The present study scrutinizes how an incumbent solution provider executes smart solution development (SSD). We aim to contribute to digital servitization research, which primarily focuses on either product, service, or software development, thus overlooking the integrative aspect of SSD. We unfold the holistic SSD development process in a single case study through 23 manager interviews, observational data, and strategic document analysis. The study extends the product-service innovations (PSI) literature by 1) identifying a set of innovation routines, such as collaborative, customer-focused, and decision-making, 2) demonstrating innovation management processes and practices associated with those routines, and 3) highlighting the co-alignment of innovation processes, routines, and practices to achieve improved outcomes from SSD. The study translates the empirical work into a framework and a set of propositions to guide future research. For managers, the study provides a framework and a set of capability-enhancing practices for a benchmark. •The single case study of Wärtsilä Corporation investigates how incumbent firms align their innovation processes, routines, and practices to facilitate smart solution development (SSD).•The present study lists altogether 14 innovation routines that help firm to overcome challenges regarding product, service, and software integration.•These routines are categorized into collaborative, customer-focused, and decision-making routines.•Firms can consider a synchronized innovation process instead of tailored models for new products, services, and software.