identified, some After applying the framework, the companies' owners
involve IoT challenges such as performance of the IoT solu- were asked to evaluate it and suggest improvements. They
tion or data use (e.g., Alpha and Beta), and IoT capabilities answered the same individual questionnaire previously
such as communication or adaptation (e.g., Gama and Beta). applied to the academic experts. The Alpha's owner did not
This is a differential of Value 4.0, since no other value prop- make any suggestions for improving the framework. The
osition framework considers the IoT specificities, as pointed Beta's owner highlighted that, as one of the framework's
out by Interviewer 1 regarding the Value Proposition Canvas authors was conducted its application, it was easy to fill and
(Osterwalder et al., 2014). navigate through it, but he thought it would not be so simple
In addition, some opportunities identified are related to to apply it just by viewing the current version of the frame-
values that can be delivered in the future. In terms of existing work. He suggested the inclusion of an introductory page
value propositions, we noticed that the value propositions of with instructions for filling it out. Delta and Gama made
Alpha and Beta focused more on the products and services similar suggestions regarding improving the instructions
presentation and did not identify the values they generate on filling the framework. Overall, all respondents rated the
and for whom they are generated (Osterwalder et al. ,2014; framework positively, and fully agreed that it is applicable to
Emerson, 2003; Den Ouden, 2012). an organization that develops IoT-based products/services.
Regarding the different actors for whom the values can
be delivered, we confirmed another differential of Value 4.0
in comparison to the main value proposition frameworks
(Table 1), which usually focus only on customers. Although, The fourth round of evaluation (Analytical) – discussion
in the four cases, the participants also had this focus, they with IoT experts (practitioners)
started thinking about other actors.
For example, three companies (Alpha, Gama, and Delta) Finally, the fourth assessment (analytical) involved a discus-
considered their customer’s employees as relevant bystand- sion of the framework, analyzed by four practitioners with
ers. While Alpha was concerned that the IoT solution could experience in IoT applications. They highlighted the lack
capture images of employees and other people close to the of tools to support the value proposition of IoT-based prod-
smart cameras inside factories, Gama and Delta consid- ucts and services. Due to the IoT complexity (according to
ered that employees could fear losing their jobs due to the practitioner 1), the lack of clarity of the purpose and value
IoT solution, making its adoption harder. In this case, the being offered (according to practitioner 2), or the focus only
employees of the adopting companies are bystanders that on technical elements (according to practitioner 3), various
the IoT-based product/service can negatively impact. In their aspects have been disregarded or unknown by developers
view, it may destroy value for them instead of generating and suppliers of IoT-based products and services.
it. It must be carefully considered in the development of Practitioner 4 highlighted that tools such as the Business
value propositions of IoT solutions targeting the companies´ Model Canvas or the Value Proposition Canvas have not
goals (of productivity, for example) and not their employees been properly used and do not stimulate entrepreneurs to
specifically. reflect about their IoT-based products and services. Prac-
In addition, Gama's owner added its partners as impor- titioner 1 highlighted that, at events to select start-ups for
tant to scale the IoT solution. Alpha and Beta highlighted investment, he noticed that the start-ups offering products/
users' resistance to technology adoption as a cultural aspect services based on the IoT do not consider several factors that
to be considered. In general, the consideration of other actors can impact their success. He mentioned that there are excel-
received more attention by the participants. lent ideas, but they are blocked by issues such as legislation.
Regarding the framework's usage, we noted that Delta In addition, those responsible for selecting start-ups are not
explored the use of arrows to explicitly connect elements familiar with the complexity of the IoT and only belatedly
from different parts of the framework. There was alignment realize that some relevant aspect was not clear or was disre-
and relations between different elements in the other cases, garded. Practitioner 4 said start-ups face a challenge explain-
although the arrows were not used. This is a possibility to ing the differential of their IoT-based product/service since
improve the Value 4.0 in the future, which can help compa- they usually focus on technical aspects.
nies to reach an integrated view of the different values to be The practitioners agreed that the Value 4.0 can support
delivered to varied actors (Emerson, 2003). It can also help the development of value propositions for IoT-based prod-
companies to realize the links among different IoT features ucts and services, considering essential elements. They
and challenges to develop value propositions (Ghanbari reinforced the importance to consider several stakeholders
et al., 2017; Hudson, 2017). In the four cases, the framework related to the value proposition, and, above all, it is funda-
also helped to provide a whole picture of the elements linked mental to consider the customers/clients' value point of view
to the value proposition. for its success. For Practitioner 4, the focus should be more
13
on the customer, but it is important to understand how the to generate value. However, beyond this technology com-
customers perceive the value. plexity, we need to consider the affordances and constraints
Practitioner 2 suggested clarifying that there is no obliga- that can change the material agencies (Leonardi, 2011) and
tion to have a previous value proposition to use the frame- affect the value proposition for different types of actors.
work. Practitioner 3 suggested adding the “investor” as a Carefully considering this agency and its potential to gener-
new actor since the developers or the business owners, usu- ate new products and associated services is fundamental to
ally from start-ups, should consider the value they deliver to develop innovative value propositions.
them. He also emphasized the need to consider the “timing”
of the IoT-based solution, which means if the market and Theoretical implications
the targeted customers will accept/adopt the product in the
current context. He also mentioned the role of employees in The main theoretical contribution of the article is the pro-
boycotting the implementation of IoT-based products/ser- posed conceptualization (Fig. 2). It advances the literature
vices fearing losing their jobs. Practitioner 2 cited an exam- on value proposition by bringing the domains of technology
ple of a real case in which employees sabotaged the use of an and strategy closer together since previous value proposition
IoT device because they were afraid it was monitoring what frameworks do not consider the technology capabilities and
they were doing, while it was collecting data only about the challenges and the related affordances and constraints (as the
operation of the machine to which it was coupled. result of the imbrication of material and human agencies)
In sum, the second version of the artifact (Value 4.0) related to different stakeholders and their implications to the
received positive evaluation results and several suggestions value proposition.
for improvements. Considering these suggestions, several We claim that this consideration is fundamental to inno-
revisions were carried out. For instance, we renamed “Part- vate with the use of complex and multilayered technologies
ners” to “Partners/Investors”; the element "Physical Product such as the IoT, mainly because these technologies extend
Limitations" was included in level 1 of the IoT value layers; the material agencies of objects (Leonardi, 2011). It is fun-
"Limitations" was renamed to "Service/Product Limita- damental to consider this agency carefully and its affor-
tions" on level 5, "Security" was renamed to "Information dances and constraints to develop innovative value proposi-
Security" on level 4, and "Current value proposition" was tions for different actors in different contexts.
renamed to "Current value proposition (if it exists)"; and The proposed conceptualization can be considered to
“Strategy” was renamed to “Positioning” expressing better define the value proposition of products and services based
the product/service position in the market, if compared to on another emergent, complex, and multilayered technolo-
competitors. As suggested in the companies' evaluation, a gies in the future. It can inspire the adaptation of current
page with instructions on the use of the framework was also business models and value proposition frameworks to
created to facilitate its application. The final version of the encompass the affordances and constraints related to new
framework is presented in Fig. 8. technologies such as AI, advanced analytics, among oth-
ers, considering the imbrication between the technology
and human agencies, and all the different actors that these
Discussion technologies can impact.
Fleisch et al. (2014), Bilgeri et al. (2015), and Wolf
Summary of findings et al. (2019) previously indicated that the value proposi-
tion emerges from the integration of the physical and the
In this research, we designed and evaluated a new frame- digital components of the IoT, but the conceptualization and
work to support the development of value propositions of the proposed framework go beyond this view, emphasizing
IoT-based products and services. This framework indicates the encounter and imbrication of the material and human
several elements to be considered, encompassing different agencies (Leonardi, 2011; Majchrzak & Markus, 2013) in
types of value for different actors, interconnected with the the IoT application. Besides, although it is vital to consider
IoT architecture value levels and the correspondent affor- the core elements presented by pre-existing value propo-
dances and constraints that emerge from the relationship sition frameworks already widely tested and widespread
between them, which, by its turn, affects the strategic posi- in the literature, which apply to products and services in
tioning of products/services. general (Table 1), the research data confirmed that these
Developing an IoT-based product/service value propo- generic frameworks ignore the capabilities, limitations and
sition is a complex task because it can involve the use of the complexity involved in developing a product/service
several technologies in the IoT architecture (including based on a multilayered technology such as the IoT. Ignor-
sensors, different types of networks, big data, analytics, ing these elements can contribute to the failure in the value
machine learning, among others) that need to be integrated proposition and value perception by different stakeholders,
13
Value 4.0
What? For?
Customer Bystander Object Organizaon Partners/ Society Environment
Investors
Current Value Proposion (if exists)
Level 1:The thing and the purpose

Object
Functionalities
Problems that it solve
Needs that it attend
Impacts
Product physical limitations
Level 2: Sense and Act

Detect and capture
Act
Performance
Adaptation
Level 3: Connect
Connection
Information exchange
Level 4: Data
Storage
Data use
Access
Privacy
Information Security
Level 5: Service and Aplicaon

Service
Conditions
Service/Application Limitations
Funconal Economic Ecologic Psychological Social

Easy to use Price Culture
Implementation Costs Experience Accessibility
Update Effort Sustainability Diversity
Feelings
Scalability Time Resources use Ethic
Durability Rentability Legal
New value proposion

Positioning
Opportunities
Fig. 8 Value 4.0 Framework – final version
13
as commented by the companies ‘owners and practitioners complex and not naturalistic), it generated data about the use
in the last rounds of the framework evaluation. of the artifact in real life. However, every type of evaluation
Besides, the generated framework considers the value in a DSR, either artificial or naturalistic, has its strengths
proposition not only from a customer perspective, as hap- and limitations (as discussed by Venable et al., 2012); we
pens in the most generic value proposition frameworks conducted the four different evaluations rounds with differ-
(Table 1) and in generic business models frameworks in ent evaluation types exactly attempting to overcome these
which the value proposition is defined (for example, Oster- limitations.
walder & Pigneur, 2010), but it also considers the value per- In this sense, our research generates knowledge for the
spective from other actors, such as the society or bystanders. Design Science Research (DSR) practitioners. Mainly, we
Although the main focus of the framework evaluations was combined the use of three different evaluation techniques
on the value proposition to customers/clients of the IoT- (analytical, experimental, and observational) in four rounds,
based product and service, the research participants empha- involving participants with different profiles (academics,
sized the need to consider the value proposed to other actors expert practitioners, company owners) to evaluate the pro-
such as partners, investors, and client´s employees. posed framework. This combination brought different per-
We argue that these other actors deserve consideration spectives and suggestions to improve the DSR artifact. While
in the context of products and services created based on the the literature review and the first Delphi round allowed dis-
IoT due to the pervasive (and frequently invasive) material covering, in a broad sense, of the elements to be considered
agency of this technology. For example, Klein et al. (2020) in the framework, all the four evaluation phases (detailed in
examined challenges faced in the development of Google Table 2) refined the elements to be inserted on it and how
Glass (a smart product). These challenges are related to con- they could be better distributed, synthesized or combined
troversies on privacy and use of data, involving not only the into the framework, also indicating forms of improving its
users of Glass but also people around them and the societal presentation and usability.
aspects as a whole. The fact that smart products linked to We learned that complex artifacts such as the proposed
the IoT are used in different contexts (and are aware of it), framework (which considers several interrelated elements
capturing and processing data from different sources, in dif- involving both technological and human aspects), may
ferent ways, and for different purposes, demands to consider require different evaluation approaches, perspectives, and
the various actors that may be involved in its use, which is rounds until the artifact achieve a satisfactory form. Also,
crucial to the value proposition. It was clearly confirmed in although the results of the objective evaluation (question-
the application of the framework in the four companies and naire) were similar in all rounds of evaluation, each round
the evaluations received from the four practitioners. generated, through open questions, new ideas, insights, and
improvements to the framework.
Managerial implications
The main managerial contribution of our research is the cre- Limitations and directions for future research
ation and testing of the framework, called Value 4.0 (Fig. 8),
that was considered adequate to support the definition of As research limitations, although the proposed conceptu-
value propositions for IoT-based products and services both alization of the framework can be considered to define the
in artificial and naturalistic evaluations. The assessments value proposition of products and services based on another
of the framework by academics and practitioners and its emergent, complex, and multilayered technologies in the
application in four real businesses have shown that it can future and all the different actors that can be impacted by
help companies and entrepreneurs to improve existing value these technologies, the framework is focused on the fea-
propositions or generate new ones. tures of the IoT and related value propositions. Besides, the
The evaluations have indicated that the framework may framework was tested only by entrepreneurs, practitioners,
be more beneficial for IoT-based products and services that and IoT experts, without the participation of clients/users of
have not been consolidated or released to the market and can IoT-based products/services.
provide an integrated view of relevant elements in different As future research, the final version of the framework can
IoT value levels and perspectives. Besides, the framework be applied in collaboration with clients/users in a co-crea-
can help companies leverage the affordances related to the tion logic to enhance the understanding of this process from
IoT and deal with the constraints and risks of innovating the perspective of affordances and value perception. Also,
with this technology. future studies can address the perception of value destruc-
Although in the four cases the proposed framework has tion related to IoT-based products/services, by bystanders,
not been formally compared to other value proposition for example. Discussing the concept of value destruction is
frameworks (because it would make the evaluation process beyond the scope of this article.
13
The framework can also be applied in new cases, with Adzic, G. (2012). Impact Mapping: Making a big impact with
different product types, product development stages, and dif- software products and projects. Provoking Thoughts Lim-
ited. https://w ww.i mpact mappi ng.o rg/a ssets/i mpact_m appi
ferent sectors and company sizes. New applications can help ng_20121001_sample.pdf. Accessed 22 April 2019.
refine the framework and understand if some elements can Aken, JEv. (2004). Management research based on the paradigm of
be removed, inserted, changed, or better grouped. Evaluat- the design sciences: The quest for field-tested and grounded
ing the value perception (by different types of actors) of technological rules. Journal of Management Studies, 41(2),
219–246. https://doi.org/10.1111/j.1467-6486.2004.00430.x
IoT-based products and services is also an important topic Al-Fuqaha, A., Guizani, M., Mohammadi, M., Aledhari, M., &
for future research. We also noticed the potential to make Ayyash, M. (2015). Internet of things: A survey on enabling
the connections between the different IoT value levels and technologies, protocols, and applications. IEEE Communica-
dimensions proposed clearer. In this sense, creating a solutions Surveys & Tutorials, 17(4), 2347–2376. https://doi.org/
10.1109/COMST.2015.2444095
tion (for example, software) can help to support this process. Alioto, M., & Shahghasemi, M. (2018). The internet of things on its
edge: Trends toward its tipping point. IEEE Consumer Elec-
tronics Magazine, 7(1), 77–87. https://doi.org/10.1109/MCE.
2017.2755218
Conclusion Anderson, J. C., Narus, J. A., & Van Rossum, W. (2006). Customer
value propositions in business markets. Harvard Business
The IoT has the potential to change electronic markets by Review, 84(3).
Atzori, L., Iera, A., & Morabito, G. (2010). The internet of things:
allowing the generation of innovative products, services, A survey. Computer Networks, 54(15), 2787–2805. https://doi.
business, and revenue models, but it is a complex technol- org/10.1016/j.comnet.2010.05.010
ogy that presents several challenges impacting its adop- Atzori, L., Iera, A., & Morabito, G. (2017). Understanding the inter-
tion (Hsu & Lin, 2018; Manogaran et al., 2021; Wortmann net of things: Definition, potentials, and societal role of a fast
evolving paradigm. Ad Hoc Networks, 56, 122–140. https://doi.
et al., 2020), which requires new value propositions (Mani org/10.1016/j.adhoc.2016.12.004
& Chouk, 2018; Shih et al., 2016). Consequently, this study Barnes, C., Blake, H., & Pinder, D. (2009). Creating and delivering
aimed to answer the following research question: Which ele- your value proposition: Managing customer experience for
ments need to be considered to define value propositions profit. Kogan Page Publishers.
Beecham Research. (2017). M2M Sector Map. Retrieved August 1,
for IoT-based products and services? We used the Design 2018 from http://www.beechamresearch.com/download.aspx?
Science Research (DSR) to answer it. id=18. Accessed 22 April 2019.
The main theoretical contribution of the article is the Bhardwaj, S., & Kole, A. (2016). Review and Study of Internet of
proposed conceptualization, while the main practical con- Things: It’s the Future. IEEE.
Bilgeri, D., Brandt, V., Lang, M., Tesch, J., & Weinberger, M.
tribution is the framework Value 4.0, which is adequate to (2015). The IoT business model builder. Retrieved June 14,
support the definition of new value propositions for IoT- 2021 from http://www.semar.de/dh/Whitepaper_IoT-Business-
based products and services, also helping companies and Model-Builder.pdf. Accessed 22 April 2019.
entrepreneurs to improve existing propositions. Bititci, U. S., Martinez, V., Albores, P., & Parung, J. (2004). Creating
and managing value in collaborative networks. International
The proposed conceptualization and framework are rel- Journal of Physical Distribution & Logistics Management,
evant because the IoT is a platform that allows, among other 34(3/4), 251–268. https://doi.org/10.1108/09600030410533574
things, the creation of smart, connected products. These Bocken, N., Short, S., Rana, P., & Evans, S. (2013). A value mapping
products offer expanding opportunities for new function- tool for sustainable business modelling. Corporate Governance,
13(5), 482–497. https://doi.org/10.1108/CG-06-2013-0078
alities, greater reliability, higher product utilization, and Borgia, E. (2014). The internet of things vision: Key features, applica-
capabilities that transcend traditional product boundaries. tions and open issues [Review]. Computer Communications, 54,
These changes force companies to rethink and retool nearly 1–31. https://doi.org/10.1016/j.comcom.2014.09.008
everything they do internally (Porter & Heppelmann, 2014), Brookes, T. (2017). 14 Ridiculous Smart Home Products You Don’t
Need. Retrieved May 05, 2019 from https://www.makeuseof.
including the value proposition. com/tag/smart-home-products-dont-need/. Accessed 22 April
Still, several issues (as discussed) remain for future 2019.
research, as complex, multi-layered technologies such as Burkitt, F. (2014). A strategist's guide to the internet of things.
the IoT can be applied to create value that can impact differ- Strategy+Business, (77), 2–12.
Canhoto, A. I., & Clear, F. (2020). Artificial intelligence and machine
ent types of stakeholders through the increasing imbrication learning as business tools: A framework for diagnosing value
between the technological and human agency. destruction potential. Business Horizons, 63(2), 183–193. https://
doi.org/10.1016/j.bushor.2019.11.003
Chandler, J. D., & Vargo, S. L. (2011). Contextualization and value-in-
context: How context frames exchange. Marketing Theory, 11(1),
References 35–49. https://doi.org/10.1177/1470593110393713
Chandrashekhar, K. G., Karimi-Alaghehband, F., & Özgün, D. (2017).
Aagaard, A., Presser, M., Beliatis, M., Mansour, H., & Nagy, S. (2018). IoT Security Adoption into Business Processes: A Socio-Tech-
A Tool for Internet of Things Digital Business Model Innovation. nical View. 23rd Americas Conference on Information Systems,
2018 IEEE Globecom Workshops (GC Wkshps). Boston.
13
Da Xu, L., He, W., & Li, S. (2014). Internet of things in industries: Telecommunication Systems, 67(2), 367–385. https://doi.org/
A survey. IEEE Transactions on Industrial Informatics, 10(4), 10.1007/s11235-017-0343-y
2233–2243. https://doi.org/10.1109/TII.2014.2300753 Helkkula, A., Kelleher, C., & Pihlström, M. (2012). Characterizing
De Cremer, D., Nguyen, B., & Simkin, L. (2017). The integrity chal- value as an experience: Implications for service researchers
lenge of the Internet-of-Things (IoT): On understanding its dark and managers. Journal of Service Research, 15(1), 59–75.
side [Editorial Material]. Journal of Marketing Management, https://doi.org/10.1177/1094670511426897
33(1–2), 145–158. https://doi.org/10.1080/0267257x.2016. Hevner, A. R., March, S. T., Park, J., & Ram, S. (2004). Design sci-
1247517 ence in information systems research. MIS Quarterly, 28(1),
Den Ouden, E. (2012). Innovation design: Creating value for people, 75–105.
organizations and society. Springer Science & Business Media. Hsu, C.-L., & Lin, J.C.-C. (2018). Exploring factors affecting the adop-
Dijkman, R. M., Sprenkels, B., Peeters, T., & Janssen, A. (2015). Busi- tion of internet of things services. Journal of Computer Informa-
ness models for the internet of things. International Journal of tion Systems, 58(1), 49–57. https://doi.org/10.1080/08874417.
Information Management, 35(6), 672–678. https://doi.org/10. 2016.1186524
1016/j.ijinfomgt.2015.07.008 Hudson, D. (2017). Value propositions for the internet of things: Guid-
Emerson, J. (2003). The blended value proposition: Integrating social ance for entrepreneurs selling to enterprises. Technology Innova-
and financial returns. California Management Review, 45(4), tion Management Review, 7(11), 5–11. https://doi.org/10.22215/
35–51. https://doi.org/10.2307/41166187 timreview/1116
Ferneley, E., & Light, B. (2006). Secondary user relations in emerging Ikävalko, H., Turkama, P., & Smedlund, A. (2018). Value Creation in
mobile computing environments. European Journal of Informa- the Internet of Things: Mapping Business Models and Ecosystem
tion Systems, 15(3), 301–306. https://doi.org/10.1057/palgrave. Roles. Technology Innovation Management Review, 8(3), 5–15.
ejis.3000620 http://doi.org/10.22215/timreview/1142
Ferneley, E., & Light, B. (2008). Unpacking user relations in an Kambil, A., Ginsberg, A., & Bloch, M. (1996). Re-inventing value
emerging ubiquitous computing environment: Introducing the propositions [NYU Working Paper No. 2451/14205]. Informa-
bystander. Journal of Information Technology, 23(3), 163–175. tion Systems Working Papers Series. https://papers.ssrn.com/
https://doi.org/10.1057/palgrave.jit.2000123 sol3/papers.cfm?abstract_id=1 284822. Accessed 22 April 2019.
Fiore, E., Tamborrini, P., & Barbero, S. (2017). Design for next con- Kamble, S. S., Gunasekaran, A., Parekh, H., & Joshi, S. (2019). Mod-
nected appliances. The Design Journal, 20(sup1), S2634–S2644. eling the internet of things adoption barriers in food retail supply
https://doi.org/10.1080/14606925.2017.1352775 chains. Journal of Retailing and Consumer Services, 48, 154–
Fleisch, E., Weinberger, M., & Wortmann, F. (2014). Business models 168. https://doi.org/10.1016/j.jretconser.2019.02.020
and the Internet of things. 1–19. https://c ocoa.e thz.c h/d ownlo ads/ Kiel, D., Arnold, C., & Voigt, K. I. (2017). The influence of the indus-
2014/1 0/2 090_E N_B osch%2 0Lab%2 0Whit e%2 0Pape r%2 0GM% trial internet of things on business models of established manu-
20im%20IOT%201_2.pdf. Accessed 22 April 2019. facturing companies - a business level perspective. Technovation,
Gartner, Inc. (2018a). Building and Expanding a Digital Business 68, 4–19. https://doi.org/10.1016/j.technovation.2017.09.003
Primer for 2018a. Retrieved August 29, 2018a from https://w ww. Klein, A., Pacheco, F. B., & Righi, R. D. R. (2017). Internet of things-
gartner.com/doc/3846263/building-expanding-digital-business- based products/services: Process and challenges on developing
primer. Accessed 22 April 2019. the business models. Journal of Information Systems and Tech-
Gartner, Inc. (2018b). The Evolution of IoT and Its Impact on Adop- nology Management, 14, 439–461.
ters and Technology Providers: A Gartner Trend Insight Report. Klein, A., Sørensen, C., de Freitas, A. S., Pedron, C. D., & Elaluf-
Retrieved April 19, 2019 from https://www.gartner.com/docum Calderwood, S. (2020). Understanding controversies in digital
ent/3889895. Accessed 22 April 2019. platform innovation processes: The Google Glass case. Techno-
Gartner, Inc. (2019). Building and Expanding a Digital Business logical Forecasting and Social Change, 152, 119883. https://d oi.
Primer for 2019. Retrieved April 19, 2019 from https://www. org/10.1016/j.techfore.2019.119883
gartn e r. c om/ d ocum e nt/ c ode/ 3 75763? r ef= d disp & r efval= Kralewski, D. (2016). Business models of Internet of Things. EuroSym-
375763. Accessed 22 April 2019. posium on Systems Analysis and Design, Cham.
Gassmann, O., Frankenberger, K., & Csik, M. (2013). The St. Gallen Krotov, V. (2017). The Internet of Things and new business oppor-
Business Model Navigator. Retrieved April 19, 2019 from https:// tunities. Business Horizons, 60(6), 831–841. https://doi.org/10.
www.a lexan dria.u nisg.c h/2 24941/7 /B usine ss%2 0Mode l%2 0Nav 1016/j.bushor.2017.07.009
igator%20working%20paper.pdf. Accessed 22 April 2019. Lanning, M. J. (1998). Delivering profitable value. Perseus Books
Ghanbari, A., Laya, A., Alonso-Zarate, J., & Markendahl, J. (2017). Group.
Business development in the internet of things: A matter of Lanning, M. J., & Michaels, E. G. (1988). A business is a value deliv-
vertical cooperation. IEEE Communications Magazine, 55(2), ery system. McKinsey Staff Paper, 41(June).
135–141. https://doi.org/10.1109/mcom.2017.1600596cm Leminen, S., Rajahonka, M., Westerlund, M., & Wendelin, R. (2018).
Giannarou, L., & Zervas, E. (2014). Using Delphi technique to build The future of the Internet of Things: Toward heterarchical eco-
consensus in practice. International Journal of Business Science systems and service business models. Journal of Business &
& Applied Management (IJBSAM), 9(2), 65–82. Industrial Marketing, 33(6), 749–767. https://doi.org/10.1108/
Giaretta, P., & Guarino, N. (1995). Ontologies and knowledge bases JBIM-10-2015-0206
towards a terminological clarification. Towards Very Large Leminen, S., Westerlund, M., Rajahonka, M., & Siuruainen, R. (2012).
Knowledge Bases: Knowledge Building & Knowledge Sharing, Towards IOT ecosystems and business models. In Internet of
25(32), 307–317. things, smart spaces, and next generation networking (pp.
Gibson, J. J. (1977). The Theory of Affordances. In R. Shaw & J. Brans- 15–26). Springer.
ford (Eds.), Perceiving, Acting, and Knowing (pp. 67–82). Wiley. Leonardi, P. M. (2011). When flexible routines meet flexible technolo-
Gierej, S. (2017). The Framework of Business Model in the Context gies: Affordance, constraint, and the imbrication of human and
of Industrial Internet of Things. 7th International Conference on material agencies. MIS Quarterly, 35(1), 147–167.
Engineering, Project, and Production Management, Amsterdam. Lin, J., Yu, W., Zhang, N., Yang, X. Y., Zhang, H. L., & Zhao, W.
Hammoudi, S., Aliouat, Z., & Harous, S. (2018). Chal- (2017). A Survey on internet of things: Architecture, enabling
lenges and research directions for Internet of Things. technologies, security and privacy, and applications. IEEE
13
Internet of Things Journal, 4(5), 1125–1142. https://doi.org/ Nolin, J., & Olson, N. (2016). The Internet of Things and conveni-
10.1109/jiot.2017.2683200 ence. Internet Research, 26(2), 360–376. https://d oi.o rg/1 0.1 108/
Lindley, J., Coulton, P., & Cooper, R. (2017). Why the internet of IntR-03-2014-0082
things needs object orientated ontology. The Design Journal, Osterwalder, A. (2004). The business model ontology: A proposition
20(sup1), S2846–S2857. https://doi.org/10.1080/14606925. in a design science approach [Tese, Universidade de Laus-
2017.1352796 anne]. https://serval.unil.ch/resource/serval:BIB_R_4210.P001/
Lohan, V., & Singh, R. P. (2017, 2018). Research challenges for REF.pdf. Accessed 22 April 2019.
Internet of Things: A review 2017. International Conference Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A
on Computing and Communication Technologies for Smart handbook for visionaries, game changers, and challengers. Wiley.
Nation (IC3TSN), Gurgaon. https://ieeexplore.ieee.org/docum Osterwalder, A., Pigneur, Y., Smith, A., Bernarda, G., & Papadakos, P.
ent/8284461/. Accessed 22 April 2019. (2014). Value Proposition Design: How to Create Products and
Majchrzak, A., & Markus, M. L. (2013). Technology affordances Services Customers Want (1st edn). Wiley.
and constraints in management information systems (MIS). In Paukstadt, U., & Becker, J. (2021). Uncovering the business value of
E. Kessler (Ed.), Encyclopedia of Management Theory. Sage. the Internet of things in the energy domain – a review of smart
Mani, Z., & Chouk, I. (2017). Drivers of consumers’ resistance to energy business models. Electronic Markets, 31(1), 51–66.
smart products. Journal of Marketing Management, 33(1–2), https://doi.org/10.1007/s12525-019-00381-8
76–97. https://d oi.o rg/1 0.1 080/0 26725 7x.2 016.1 24521 2 Payne, A., Frow, P., & Eggert, A. (2017). The customer value propo-
Mani, Z., & Chouk, I. (2018). Consumer resistance to innovation in sition: Evolution, development, and application in marketing.
services: Challenges and barriers in the internet of things era. Journal of the Academy of Marketing Science, 45(4), 467–489.
Journal of Product Innovation Management, 35(5), 780–807. https://doi.org/10.1007/s11747-017-0523-z
https://doi.org/10.1111/jpim.12463 Peffers, K., Tuunanen, T., Rothenberger, M. A., & Chatterjee, S.
Manogaran, G., Chilamkurti, N., & Hsu, C.-H. (2021). Internet (2007). A design science research methodology for information
of things for electronic markets. Electronic Markets, 31(1), systems research. Journal of Management Information Systems,
13–15. https://doi.org/10.1007/s12525-021-00468-1 24(3), 45–77. https://doi.org/10.2753/MIS0742-1222240302
Mason, K. J., & Alamdari, F. (2007). EU network carriers, low cost Perera, C., Zaslavsky, A., Christen, P., & Georgakopoulos, D. (2014).
carriers and consumer behaviour: A Delphi study of future Context aware computing for the Internet of things: A survey.
trends. Journal of Air Transport Management, 13(5), 299–310. IEEE Communications Surveys & Tutorials, 16(1), 414–454.
https://doi.org/10.1016/j.jairtraman.2007.04.011 https://doi.org/10.1109/SURV.2013.042313.00197
Mattern, F., & Floerkemeier, C. (2010). From the Internet of Com- Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected
puters to the Internet of Things. In K. Sachs, I. Petrov I. & P. products are transforming competition. Harvard Business
Guerrero (Eds.), From active data management to event-based Review, 92(11), 64–88.
systems and more (vol. 6462, pp. 242–259). Springer. Porter, M. E., & Heppelmann, J. E. (2015). How smart, connected
Mazhelis, O., & Tyrvainen, P. (2014). A Framework for Evaluating products are transforming companies. Harvard Business Review,
Internet-of-Things Platforms: Application Provider Viewpoint. 93(10), 96–114.
2014 IEEE World Forum on Internet of Things, Seoul. https:// Prat, N., Comyn-Wattiau, I., & Akoka, J. (2015). A taxonomy of evalu-
ieeexplore.ieee.org/document/6803137/. Accessed 22 April ation methods for information systems artifacts. Journal of Man-
2019. agement Information Systems, 32(3), 229–267. https://d oi.o rg/1 0.
McKinsey & Company. (2019). Internet of Things: We help clients 1080/07421222.2015.1099390
unlock value by digitizing the physical world. Retrieved April Rad, B. B., & Ahmada, H. A. (2017). Internet of Things: Trends,
20, 2019 from https://www.mckinsey.com/featured-insights/ Opportunities, and Challenges. International Journal of Com-
Internet-of-things/how-we-help-clients. puter Science and Network Security, 17(7), 89–95.
McPhee, C. (2017). Editorial: Insights [Editorial Material]. Technol- Ray, P. P. (2017). Internet of things for smart agriculture: Technologies,
ogy Innovation Management Review, 7(11), 3–4. https://doi. practices and future direction. Journal of Ambient Intelligence
org/10.22215/timreview/1115 and Smart Environments, 9(4), 395–420. https://d oi.o rg/1 0.3 233/
Metallo, C., Agrifoglio, R., Schiavone, F., & Mueller, J. (2018). ais-170440
Understanding business model in the Internet of Things indus- Rehabstudio. (2019). The Internet of Useless Things. Retrieved May
try. Technological Forecasting and Social Change, 136, 298– 01, 2019 from internetofuselessthings.io.
306. https://doi.org/10.1016/j.techfore.2018.01.020 Rintamäki, T., Kuusela, H., & Mitronen, L. (2007). Identifying com-
Miorandi, D., Sicari, S., De Pellegrini, F., & Chlamtac, I. (2012). petitive customer value propositions in retailing. Managing Ser-
Internet of things: Vision, applications and research chal- vice Quality: An International Journal, 17(6), 621–634. https://
lenges. Ad Hoc Networks, 10(7), 1497–1516. https://doi.org/ doi.org/10.1108/09604520710834975
10.1016/j.adhoc.2012.02.016 Rowe, G., & Wright, G. (1999). The Delphi technique as a forecasting
Mishra, D., Gunasekaran, A., Childe, S. J., Papadopoulos, T., Dubey, tool: Issues and analysis. International Journal of Forecasting,
R., & Wamba, S. (2016). Vision, applications and future chal- 15(4), 353–375. https://d oi.o rg/1 0.1 016/S
0169-2 070(99)0 0018-7
lenges of Internet of Things: A bibliometric study of the recent Ruengittinun, S., Phongsamsuan, S., & Sureeratanakorn, P. (2017).
literature. Industrial Management & Data Systems, 116(7), Applied Internet of Thing for Smart Hydroponic Farming Eco-
1331–1355. https://doi.org/10.1108/IMDS-11-2015-0478 system (HFE). IEEE.
Nambisan, S. (2017). Digital Entrepreneurship: Toward a Digital Rymaszewska, A., Helo, P., & Gunasekaran, A. (2017). IoT powered
Technology Perspective of Entrepreneurship. Entrepreneur- servitization of manufacturing - an exploratory case study. Inter-
ship Theory and Practice, 41(6), 1029–1055. https://doi.org/ national Journal of Production Economics, 192, 92–105. https://
10.1111/etap.12254 doi.org/10.1016/j.ijpe.2017.02.016
Nambisan, S., Wright, M., & Feldman, M. (2019). The digital trans- Saldaña, J. (2009). The coding manual for qualitative researchers.
formation of innovation and entrepreneurship: Progress, chal- SAGE.
lenges and key themes. Research Policy, 48(8), 103773. https:// Sales, T. P., Guarino, N., Guizzardi, G., & Mylopoulos, J. (2017, 2017).
doi.org/10.1016/j.respol.2019.03.018 An Ontological Analysis of Value Propositions. 2017 IEEE 21st
13
International Enterprise Distributed Object Computing Confer- Venable, J., Pries-Heje, J., & Baskerville, R. (2016). FEDS: A frame-
ence (EDOC), Quebec City. https://ieeexplore.ieee.org/docum work for evaluation in design science research. European Journal
ent/8089878/. of Information Systems, 25(1), 77–89. https://doi.org/10.1057/
Sethi, P., & Sarangi, S. R. (2017). Internet of things: architectures, ejis.2014.36
protocols, and applications. Journal of Electrical and Computer Watson, L. (2017). 15 Idiotic Internet of Things Devices Nobody
Engineering, 2017. https://doi.org/10.1155/2017/9324035. Asked For. Retrieved April 01, 2019 from https://gizmodo.com/
Shih, L. H., Lee, Y. T., & Huarng, F. (2016). Creating Customer Value 15-idiotic-Inter net-of-things-devices-nobody-asked-for-17943
for Product Service Systems by Incorporating Internet of Things 30999. Accessed 22 April 2019.
Technology. Sustainability, 8(12), 16. https://doi.org/10.3390/ Weber, R. H. (2010). Internet of things – new security and privacy chal-
su8121217. lenges. Computer Law & Security Review, 26(1), 23–30. https://
Shin, D. H., & Park, Y. J. (2017). Understanding the Internet of Things doi.org/10.1016/j.clsr.2009.11.008
ecosystem: Multi-level analysis of users, society, and ecology. Webster, J., & Watson, R. T. (2002). Analyzing the past to prepare
Digital Policy Regulation and Governance, 19(1), 77–100. for the future: Writing a literature review. MIS Quarterly, 26(2),
https://doi.org/10.1108/dprg-07-2016-0035 13–23.
Shoukry, A., Khader, J., & Gani, S. (2021). Improving business pro- Whitmore, A., Agarwal, A., & Da Xu, L. (2015). The Internet of
cess and functionality using IoT based E3-value business model. Things—A survey of topics and trends. Information Sys-
Electronic Markets, 31(1), 17–26. https://d oi.o rg/1 0.1 007/ tems Frontiers, 17(2), 261–274. https:// d oi. o rg/ 1 0. 1 007/
s12525-019-00344-z s10796-014-9489-2
Siegel, J. E., Kumar, S., & Sarma, S. E. (2017). The future Internet Wnuk, K., & Murari, B. T. (2016). The Impact of Internet of Things
of things: Secure, efficient, and model-based. IEEE Internet of on Software Business Models. In A. Maglyas & A. L. Lamprecht
Things Journal, 5(4), 2386–2398. https://doi.org/10.1109/JIOT. (Eds.), Software Business (vol. 240, pp. 94–108). Springer Int
2017.2755620 Publishing Ag. https://doi.org/10.1007/978-3-319-40515-5_7.
Skulmoski, G. J., Hartman, F. T., & Krahn, J. (2007). The Delphi Wolf, V., Stumpf-Wollersheim, J., & Schott, L. (2019). The Internet
method for graduate research. Journal of Information Technology of Things in a Business Context: Implications with Respect to
Education: Research, 6(1), 1–21. https://doi.org/10.28945/199 Value Creation, Value Drivers, and Value Capturing. In B. J.
Sundmaeker, H., Guillemin, P., Friess, P., & Woelfflé, S. (2010). Vision Baierl R., Brem A. (Ed.), Digital Entrepreneurship (pp. 185–
and challenges for realising the Internet of Things. Cluster of 197). Springer.
European Research Projects on the Internet of Things, European Wortmann, F., Herhausen, D., Bilgeri, D., Weinberger, M., & Fleisch,
Commision, 3(3), 34–36. https://doi.org/10.2759/26127 E. (2020). Capturing value in the internet of things. Marketing
Suppatvech, C., Godsell, J., & Day, S. (2019). The roles of Internet Review St. Gallen, 37(1), 48–55.
of things technology in enabling servitized business models: A Yaqoob, I., Ahmed, E., Hashem, I. A. T., Ahmed, A. I. A., Gani, A.,
systematic literature review. Industrial Marketing Management, Imran, M., & Guizani, M. (2017). Internet of things architecture:
82, 70–86. https://doi.org/10.1016/j.indmarman.2019.02.016 Recent advances, taxonomy, requirements, and open challenges.
Techonomy. (2016). Digital Transformation, IoT and the Future. IEEE Wireless Communications, 24(3), 10–16. https://doi.org/
Retrieved April 01, 2019 from https:// t echo n omy. c om/ 10.1109/MWC.2017.1600421
conf/ nyc/ v ideos- n etwo r ked- every t hing/ d igit a l- t rans forma Zanella, A., Bui, N., Castellani, A., Vangelista, L., & Zorzi, M. (2014).
tion-iot-and-the-future/. Internet of things for smart cities. IEEE Internet of Things Jour-
Treacy, M., & Wiersema, F. (1993). Customer intimacy and other value nal, 1(1), 22–32. https://doi.org/10.1109/jiot.2014.2306328
disciplines. Harvard Business Review, 71(1), 84–93. Zemke, D. M., Zhong, Y. Y., & Raab, C. (2019). A building’s design
Turgut, D., & Boloni, L. (2017). Value of information and cost of pri- quality: Measuring the esoteric. Property Management, 37(1),
vacy in the internet of things. IEEE Communications Magazine, 97–114. https://doi.org/10.1108/PM-12-2017-0068
55(9), 62–66. https://doi.org/10.1109/mcom.2017.1600625 Webster, J., & Watson, R. T. (2002). Analyzing the past to prepare
van Deursen, A. J., & Mossberger, K. (2018). Any thing for anyone? A for the future:Writing a literature review. MIS Quarterly, 26(2),
new digital divide in internet-of-things skills. Policy & Internet, 13–23.
10(2), 122–140. https://doi.org/10.1002/poi3.171
Venable, J., Pries-Heje, J., & Baskerville, R. (2012). A comprehensive Publisher's note Springer Nature remains neutral with regard to
framework for evaluation in design science research. In R. M. jurisdictional claims in published maps and institutional affiliations.
Peffers K., Kuechler B. (Ed.), Design Science Research in Infor-
mation Systems. Advances in Theory and Practice. DESRIST
2012. Lecture Notes in Computer Science (vol. 7286, pp. 423–
438). Springer.
13

EM Klein ValueProposition IoT Canvas2022 Leitura

Uploaded by

Copyright:

Available Formats

EM Klein ValueProposition IoT Canvas2022 Leitura

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

EM Klein ValueProposition IoT Canvas2022 Leitura

Uploaded by

Copyright:

Available Formats

Electronic Markets

Value proposition of IoT‑based products and services: a framework

Received: 18 June 2021 / Accepted: 4 April 2022

Keywords Internet of things · Value proposition · Affordances · Design science research

JEL Classification M1 M15

Table 1 Top cited general value Reference # Name Source

Table 2 Rounds of evaluation of the artifact

Table 3 Elements to be considered in value propositions based on the IoT

Fig. 1 IoT value creation lay-

Fig. 2 The conceptualization –

Fig. 3 Value proposition framework for IoT-based products/services – first version

Fig. 4 Framework application: Case Alpha

Fig. 5 Framework application: Case Beta

Fig. 6 Framework application: Case Gama

Fig. 7 Framework application: Case Delta

Current Value Proposion (if exists)

Level 1:The thing and the purpose

Level 2: Sense and Act

Level 5: Service and Aplicaon

Funconal Economic Ecologic Psychological Social

New value proposion

Fig. 8 Value 4.0 Framework – final version

You might also like

Current Value Proposion (if exists)

Level 5: Service and Aplicaon

Funconal Economic Ecologic Psychological Social

New value proposion