Implementing Modularization in Professional Services—The Influence of Varied Knowledge Environments

Abstract

Professional services represent a specific type of business service, one that is strongly based on the knowledge of individual professionals and organizational processes to harness that knowledge. Modularization can help in coordinating creation of the offering and enhancing the cost‐effectiveness of processes. However, utilizing modularity in services, and particularly in professional service firms, is still a field that deserves specific studies. While the product modularity literature has developed definitions, metrics, and a number of hypotheses about modularity, in the field of professional services, we still have to clarify how firms can use modularity.While professional services are often generated from expert‐embedded and even tacit knowledge, which is hard to transfer, implementing modularity may offer one way to facilitate knowledge sharing related to service offerings, organizational processes, and practices. However, when considering the strategic importance of modularity for a professional service firm, it is also necessary to define what the characteristics are in the knowledge base of the organization. Not all professional service firms are alike. The purpose of the present study is to examine how service modularity can be employed within the context of professional services. More specifically, (1) what knowledge‐related characteristics vary between different types of professional service firms? (2) How do these characteristics influence modularization implementation? Two company cases are analyzed to reveal how modularity can be implemented in varying professional service firm environments. Copyright © 2017 John Wiley & Sons, Ltd.