The principle of modularity is well established in product development and software engineering. In recent years, this principle has been extended to services in different industries, such as financial services, hospital, logistics, IT, or health care. Service providers apply the principle of modularity to achieve reductions in time and cost of delivering customized services. Service modularity is thus a key concept for a service-oriented perspective of the enterprise but research is still in an early stage. This paper reviews the extant literature to show commonalities and differences between different conceptualizations of service modularity. The review also shows that service modularity is associated conceptually with a wide range of effects on different performance criteria of services. Few of these effects, however, are validated empirically. Based on these findings, the paper identifies implications for future research.

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Modularity is a key principle for the design of a variety of systems, such as products, software, organisations, and, as of late, services. Service research has adopted the concepts of service modularity and service architecture to identify novel ways for achieving various effects, i.e. efficiently meeting heterogeneous demand. In order to advance research on service modularity, we argue that researchers need to be clear about key concepts, such as a characterisation of service modularity and its related effects. Thus, this paper presents findings from a comprehensive and comparative review of extant measurements of modularity and its related effects in key areas of application of the modularity principle, such as networked organisations, product and software development, and services. By surveying extant knowledge on service modularity vs. other contexts, we develop propositions for future research on service modularity.

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