Creating value by delivering integrated solutions

Abstract

This paper examines how suppliers of complex capital goods are moving into the provision of integrated solutions -unique combinations of products and services that address a customerÕs specific business problems. Integrated solutions providers need to develop or acquire new capabilities as they shift from being product-or service-centric to customer centric. Integrated solutions projects extend the traditional life-cycle to include pre-bid and post implementation activities requiring innovative approaches to creating value for suppliers and their customers.

Solutions offerings: a critical review and reconceptualisation

“…Customisation needs to be combined with well-defined modular structures to achieve economies of scale at the component level. Brady et al 2005a Integrated solution: bringing together of products and services in order to address a customer's particular business or operational requirements. Sawhney 2006 Two key dimensions: degree of integration (market and operational) and degree of customisation.…”

“…Sawhney (2006) discusses customer solutions, defining them as -an integrated combination of products and services customised for a set of customers that allows customers to achieve better outcomes than the sum of the individual components‖ (p. 369). Brady et al (2005a) are one of several users of the term integrated solution, which they define as -bringing together of products and services in order to address a customer's particular business or operational requirements-(p. 572). This integration aspect of a solution is also pinpointed by authors who do not explicitly include it in their terminology.…”

“…Differentiation from the competition by offering solutions to customers can be seen as a way of escaping the -commodity magnet‖ (Stremersch et al, 2001). It is hard to deny that commoditisation is occurring in general, and the phenomenon is emphasised in the subject-specific literature by Brady et al (2005a). It is also one reason for the growth in the number of so-called EMS (Electronic Manufacturing Services) providers in the electronics contract manufacturing industry, which exploit the economies of scale in manufacturing as a service to such manufacturers as Ericsson and IBM.…”

“…These characteristics are, however, probably more valid in the case of solutions connected to ill-structured problems and heuristic solutions than to those involving the well-structured and algorithmic alternatives. Furthermore, although the solutions process can usually be broken into distinct steps (Brady et al, 2005a;Tuli et al, 2007), the activities within each phase need to be carried out in a more iterative manner if the solution involves a high degree of heuristic problem solving.…”

Transforming from service providers to solution providers: implications for provider-customer relationships and customer-induced solution innovation

“…First, to offer more customer-focused solutions or to become a more customer-centric company, a change in the firm's orientation is required. In other words, the move towards integrated solutions provision implies a change of emphasis (Brady et al, 2005), which "requires a real reorganization around the customer" (Cova and Salle, 2007) and a "change in mind set, conceptual approach, capabilities and organization" [Sharma and Molloy, (1999), p.1]. As a second challenge, there is a clear need for new capabilities (e.g., system integration or business consulting capabilities) and new skills (e.g., key account management, information and innovation management).…”