The Concept and Effects of Service Modularity -- A Literature Review

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.