Balancing Customization and Standardization in Knowledge Intensive Business Services: The Use of Modular Service Architectures

38 Pages Posted: 14 Sep 2012

See all articles by Anna Cabigiosu

Anna Cabigiosu

Ca Foscari University of Venice

Diego Campagnolo

University of Padua - Department of Economics

Andrea Furlan

University of Padua - Department of Economics

Giovanni Costa

University of Padua

Date Written: September 13, 2012

Abstract

While the mainstream literature on knowledge-intensive business services (KIBS) has long emphasized their customized nature and their role in exploring new knowledge to satisfy each client's needs, recent research has argued that competition is inducing KIBS firms to standardize their offer. In this paper, we concentrate on a particular type of KIBS firms, third-party logistic service providers (TPLs), and analyze how two TPLs face the customization-standardization trade-off by using service architectures. We find that TPLs do not trade off customization for standardization, instead they manage to pursue both simultaneously relying on modular services, which constitutive elements are standard procedures. Service modularity enables the TPL to exploit its existing knowledge base while only some knowledgeable clients prompt TPLs to explore new procedures. Overall, our results suggest that service customization and knowledge exploration can be separated. TPLs should manage their customer relationships using a portfolio approach, balancing supply relationships in which they replicate existing services with partnership-based relationships with competent customers in which they develop new procedures. Managing the temporal separation between exploration and exploitation consequently becomes a core competence.

Keywords: Services, Innovation, Performance, Standard services, Modular services

JEL Classification: O32, O33

Suggested Citation

Cabigiosu, Anna and Campagnolo, Diego and Furlan, Andrea and Costa, Giovanni, Balancing Customization and Standardization in Knowledge Intensive Business Services: The Use of Modular Service Architectures (September 13, 2012). Università Ca' Foscari Venezia Department of Management Working Paper No. 11/2012, Available at SSRN: https://ssrn.com/abstract=2146172

Anna Cabigiosu (Contact Author)

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Diego Campagnolo

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy
00390498274247 (Phone)
00390498274211 (Fax)

Andrea Furlan

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy

Giovanni Costa

University of Padua ( email )

Via 8 Febbraio, 2
Padova, Vicenza 35122
Italy

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