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THE BUSINESS OF SYSTEMS INTEGRATION

Edited by Andrea Prencipe, Andrew Davies and Michael Hobday
SPRU, University of Sussex
E-mail: a.prencipe@sussex.ac.uk

The book can now be ordered online at the following websites:

Amazon.co.uk
Amazon.com
The Oxford University Press

In the past decade or so, systems integration has become a key factor in the operations, strategy and competitive advantage of major corporations in a wide variety of sectors (e.g. computing, automotive, telecommunications, military systems and aerospace). In the past, systems integration was confined to a technical, operations task - part of the wider area of systems engineering. Today, systems integration is a strategic task that pervades business management not only at the technical level but also at the management and strategic levels. This book shows how and why this new kind of systems integration has evolved into an emerging model of industrial organisation whereby firms and groups of firms join together different types of knowledge, skill and activity, as well as hardware, software, and human resources to produce new products for the marketplace.
Systems integration has 'two faces' similar to the two faces of R&D highlighted by Cohen and Levinthal (1989). The first face refers to the internal activities of firms as they integrate the inputs needed to produce new products. The second face, which has assumed much greater importance in recent years, refers to the external activities of firms as they integrate components, skills and knowledge from other firms, including suppliers, users and partners, in order to deliver ever more complex products and systems. Both 'faces' of systems integration go well beyond the engineering level, having become central to the strategies and competitive advantages of General Electric, IBM, Hewlett-Packard, Cable & Wireless, Siemens, Nokia, Boeing and many other of the world's leading corporations.

The business of systems integration has fundamental implications for the capabilities of firms. In many cases, firms have made a transition from being vertically integrated - doing nearly everything in-house - to being the integrator of somebody else's activities. These changes, while building on trends of the past, have accelerated in recent years, posing new challenges not only to prime contractors and major systems integrators, but also to their networks of suppliers and partners in production and innovation.

The drivers of business systems integration are many. They include the increasing complexity of products and systems, the rapid pace of technological change, as well as the increasing breadth of knowledge required to manufacture and deliver both consumer and capital goods. Also, using 'modular' design strategies, firms operating in a large number of industrial sectors have begun to make extensive use of outsourcing to lower-tier suppliers so that they can move 'downstream' to provide more lucrative services and solutions for their customers. Underlying this trend are continuing changes in the competitive environment, including the liberalisation and de-regulation of markets, globalisation and constantly changing customer demands.

This book, the first to systematically explore the re-invention of systems integration from a business and innovation perspective, is based on contributions from leading international scholars. The book delves deeply into the nature, dimensions and dynamics of the new systems integration, deploying research and analytical techniques from a wide variety of disciplines including, the theory of the firm, the history of technology, industrial organisation, regional studies, strategic management and innovation studies. This wealth of research capability provides deep insights into the new model of systems integration and supports this with an abundance of empirical evidence.

There is no published academic work that provides a theoretical/analytical/empirical grounding for the new systems integration. This edited collection is therefore unique. The book draws on and presents different perspectives on the evolution of systems integration. In particular, it takes an interdisciplinary approach to broaden and deepen the understanding of the systems integration issue, utilising evidence from Europe, the US and Japan.

The book is organised in three main parts. The first part focuses on the history of systems integration. Contributors trace the early history of systems integration using different industrial examples. The second part presents theoretical and analytical aspects of systems integration. Contributions concentrate on the regulatory and cognitive features of systems integration, the relationships between systems integration and regional competitive advantage, and the way in which systems integration supports the competitive advantage of firms. The third part takes industry and firm-level approaches. Contributions focus on different sectors and highlight the specificity of systems integration in various industrial domains, stressing the importance of systems integration for complex capital goods, such as aircraft and telecommunications equipment, as well as consumer goods, such as personal computers and automobiles.