The mutual influence of digitalization and customer relationships – example of a contract manufacturer

Abstract

THE AIMS OF THE PAPER

It is a common sense that digitalization is influencing business relationships, consequently customer relationships. It is less known how this influence occurs. In addition, does customer relationship influence digitalization? The purpose of this study is to explore the relations between digitization and customer relationships in the field of contract manufacturing. In this exploratory research, we have two research questions: 1) What is the influence of the digitalization on customer relationships? 2) What is the influence of customer relationship on digitalization?

METHODOLOGY

Our empirical evidence is based on a single case study on Videoton Electronic Assembly Services (VEAS) company and its customer relationships. The mutual influence of digitalization and customer relationship was analyzed from the Industrial Marketing and Purchasing (IMP) Group approach based on the business relationship functions, namely the actor, the relationship and the network level.

MOST IMPORTANT RESULTS

Breaking down customer relationships into relationship functions at the single actor level, we found that if some company functions need to be digitalized (e.g. HR, finance), it often demands transient solutions. At the business relationship levelflexibility to respond to the clients’ expectations, demands different levels and types of digitalization. At the network level, it is possible to establish new customer relationships as a consequence of the existing level of digitization. In the case of VEAS the whole point of the story is that digital transition and customer relationships are in a drag-and-drop situation, hence the variability of customer needs and the need of the company to fulfill these customer needs are key issues in digital transition as well.

RECOMMENDATIONS

From managerial point of view, if managers are aware of and pay attention to these influences, namely the different types of digitalization (Pagani & Pardo 2017); and the company level, relationship level and network level of customer relationship functions in digital transition, they can match company’s goals and customers’ expectations with the different digital solutions better.