Developing the value perception of the business customer through service modularity

Abstract

PurposeThe present challenge for many service firms is to develop an offering that is flexible and open for tailoring and at the same time achieves efficiency through standardizing processes. Modularity has been suggested as being one tool for achieving this. The goal of the present study is to find out how services provided in modular form (here referred to as service modularity) can exert an influence on the value perception of the customer in the professional services field.Design/methodology/approachEmpirical part consists of a case study of a large provider of professional services involving construction, engineering, procurement and project management service. Data were gathered by semi structured theme interviews of representatives of the case company and representatives of two of its customers.FindingsThe modular processes had an influence on the customer's expectations that are related to the experienced quality of the service, and hence they create value for the customer. In addition to the service outcome, the modular processes enhanced the customer's trust in the service provider's employees and their skills in co‐operating in a suitable way during the service process. The organizational modularity eased the customer's tasks of managing the project implementation.Originality/valueThe present study contributes the knowledge related to modularity in business services by incorporating the knowledge from the theoretical discussion on customer perceived value.

On Service Innovation and Realization in Manufacturing Firms

“…In order to coordinate and reproduce service innovation initiatives, the modular approach considers service element as part of a platform with resources that can be used for different customers and different needs. This study contributes to previous theory on modularity where customer resources not have been taken into consideration (See, for example, Bask, Lipponen, Rajahonka, & Tinnilä, 2010Rahikka, Ulkuniemi, & Pekkarinen, 2011). Paper III emphasizes modularization and modular strategies and Paper V develops a typology for interaction modes in service innovation.…”

Modularizing product extension services: An approach based on modified service blueprint and fuzzy graph

“…Feasibility and potential advantages of service modularization are also analyzed in this research. Advantages of service modularization includes cost reduction, high service quality, service customization, flexibility, reusability, standardization, and simplification (Burr, 2005;de Blok, Luijkx, Meijboom, & Schols, 2010;Rahikka, Ulkuniemi, & Pekkarinen, 2011). Böttcher and Klingner (2011) also propose that service modularization can minimize the problems in service offerings, such as loss of economies of scale caused by no standardization of complex services, less structured planning and provision caused by no ability to handle the service complexity, reinventing or re-planning existing service offerings resulted from no opportunity to reuse existing service offerings, and suboptimal offerings derived from no or poorly documented service catalogues.…”

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“…The connection of various types of innovation, such as deployment and organization in this case, offers a potential research avenue. Service researchers also call for more insight into how to develop flexible, customized offerings while achieving efficiency in deployment through standardized processes (Rahikka, Ulkuniemi, & Pekkarinen, 2011). To develop and elaborate on deployment issues, the concept of service modularity offers an interesting avenue; it refers to "the smallest service unit that can be offered to a customer in itself or as a part of a service offering creating value perceived by the customer" (Rahikka et al, 2011, p. 358).…”