Abstract
PurposeDue to the convergence of rapid business developments and digitization challenges, service orientation is back on the research agenda as a concept to improve firms’ business services. Yet, little is known about the type of determinants that are relevant and to what degree they affect a firm’s service-oriented strategy.Design/methodology/approachBuilding on structural equation modeling (SEM) and a unique data set of 131 international firms from different continents, the authors identify and analyze the key determinants in the context of a firm’s service-oriented strategy.FindingsThe findings show that in order to cater for changes, organizations have to manage and adapt the coherence of the determinants’ business services, business processes and knowledge sharing continuously. Moreover, the results show that a service-oriented strategy is not only influenced by business services as such, but business services mediate the relationships between business processes, governance and process-aware information systems to a service-oriented strategy.Research limitations/implicationsA limitation is imposed by the limited sample size and the unbalanced response of participants (executive management). In future research, a more extensive survey among a broader group of participants will help the authors to develop their model further in order to generalize the results, as well as more finely grained research related to geography and size might be pursued. Future empirical research is necessary to identify and test the relationships between other constructs and study their effect on a firm’s service-oriented strategy.Practical implicationsOn a practical level, the authors postulate that an organization’s executive management should pay attention to invest in an organizational entity (department) that manages business services continuously. This organizational entity has to ensure that related processes and knowledge sharing are in place to establish and maintain a service-oriented strategy.Originality/valueThis research contributes to service-oriented literature by operationalizing the implementation of an organization’s service-oriented strategy. The authors’ insights go beyond the findings of Aier et al. (2011). The authors found that a service-oriented strategy influences service-oriented project success positively. The authors extended these findings, based on a unique data set, by studying business services and influencing determinants (i.e. business processes, governance, PAIS and knowledge sharing) within the context of service orientation. The renewed attention to the concept of service orientation provides insights into critical determinants that influence the implementation of a service-oriented strategy.
Highlights
Between 2005 and 2009, researchers paid ample attention to service orientation to improve internal business services by building these out of readily available building blocks (e.g. Cherbakov et al, 2005; Janssen and Joha, 2008; Aier et al, 2011)
We argue that organizations implement a service-oriented strategy that takes modularized business services into account across functional domains and geographical scope
An explanation may be found in the research of Aier et al (2011) in which governance and architecture and service design are perceived as indirect factors that influence service-oriented project success. This finding is confirmed in our research, as we found that business services functionality scale and scope fully mediate the relationships between business processes, governance and process-aware information systems (PAISs) to a service-oriented strategy
Summary
Between 2005 and 2009, researchers paid ample attention to service orientation to improve internal business services by building these out of readily available building blocks (e.g. Cherbakov et al, 2005; Janssen and Joha, 2008; Aier et al, 2011). By adopting a serviceoriented strategy, organizations create internal business services that are modular, accessible and interoperable (Fremantle et al, 2002) and utilize the possibility to reuse existing components of internal services in business processes (Demirkan et al, 2007). The focus of this paper is not on business-to-end-user services, whether these end users are consumers or other businesses, but on business services that are used to support organizations’ internal business processes, for example, Finance and Accounting (F&A), Human Resources (HR), Procurement or IT services. Research interest to study the concept of service orientation, for example, service architectures and reuse of existing components as, for instance, offered by shared service centers, decreased after 2009, as the concepts of adaptability and agility were considered to be a serious alternative to respond to changes (Conboy, 2009). For instance, that the 2021 market size of global Finance and Accounting business services will grow up to $30.4bn, while the compound annual growth rate (CAGR) for F&A business services is 6% (HfS: F&A market size and forecast 2017–2021)
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