The Effect of Service Modularity on Flexibility in the Digital Age – An Investigation in the B2B Context

The goal of this study is to investigate the moderating role of digitalization on the well-known positive effect of service modularity on service flexibility. This is important since research findings on the role of service digitalization in this context are scarce and still equivocal. Following research on digital business strategy, we propose and provide empirical evidence that service digitalization positively moderates the effect of service modularization on service flexibility. By doing this, we furthermore enhance this research by considering service digitalization as a continuum ranging from low (i.e., services mainly provided by personnel) to high (i.e., services mainly provided by IT). In addition, we show that service flexibility has a positive effect on service value which is an important factor for firms’ market success. Hereby we aim to contribute to research on service modularization and technology management. Our research is based on survey-data of 147 companies offering IT services in the B2B context and is analyzed using the partial least square method.