Product-Service Systems (PSSs) have emerged in the last years as a means of integrating products and services in a coordinated manner, to deliver functional results that increase customer value while achieving environmental sustainability. Nevertheless, the design and development of these systems is hindered by the absence of consistent and robust approaches that facilitate their implementation. The initial phases of the design of any solution, product or service oriented, are the vital stages where its key elements are determined. The research proposes a functional approach based on morphological reasoning to address the PSS design concerns. The approach enables the integration of products, services while capturing the values and costs of their respective providers and receivers. Life cycle modeling is then applied to evaluate the environmental impact of such a concept while a cost analysis portrays the economic benefits that can be achieved. A case study at an agricultural manufacturer demonstrates the use of the described approach and exhibits the advantages that can be achieved through a PSS application.