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Part 3 - Competitive Advantage and Systems Integration

Chapter 16: Integrated solutions: a key systems integration challenge - Andrew Davies (SPRU, University of Sussex, UK)

Some of the world's leading companies are changing the strategic focus of their activities and following a similar path to success. Increasingly firms compete by selling complex products and services as 'integrated solutions' that address the needs of large business or government-owned customers. This is not a new type of activity. IBM has been offering data processing and computers as integrated solutions since the 1950s. By the 1990s all the leading suppliers of IT were providing integrated solutions to solve their customer's IT problems. What is new, however, is that by the late 1990s the provision of integrated solutions was no longer confined to IT. The trend has since spread from high-technology sectors, such as IT and telecoms, to more traditional engineering sectors such as railways, aerospace and construction. This chapter draws upon in-depth case study research of five companies operating across a range sectors - mobile systems, corporate telecom networks, flight simulators, railways and the built environment - which have recently faced the challenge of moving into integrated solutions provision. It presents these empirical findings within a conceptual framework which examines how the firms are changing the strategic focus of their activities, adapting to new positions in the value chain, and developing new sets of capabilities. To provide products and services as integrated solutions, firms are building core 'systems integration' capabilities to provide world-class products with equipment sourced from different vendors, and moving into the provision of 'services' to maintain, finance and operate a product throughout its life cycle.

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