The Business of Systems Integration

By Andrea Prencipe; Andrew Davies et al. | Go to book overview

16 Integrated Solutions

The Changing Business of Systems Integration

Andrew Davies

SPRU, University of Sussex, UK


16.1 Introduction

Recent literature on business strategy argues that firms should concentrate less on making stand-alone physical products and more on delivering high-value services and solutions to a customer's needs (Quinn 1992 ; Slywotzky 1996 ; Slywotzky and Morrison 1998 ; Hax and Wilde 1999 ; Sharma and Molloy 1999 ; Wise and Baumgartner 1999 ; Cornet et al. 2000 ; Bennett, Sharma, and Tipping 2001 ; Foote et al. 2001 ; Galbraith 2002). All of these authors argue that competitive advantage is not simply about providing services, but how services are combined with products to provide high-value 'integrated solutions' that address a customer's business or operational needs.

Although this recent trend in business strategy has attracted the attention of management consultants, business strategy authors and practitioners, with few exceptions (e.g. Hax and Wilde 1999 ; Galbraith 2002) there has been surprisingly little academic research on this subject. In an attempt to redress this imbalance, this chapter concentrates on the most cogent and convincingly argued case for the shift to services put forward by Wise and Baumgartner (1999). These authors argue that firms are building on their base in manufacturing and moving downstream into the provision of services and solutions to distribute, operate, maintain, and finance a product through its life cycle.

The chapter aims to test Wise and Baumgartner's claims that firms are integrating forwards into services and solutions by examining recent changes in the strategies of leading international firms. It focuses on suppliers of an important high-cost subset of capital goods called complex products and systems (CoPS), such as flight simulators (Miller et al. 1995), mobile phone networks (Davies 1997) and aero-engines (Prencipe 1997). In contrast to consumer goods industries that produce standardized products in high-volume for large final consumer markets, CoPS are produced as one-off projects or in small tailored batches to meet the particular needs of government, institutional, and business customers (Hobday 1998).

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The Business of Systems Integration
Table of contents

Table of contents

  • The Business of Systems Integration iii
  • Contents vii
  • Preface ix
  • Acknowledgments xi
  • Notes on Contributors xiii
  • List of Figures xix
  • List of Tables xxi
  • References 12
  • Part I the History of Systems Integration 14
  • 2 Inventing Systems Integration 15
  • References 32
  • 3 Systems Integration and the Social Solution of Technical Problems in Complex Systems 35
  • References 54
  • 4 Integrating Electrical Power Systems 56
  • Acknowledgements 74
  • 5 Specialization and Systems Integration 78
  • References 89
  • Part II Theoretical and Conceptual Perspectives on Systems Integration 93
  • References 110
  • 7 Corporate Strategy and Systems Integration Capabilities 114
  • References 130
  • 8 The Role of Technical Standards in Coordinating the Division of Labour in Complex System Industries 133
  • References 150
  • 9 The Cognitive Basis of Systems Integration 152
  • References 171
  • 10 Towards a Dynamics of Modularity 174
  • References 196
  • Part III Competitive Advantage and Systems Integration 199
  • 11 The Geography of Systems Integration 201
  • References 226
  • 12 Modularity and Outsourcing 229
  • Acknowledgement 251
  • Acknowledgement 275
  • References 276
  • 14 Systems Integration in the Us Defence Industry 279
  • Acknowledgement 302
  • References 304
  • 15 Changing Boundaries of Innovation Systems 307
  • References 330
  • 16 Integrated Solutions 333
  • Acknowledgement 365
  • References 367
  • Index 369
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