Implementing International Services

Either ambition or anxiety makes executives of successful service providers worry about the internationalization of services. The ambitious see the opportunity to reach out to new markets for their services, follow the globalizing moves of their customers, and make their offerings more competitive by sourcing services from an international pool of suppliers. The anxious may be forced to do the same, albeit for a different motive. Saturated home markets, demanding customers operating on a global scale, and limited supply of talents in domestic markets make the internationalization for these firms a necessity rather than an option.

Various kinds of services account for approximately 30-35 per cent of world trade. Internationalization of service companies is consequently an important research field, yet there are very few published studies on the subject. In this chapter, we present results from a study of ten Scandinavian service companies representing different industries such as instance insurance, security, and consulting companies.

The internationalization of services is often not an option but a necessity for providers of services (Lommelen/Matthyssens, 2004). Particularly, customers with global business operations require their service providers to ‘follow’ them into new international markets or bid for service contracts on an international scale. Some customers also manage their service providers on an international scale, demanding of their providers to implement the same management processes and meet the same performance standards across all countries (Javalgi/ Martin, 2007).

The market assessment method (see chapter B.4) was developed based on practical implications of foreign direct investment as well as theoretical assumptions concerning the choice of an international location.

Reference models are focal research objects in the Information Systems discipline. The overall goal of reference modeling in IS research is to capture and publish knowledge on how to design and structure artifacts, e.g., information systems or business processes (Becker et al., 2004). The technique of reference modeling has been adopted by companies in many industries (e.g., Software, Health, Banking) to denote good practices for designing business processes or application systems (Fettke/Loos, 2004; Becker et al., 2002). While extant research predominantly focuses on constructing reference models for industries (Becker/Schütte, 2004; Neumann, 2003) and IS domains (Ahlemann/Riempp, 2008), in this chapter we explore the benefits of constructing services as reference models.

In this book, process modeling with SeeMe (see chapter B.1) and participatory process design with the Socio-Technical Walkthrough (STWT, see chapter B.2) are presented as methods for international service planning and implementation. These methods were used in three case studies to capture the complex interdependencies present in international process landscapes, and to elicit and cope with the special characteristics of these processes. In the case studies, we often encountered situations in which different stakeholders had different perspectives of the processes they were involved with in mind. Additionally, often there was no common artifact they could relate to for discussing service processes. Hence, stakeholders found it hard to adapt processes to properties of clients and locations. Both SeeMe and the STWT were found to diminish these problems.

This chapter addresses the problem of transforming custom IT solutions into reusable and standardized IT services. Marketing research shows that solutions create high value for the customer by meeting individual technical, organizational, and relational needs (Tuli et al., 2007). However, research also shows that delivering profitable solutions requires service providers to realize greater productivity through standardization of IT services at the same time (Galbraith, 2002).

The principle of modularization has been widely implemented in industrial production over the last 100 years (Sanchez/Mahoney, 1996, 67). Even complex services are increasingly being offered in modular conception. The focus of this article is the question of the specific advantages and disadvantages of modularly designed services. The analysis will be carried out using an economic approach from the field of management studies, namely the resource based view of the firm.

Continued internationalization of production and distribution of goods, as well as the developing international division of labor, is accompanied by a clear increase in logistics processes. The economic importance of the logistic services industry is highlighted, among other things, by the fact that it was not only a key employer in 2004, accounting for around 2 million employees, but was an important driver of sales in the German economy, with a revenue volume of €67 billion. The core attributes of this industry are, on the one hand, the considerable trend towards concentration, and, on the one hand, the prevalent dominance of small and medium enterprises, or SMEs.

The complexity and dynamics of ecological and economical challenges in the context of global labor division for production and service performance cannot be met by standard solutions. Design activities are required which offer new, creative ways to look upon the problems, from different perspectives, and with the aim of providing new choices for products, services and processes. Therefore, creativity is needed (Herrmann, 2009).

The increasing dominance of the service sector (OECD, 2005) further amplifies the need for traditional physical goods suppliers to develop and provide integrated value bundles for their customers. Often, the value of such an integrated solution – consisting of product and service components – is (perceived) higher than the added value of the separate product and service components. From the customer's point of view outcomes of value bundles can be tangible and/or intangible (Vargo/Lusch, 2004). While customers are supposed to perceive the delivered value proposition as an inseparable solution, manufacturers and service providers need to coordinate their distinct products, services, business processes, and resources in order to effectively and efficiently deliver an integrated value proposition. Therefore, service systems require executing traditional manufacturing processes, which aim at providing physical goods of value for customers, as well as service processes, which due to their very nature are conducted in cooperation with the customer (Sampson/Froehle, 2006; Fitzsimmons/ Fitzsimmons, 2001; Tuli et al., 2007).

The category “knowledge potential development” encompasses the process of practical implementation of arising technical ideas, their material use as a category in new technologies and techniques, and their use for the achievement of social and public benefits by obtaining maximum profits. In other words, it means that PIA → 0.

Nowadays, car manufacturing is the integrating sector. Its development generates the constantly growing demand for production in other industrial branches and sets very high technological requirements to this production.