Organizing for solutions: Systems seller vs. systems integrator

Abstract

This paper aims to examine how firms are organizing to provide integrated solutions: a business model for the supply of capital goods based on the provision of products and services as integrated solutions to an individual customer's needs. The industrial marketing literature suggests that the origins of this business model can be traced back to early 1960s when firms adopted strategies and organizations for 'systems selling'.The marketing literature helps us to identify two contrasting types of organizations:(1) the vertically-integrated systems seller that produces all the product and service components in a system; and (2) the systems integrator that coordinates integration of components supplied by external firms. The paper uses these two ideal types to analyse the strategies and organisations of five case study firms that have recently attempted to move into the provision of integrated solutions. It argues that there is no evidence to support the continuing dominance of the systems seller or a simple transition from systems selling to systems integration. A more complex pattern of organizational forms is emerging, combining elements of both systems selling (i.e. vertical integration into services) and systems integration.

What service transition? Rethinking established assumptions about manufacturers' service-led growth strategies

“…In line with Davies et al (2007), we argue that service-led growth strategies can be traced back to the early literature on so-called 'systems selling '. Mattson (1973, p. 108) defined systems selling as "a combination of products and services, a fulfillment of a more extended customer need than is the case in product selling" (p. 108); and, Hannaford (1976) referred to systems selling as product-service combinations designed to perform "a complete function for a buyer" 3 .…”

“…While some of the early solutions literature draws on system selling and the industrial marketing literature, many of the more recent studies (on system suppliers) fail to acknowledge and develop these earlier contextual and conceptual contributions (Davies et al, 2007;Nordin & Kowalkowski, 2010). A notable exception is Helander and Möller (2007), who argue that scholars need to integrate the discussion on relationships and networks with that on systems selling and service marketing.…”

“…The offering is use-oriented, relational, customized, and output-based (such as a promise to achieve availability). Availability providers no longer draw only on internal components and knowledge; rather, they integrate internally and externally supplied components, services and knowledge (Davies, et al, 2007;Helander & Möller, 2008). Hence, they pursue what Davies (2004) refers to as high-value systems integration.…”

“…Even though they did not expand this discussion further, it is closely related to more recent debates (Cova & Salle, 2008;Windahl & Lakemond, 2006;2010), linking solutions to the service marketing discourse of the Nordic School of Marketing and the emphasis on longterm relationships (Grönroos, 2011;Gummesson, 1994;Normann, 2001), and a servicedominant view on value (Vargo & Lusch, 2004). Arguably, system selling now extends beyond solving customers' operational problems to include more strategic forms of marketing, based on so-called 'solution selling' (Davies et al, 2007;Helander & Möller, 2008).…”

Differences in decision-making criteria towards the return on marketing investment: A project business perspective

“…Technical and service capabilities developed at the business level are more contentious. These investments are marketing-related in order to implement the marketing strategy (Davies et al, 2007). This provides the context in which project businesses allocate investments, taking into account a range of factors that influence the earning logic, profitability, and how this is perceived in relation to shareholder value.…”