Service modularity in the digital era: integrating environmental sustainability and post-pandemic insights

Abstract

Purpose

This study aims to explore service modularity in the context of digital technology and environmental sustainability, particularly considering the transformative impacts of the post-pandemic world. It aims to shed light on how service modularity can adapt to and thrive in these evolving circumstances.

Design/methodology/approach

Using a comprehensive analytical approach, this paper addresses the critical concerns and limitations inherent in traditional service modularity concepts. It proposes novel perspectives on service modularity, enriched by recent technological advancements and sustainability imperatives.

Findings

The research reveals new dimensions of service modularity, emphasising its significance in the era of digital transformation and heightened environmental awareness. It provides empirical insights into how service modularity can be effectively reimagined and implemented in response to the challenges and opportunities arising from the COVID-19 pandemic.

Practical implications

The findings offer valuable guidance for organisations seeking to enhance their service delivery through modularity. The study underscores the importance of integrating digital innovation and sustainability principles into service design and execution in the post-pandemic era.

Originality/value

This paper makes a novel contribution to the field of service modularity by intertwining it with the realms of digital technology and environmental sustainability. It offers a unique perspective on adapting service modularity to contemporary challenges, thereby enriching the existing body of literature and providing a foundation for future research in this area.

Citation

Iman, N. (2024), "Service modularity in the digital era: integrating environmental sustainability and post-pandemic insights", International Journal of Quality and Service Sciences, Vol. 16 No. 4, pp. 457-477. https://doi.org/10.1108/IJQSS-05-2023-0061

1. Contextual background

Service provision, as Levitt (1972) insightfully observed, is at the core of all business operations. The increasing complexity and demand for replicability in services, as highlighted by Voss and Hsuan (2009), present a strategic paradox in the modern business landscape. This paradox has gained further prominence in the wake of the COVID-19 pandemic, which has not only altered organisational structures but also heightened the need for agility and resilience without compromising efficiency (e.g. Mandal et al., 2024; Queiroz et al., 2022; Sarkis et al., 2020; Srinivasan et al., 2020).

The COVID-19 pandemic has catalysed a re-evaluation of service structures, particularly in the dimensions of adaptability and responsiveness. Service modularity has become not just a strategic choice but a necessity in the post-pandemic era. It facilitates rapid adaptation to changing market conditions and consumer needs, which have become increasingly dynamic, due to the pandemic’s impact.

Another critical dimension of service modularity that has come to the forefront is environmental sustainability (cf. Sharma et al., 2023). The pandemic has underscored the need for sustainable business practices (Cheng et al., 2021). Service modularity can play a pivotal role in this regard by promoting the efficient utilisation of resources, reducing waste and enabling the easier adoption of sustainable practices (Sachs, 2012).

The integration of digital technology in service modularity is more relevant than ever, given that technological developments are accelerating and customer demand is becoming increasingly heterogeneous (Aristidou and Barrett, 2018; Sundbo et al., 2022). The accelerated digital transformation due to the pandemic provides an opportunity for services to be reimagined through technology (George et al., 2021). Digital tools and platforms can enhance the scalability, customisation and efficiency of modular services, aligning them with the increasingly digital-first preferences of consumers.

In light of these considerations, this paper seeks to redefine service modularity. The power of modularity in manufacturing, production, organisational and supply chain management is widely accepted (e.g. Baldwin and Clark, 2000). However, more research on modularity in the context of services remains necessary because this emerging field has not yet been thoroughly analysed and comprehensively developed (Iman, 2016; Iman and Liebenau, 2017). Moving beyond the traditional perspectives, this paper contends that service modularity, in the context of today’s challenges and opportunities, should be seen as a dynamic and flexible approach, deeply integrated with sustainability principles and digital technology (e.g. Sharma et al., 2023; Sturgeon, 2021; Thun et al., 2022).

We are currently looking at an essential phenomenon in service management and must realise that the tools at our disposable are useful but probably not perfect and do not provide everything we need. The COVID-19 pandemic reveals that services perhaps do not yet have the “right” modularity configuration. In fact, modularising services should enable any organisation to develop new service offerings in a more flexible and resilient manner, yet this is not always the case. Another criticism is that the current literature tends to be too naive and oversimplifies the vision of the “modular world.” This somewhat narrow view of modularity is something that we have to dispel so that service modularity can reveal its full potential.

Therefore, the central question addressed in this article is: does service modularity maintain its relevance in the post-COVID-19 era? By integrating the aspects of environmental sustainability and digital technology into the concept of service modularity, this study contributes to the strategic management and innovation discourse, offering a fresh perspective on a well-established concept in the face of new global challenges.

2. Approach and methodology

This study uses a systematic methodology to identify, analyse and synthesise the relevant academic and empirical sources (Schick-Makaroff et al., 2016) that inform our proposed definition of service modularity, especially in the context of digital technology, environmental sustainability and the post-pandemic landscape. The process began with a comprehensive literature search across multiple databases (Harari et al., 2020), including JSTOR, ScienceDirect, Google Scholar and Scopus, to ensure a wide range of academic sources. The search was tailored to include keywords such as “service modularity”, “digital technology in service”, “environmental sustainability in service” and “post-pandemic service strategies”. This search was supplemented by manual searches of key journals in the fields of service management, strategic management and innovation studies. Between 2021 and 2023, we found at least 126 articles to be scrutinised further.

The selection criteria for the sources included their relevance to the topic, the credibility of the publication, the impact factor of the journals and the citation count of the articles. This was done to ensure that the most authoritative and influential perspectives would be included in the analysis. This process reduced our survey sample to 56 articles. Once relevant sources were identified, a thematic analysis was conducted (Guest et al., 2011). This involved closely reading the selected articles, identifying recurring themes and arguments and noting variations in the definitions and applications of service modularity. The analysis paid special attention to how these sources addressed the integration of digital technology and environmental sustainability in service modularity, as well as adaptations in the post-pandemic context.

The articles can be categorised into five domains: information technology (IT), e-learning, logistics, healthcare and post-pandemic adaptations. Modularity in IT-enabled services, including cloud computing, Internet of Things (IoT) and embedded systems, is a common area of focus, reflecting the technological advancements driving service modularity. The impact of service modularity on e-learning programs, particularly in enhancing perceived usefulness and facilitating customisation, is also discussed. We also found evidence on the role of service modularity in logistics, particularly in the context of supply chain management and the physical internet (PI). The application of modularity in healthcare logistics and service delivery was also found. Finally, we found many articles on the adaptation of service modularity in response to the COVID-19 pandemic, demonstrating its role in enabling flexible and scalable service delivery in a remote and digital context.

To ground our definition in empirical reality, case studies and real-world examples from recent publications were examined (Gray, 2021). This provided insights into how theoretical concepts of service modularity were being applied in practice, especially in light of recent technological and environmental shifts and the COVID-19 pandemic. Our reliance on academic and empirical findings to shape our elaboration of service modularity brings several advantages, including a robust theoretical foundation and practical relevance. However, it also presents limitations. The fast-evolving nature of digital technology and environmental standards means that the most recent developments might not be fully captured in the academic literature, which often faces publication delays. In addition, the emphasis on high-impact and widely cited sources could overlook emerging but not yet widely recognised ideas in the field.

3. Review of past modularisation research

Modularity is a very important concept in operations, particularly in system design. In the modern world, according to the perspective of systems, organisational unit boundaries, firm boundaries and technological modules must be in line, a process known as mirroring (Baldwin and Clark, 2000). As a core idea in systems theory, modularity can be explained as:

[…] a very general set of principles for managing complexity. By breaking up a complex system into discrete pieces – which can then communicate with one another only through standardised interfaces within a standardised architecture – one can eliminate what would otherwise be an unmanageable spaghetti tangle of systemic interconnections (Langlois, 2002, p. 19).

The core idea of modularity is to break down a complex system into smaller modules that are more manageable and flexible (Simon, 1962). The new resulting system will be loosely coupled, which can then be integrated into other processes in various ways (Baldwin and Clark, 2000). The concept of modularity was initially developed by Alexander (1964) and Simon (1962, 1969). They did not explicitly call it “modularity”, but they defined how complex systems can be managed by decomposing them into smaller inter-related subsystems. They also distinguished between decomposable and non-decomposable systems and posited that no complex system would survive without adapting itself at the subsystem level. Both Alexander and Simon credited the idea of component selection to Ashby (1952).

Furthermore, the concept of modularity is applied in the production system by Starr (1965) and organisational coordination by Thompson (1967). Parnas (1972) then proposed the concept of “information hiding”, which is very important in the management of modules in systems. Four years later, Weick (1976) introduced into organisational studies the notion of “loose coupling” – the exchange and interaction concept that was originally applied to systems turned out to be applicable to social actors. Modularity has since been discussed in various modular structure settings, e.g. building construction, biology and medical science, cognitive science, languages, mathematics, software design and organisation theory.

The concept of modularity then developed rapidly in the 1990s along with the rise of modern technology. Scholars like Eric von Hippel (1990) introduced the idea of task partitioning for modular products. Meanwhile, Ulrich (1995) and Schilling (2000) also contributed to the development of decoupling interfaces and the concept of reconfigurability. Furthermore, Baldwin and Clark (1997, 2000) proposed a mirroring hypothesis. Looking at these dynamic complexities, complex systems can contain technical characteristics and organisational characteristics that can influence each other’s structure and performance (Langlois, 2002).

Since then, modularity has received much recent research attention in the field of product manufacturing and operations, institutionally manifested through several established research initiatives, and has become more mature (Iman, 2016; De Mattos et al., 2021; Thun et al., 2022). While modularity is clearly easier to use and implement in product manufacturing and operations, at the meso-level, many areas of business and organisation are impacted by modular principles. Clouding matters further, the COVID-19 pandemic, massive advancements in digital technology and growing pressures for environmental sustainability have undeniably affected service provision and delivery (Iman, 2023; Sturgeon, 2021).

For example, as can be seen in Figure 1, which was an output generated by scimeetr analysis packages in R, illustrates the interaction of various themes related to service modularity. The top rectangle focuses on the clustering and social network analysis aspects, emphasising modularity and its implications for adult and ageing populations. The middle-left rectangle addresses technological themes such as IoT, cloud computing and embedded systems, highlighting the need for interoperability. It is connected by an arrow to the central middle rectangle, suggesting that these technologies contribute to the modularity framework. On the other hand, the middle-right rectangle emphasises separation of concerns, business process execution language, adaptation and service-oriented architecture, suggesting a more technical and architectural perspective on service modularity. The arrow from the central middle rectangle flows into this right middle rectangle, indicating that the modularity and architectural flexibility concepts feed into these technical considerations.

Meanwhile, the bottom rectangle focuses on practical applications of service modularity, innovation and mass customisation, suggesting a more applied and case study-oriented approach. The arrow from the central middle rectangle points downwards to this block, indicating that the concepts of modularity, as defined in the central rectangle, are applied in innovative and customisable service contexts. Finally, the central block focuses directly on service modularity, linking it with cloud computing, web services, architecture and flexibility. Arrows from both the top and left-middle rectangles converge here, indicating that the social network analysis and IoT/cloud computing concepts influence this core area of modularity.

Overall, the figure outlines a progression from theoretical and technological foundations (the top and left rectangles) through a core modularity framework (the central middle rectangle), to technical architectural considerations (the right rectangle) and finally to practical applications in service innovation and customisation (the bottom rectangle). The arrows illustrate the flow and interaction of concepts, emphasising how foundational technologies and theories influence service modularity and its practical applications.

Thus, if we want to scrutinise the idea of service modularity today, we will need a critical-reflective engagement with the term – with both caution and a critical understanding, as well as discourse, of what it is and what it is not.

4. The development of early service modularity

Since the early 2010s, a number of scholars have tried to apply the concept of modularity to service settings (e.g. Avlonitis and Hsuan, 2017; Bask et al., 2010; Giannakis et al., 2018; Iman, 2016; Nätti et al., 2017; Pekkarinen and Ulkuniemi, 2008; Tuunanen and Cassab, 2011; Voss and Hsuan, 2009); however, we have found that the existing explanations are neither complete nor comprehensive. Even though several reviews have been conducted (e.g. Iman, 2016; Brax et al., 2017; De Mattos et al., 2021, among others), the number of publications in this emerging field is still relatively minuscule.

Figure 2 represents the values of the correlation matrix between different terms used in the literature on service modularity. The colour gradient on the right side of the figure indicates the scale of values: darker colours indicate higher values, and lighter colours represent lower values. The intersection between “service” and “modularity” shows a moderate density value, indicated by a light-to-moderate shade. The intersection between “service” and “service modularity” shows a slightly lower density, which is reflected by a lighter shade. Meanwhile, the intersection between “modularity” and “service modularity” exhibits a significantly higher density, marked by a darker shade of purple. This heatmap visually highlights that the integrated concept of service modularity is a more prevalent focus in the literature compared to the individual terms, reflecting an increasing interest and depth of research in understanding how modularity principles apply specifically to services.

Thus, the underlying assumption of such disconnectedness was that much research and thought have theoretical and empirical roots in product manufacturing and operations and might not be directly applicable to services (De Mattos et al., 2021). While the basic principles of module interface and decomposition logic provide a contextualised lens and have become part of the development agenda (Iman and Liebenau, 2017), we need to reconnect with both academic and empirical sources to rethink and reflect on the notion of service modularity and indeed to make it more relevant for theory and practice in general (Brax et al., 2017). In so doing, we have to reconsider the definition and terminology of the concept and critically reflect on its genesis.

Despite being studied in several service sectors, we must humbly admit that we know precious little about the application of modularity in service innovation (Iman, 2016). Theoretically speaking, the distinctive characteristics of products and services might result in different attributes that distinguish service provision from product generation (De Mattos et al., 2021; Sundbo et al., 2022; Voss and Hsuan, 2009). Other problematic issues most commonly associated with service modularity are interface standardisation, functionalities, packaging and the substitution and reusability of modules in the system (Pekkarinen and Ulkuniemi, 2008). Clouding matters further, due to its intangibility, the service production process is very complicated, not to say impossible, to store and thus has to be produced and consumed at the same time (Iman, 2016).

For example, modularity, modularisation and decomposability are related but distinct concepts commonly discussed in fields like systems design, manufacturing, software engineering and organisational theory. Understanding their differences is key to applying them effectively. Modularity is a characteristic and a property of a system, modularisation is the process of making a system more modular and decomposability is an analytical approach or the ability to break down a system for analysis and understanding (see Table 1). In summary, modularity and modularisation focus on creating and implementing systems with independent but interconnected components. Decomposability is about understanding and breaking down complex systems. Modularity leads to systems with interchangeable parts; modularisation results in transforming systems into a more modular structure; decomposability aids in understanding and managing complexity.

In the context of service modularity, “dynamic” refers to the inherent flexibility and adaptability of service modules in response to changing market conditions, customer needs and technological advancements. This dynamism allows for the rapid reconfiguration, scaling and customisation of services without overhauling the entire service system (Willemen et al., 2012). Specifically, in service modularity, a dynamic approach means that individual modules can be independently developed, modified, replaced or removed. This flexibility is crucial in adapting to evolving customer preferences or emerging market trends. For example, in a dynamically modular service system, a particular module can be upgraded to incorporate new digital technologies or to meet more stringent environmental standards, without the need to restructure the entire service offering. This dynamic nature is particularly relevant in the post-pandemic era, where businesses must be agile enough to respond to rapid and often unpredictable changes (e.g. Sundbo et al., 2022). This enables service providers to remain competitive and relevant, as they can swiftly adapt their service offerings to meet new challenges and opportunities, such as shifting towards more digital or sustainable service practices (Ruutu et al., 2017).

With regard to customer interaction, they have to be included in the production activities and become a service co-producer along with the service provider (Iman, 2018), with (Pekkarinen and Ulkuniemi, 2008) or without (Bask et al., 2010) them knowing that such processes incorporate their involvement. Nevertheless, both the service product and service process will merge in the final delivery (Van der Aa and Elfring, 2002). As a result, modular service design should take into account not only the technicalities of services but also human elements during the service production process (Meyer and DeTore, 2001; Voss and Hsuan, 2009). Contrary to modularity in product manufacturing or engineering, modularity in services will then have very different characteristics and require a different kind of institutional ecosystem.

To be able to exploit and integrate organisational resources, modularity in services will also require organisational capabilities and organisational architectures that support them. In particular, service modules and interfaces will define the way in which services are being developed and delivered (de Blok et al., 2010). In services, such interfaces will consist of both tangible and intangible attributes among people, processes, information and procedures and will be responsible for ensuring dynamic and mutual interaction among each other (Salvador, 2007). While module interfaces are generally standardised, they will be available in different forms (from physical to virtual) and on different levels (from process-driven to highly specialised) (Pekkarinen and Ulkuniemi, 2008; Tuunanen and Cassab, 2011).

Another apparent problem in service modularity is how to decompose service functionalities into smaller service components (Raddats, 2011). Some scholars argue that they should be packaged together from service components (Bask et al., 2010), while others posit that those functionalities should be as similar as possible within an individual service module (Hyötyläinen and Möller, 2007). Meanwhile, Tuunanen and Cassab (2011) argue that a service module is a mixture of service processes that will result in new customisable service packages – which will consist of the basic non-customised feature as well as customised service extensions. Nevertheless, service interfaces should be standardised and should enable the flow of information (Bohmann et al., 2003).

With the emergence of platformisation in business, modularisation is becoming multi-dimensional (Jacobides et al., 2018). Service modularisation, thus becoming very flexible, can increase or decrease according to the number of participating organisations, standards in the industry, as well as platform organisers (e.g. Iman, 2024). Modularisation helps in accommodating communication and information sharing within the system (Langlois, 2002) and helps other participating organisations (modules) to attain full compatibility in the platform (Baldwin and Clark, 2000). Even in a situation where a firm has no competitive advantage and limited experience, modular structure will encourage the firm to contribute to the larger part of industry output (Sturgeon, 2021).

5. Recent studies on service modularity

The concept of service modularity has gained significant attention in recent years, as organisations strive to balance the need for customisation with standardisation to improve efficiency and effectiveness. During and after the recent pandemic, service modularity has emerged as a promising solution to the challenge of balancing customisation and standardisation in various industries, including e-learning, healthcare, information technology-enabled services (ITeS) and service-oriented systems (e.g. Sundbo et al., 2022). The following review aims to synthesise key findings from recent studies that explore modularity in different domains, focusing on its facilitators, impact on complexity and potential for customisation and value creation.

For instance, Pohjosenperä et al. (2019) examined modularity in healthcare logistics, identifying key components and a growing interest in adopting modular and standardised solutions. Poeppelbuss and Lubarski (2019) introduced the modularity canvas, while Boukharata et al. (2019) presented WSIRem, which improves web service interface modularity by using multi-objective optimisation. Skačkauskienė and Vestertė (2019) delved into the service delivery process, while Garmendia et al. (2019) proposed patterns for extending modelling languages with modularity services.

Not too long ago, De Mattos et al. (2021) performed a literature review, noting a lack of consensus on service module definitions and a scarcity of methods for supporting testing and interface definition phases. Skačkauskienė and Vestertė (2021) tackled the challenge of balancing customisation and standardisation, while Sternberg and Denizel (2021) analysed the PI in relation to container repositioning. On the other hand, Pengcheng et al. (2021) found that organisational modularisation positively affects service innovation performance, while Wehner et al. (2021) explored the connection between logistics service modularity and sustainable development. Schwede et al. (2022) presented the impact model of modular product families and Zhou et al. (2022) proposed a hierarchical joint optimisation model for personalised service product family design.

Accordingly, Thun et al. (2022) investigated digitisation’s effects on industry organisation and global-scale modular ecosystems. Furthermore, Yan et al. (2022) examined platform-based servitisation on system complexity and adaptability, while Yan et al. (2022) investigated machine learning, modularity and supply chain integration for achieving “branding 4.0” standards. Hietanen (2022) investigated service-dominant logic and modularisation, while Jochemsen et al. (2022) explored the relationship between modularisation and information system complexity.

Concomitantly, Ezzat et al. (2022) proposed a clustering approach for modularising service-oriented systems, while Sorkun et al. (2022) investigated service modularity’s effects on e-learning program perceived usefulness. Peters et al. (2022) explored modularity in complex service processes, and Zou et al. (2022) presented ISO standardisation work for service robot modularity. Tuunanen et al. (2023) explored modular service design of IT-enabled services. Finally, Rodríguez-Escudero et al. (2023) analysed customisation profitability drivers, while Srivastavaa (2023) explored modularity facilitators in healthcare services. Peters and Richter (2023) aimed to individualise patient pathways through modularisation, providing design knowledge for healthcare service modularisation.

Selected studies in Table 2 above clearly show that in recent years, the concept of modularity not only remains relevant during and after the pandemic but has also gained significant attention in various fields, including organisational design, product development, service innovation and branding. The reviewed literature highlights the importance of service modularity in various contexts, offering insights into how service modularity can improve the efficiency and effectiveness of service delivery, customisation and standardisation. These findings may be valuable for researchers, practitioners and policymakers seeking to better understand and implement service modularity in their respective fields.

6. Service modularity post-COVID-19 pandemic

From the very beginning, the idea of service modularity posits that services can be designed, delivered and consumed in distinct yet interoperable units or modules, which can be combined in different ways to create customised offerings (Bask et al., 2011). Digital technology plays a pivotal role in facilitating service modularity by enabling the seamless integration, configuration and reconfiguration of modules through standardised interfaces, thereby improving efficiency and reducing costs (Sturgeon, 2021; Vargo and Lusch, 2016). Moreover, service modularity contributes to environmental sustainability by optimising resource usage, minimising waste and promoting circular economy principles (Tukker, 2015). By breaking down services into smaller, reusable components, organisations can streamline their operations, reduce their carbon footprint and foster more sustainable business practices (Iman, 2023).

The COVID-19 pandemic has had significant impacts on various aspects of business and society, leading to unprecedented challenges and opportunities (Albarracin and Jung, 2021). Drawing upon the previous section, it is essential to explore the implications of service modularity after the pandemic and reveal how it has adapted to the changing landscape. First of all, with the pandemic forcing businesses to shift towards remote work and digital solutions, the demand for modular services has surged. Service providers have had to quickly adapt their offerings to meet the needs of customers who are increasingly reliant on digital channels (Sturgeon, 2021). Service modularity has played a vital role in enabling companies to rapidly reconfigure and deliver services in a remote and digital context, offering flexibility and scalability (de Vries, 2020).

With regard to supply chain resilience, the pandemic has exposed vulnerabilities in global supply chains, leading to disruptions and delays (Alsmairat et al., 2024; Ivanov, 2022). Service modularity can help businesses build more resilient and agile supply chains by enabling them to quickly adapt to changes in demand or disruptions in supply. By breaking down services into smaller, interoperable modules, companies can better manage risks and uncertainties, such as those presented by the pandemic, and respond more effectively to market fluctuations (Queiroz et al., 2022). This is further elaborated in Table 3.

Because the pandemic brought environmental and social concerns to the forefront, businesses are increasingly focusing on sustainability and the circular economy (Bocken et al., 2021). Service modularity can contribute to these goals by promoting resource efficiency, waste reduction and the reuse of service components. Moreover, the shift towards digital services and remote work has the potential to reduce the carbon emissions and resource consumption associated with physical infrastructure and transportation (Sarkis et al., 2020). Thus, the post-pandemic landscape has created new opportunities for innovation in service delivery and customer experiences. Service modularity can facilitate rapid experimentation and customisation, enabling businesses to develop and test new services and business models in response to evolving customer needs and preferences (Gebauer et al., 2021).

Unarguably, after the pandemic, there is an increased demand for digital services. Service providers need to be agile and responsive to these changing needs while considering their environmental impact (Srinivasan et al., 2020). Using artificial intelligence (AI), IoT and cloud computing can help in creating more sustainable service models. For instance, AI can optimise resource use and reduce waste, while IoT can monitor environmental impacts in real time. Consequently, services must be designed to be resilient to disruptions. The pandemic showed the importance of having services that can pivot quickly in response to global events. This includes having a digital infrastructure that supports remote access and operation (Tuunanen et al., 2023).

Indeed, there will always be a challenge in balancing economic goals with environmental sustainability (Iman, 2023). Services must be cost-effective to remain competitive, but also environmentally conscious to meet increasing regulatory and consumer demands for sustainability. Effective integration of these concepts requires collaboration across industries and supportive policies from governments. Policies could incentivise sustainable practices and investments in digital infrastructure (e.g. Sturgeon, 2021). All in all, service modularity in the digital era, especially when considering environmental sustainability and post-pandemic insights, is about creating services that are not only technologically advanced and customer-centric but also resilient and environmentally responsible.

However, this is perhaps something easier said than done. First, while key facilitators of modularity, such as resource availability, expertise and relationship investment, contribute to the successful implementation of modular systems, the shifting nature of structural complexity and the need for more research on the application of modularity in service-oriented systems remain problematic (cf. Langlois, 2023). Second, while the literature reviewed provides valuable insights into different dimensions of service modularity, including the benefits and challenges of implementing modular approaches in various contexts, we still have to resolve the lack of consensus on the definition of service modules, further develop methods and tools for service modularisation and address the risks associated with modularisation. Finally, modularisation is now seen as a crucial factor in improving service innovation performance, economic targets, personalised service product design, industry organisation and branding. This obviously requires a different logic than we used to have beforehand.

Here we discuss and reflect on the interpretive and critical approach of past modularisation research. This outline can serve as a brief road map to service modularisation research, but more importantly, portray the differences between modularity in the pre- and post-pandemic periods. In conclusion, the numerous critiques presented above have highlighted various aspects of service modularity that warrant further examination, such as stakeholder perspectives, regulatory and legal factors, cultural dimensions, ethical considerations and the role of service ecosystems, among others. By addressing these critiques, future discussions and research on service modularity can provide a more comprehensive and nuanced understanding of the subject, ultimately enabling organisations to better harness the potential of service modularity in a rapidly changing and increasingly complex business environment.

7. Concluding remarks

Service modularity is a significant concept in the modern business landscape, offering numerous benefits in areas such as digital technology and environmental sustainability (Iman, 2023). However, it is essential to critically examine its potential challenges, limitations and implications on various aspects of business. By considering alternative perspectives, providing constructive suggestions and incorporating real-world examples, the discussion surrounding service modularity can be enriched and lead to a more comprehensive understanding of the subject (Langlois, 2023).

The role of modularity in service settings is becoming quite prevalent. The post-COVID-19 pandemic landscape has presented both challenges and opportunities for service modularity (Thun et al., 2022). By leveraging the flexibility and adaptability of modular services, companies can capitalise on emerging trends and opportunities in the post-pandemic era. Businesses can harness the potential of service modularity to navigate the evolving business environment, foster sustainability and drive innovation. Thus, a more holistic approach to service modularity research can complement and enrich existing theory and practice in operations management.

The question of whether services remain relevant after the COVID-19 pandemic is perhaps rhetorical. Instead, we should shift our discussion towards various relevant research streams which may link with service modularity. This is essential to help us develop and test the theory of service modularity. More importantly, we need to integrate modularity into the services agenda, particularly in non-knowledge-intensive and non-technology-intensive service sectors, as many organisations actively seek to streamline their operations and increase flexibility and profitability within their business activities. These areas will need more empirical analysis and scholarly engagement.

In light of the discussion on service modularity and its implications in the post-COVID-19 pandemic landscape, future research should proceed in the following directions:

• Investigate the long-term impacts of the pandemic on the adoption and implementation of service modularity, particularly in industries that have been significantly disrupted or transformed by the crisis.

• Examine the relationship between service modularity and environmental sustainability more critically, exploring potential trade-offs and limitations, as well as best practices for designing and managing modular systems to minimise their environmental impact.

• Provide concrete examples and case studies to illustrate the implications of service modularity on various aspects of business, such as customer satisfaction, employee engagement and competitiveness, to facilitate a more comprehensive understanding of the post-pandemic business environment.

• Explore the relationship between service modularity and emerging technologies, such as AI, blockchain and IoT, to understand how they can be leveraged to enhance the benefits and overcome the challenges associated with modular services.

• Develop frameworks and best practices for implementing service modularity in diverse organisational contexts, considering factors such as culture, leadership and capabilities.

By addressing these recommendations, future research can contribute to a more nuanced and holistic understanding of service modularity and its implications for businesses, technology and the environment. By critically examining its potential challenges and limitations and by considering the unique context of the post-COVID-19 pandemic landscape, researchers and practitioners can better understand how to harness the potential of service modularity to drive innovation, resilience and growth in the face of unprecedented change.

The findings of this study have significant implications for policymakers and practitioners in the field of service management and design. First, the integration of digital technology and service modularity calls for policies that support digital infrastructure development and promote digital literacy among service providers. Policymakers should consider facilitating access to digital tools and platforms that can enhance service modularity and efficiency. Second, the emphasis on environmental sustainability in service modularity underscores the need for policies that encourage sustainable practices in service design and delivery. This includes incentivising the adoption of green technologies and sustainable materials in service processes. In addition, the study highlights the importance of considering the post-pandemic landscape in service design, suggesting that policies should be flexible and adaptable to accommodate the changing needs and behaviours of consumers in a post-pandemic world. Overall, the study advocates for a policy framework that fosters innovation in service modularity while ensuring sustainability and adaptability to future challenges.

This study, while comprehensive in its approach to exploring service modularity in the context of digital technology and environmental sustainability, is subject to several limitations. First, the theoretical framework and analysis primarily focus on service modularity in specific industries, which may limit the generalisability of the findings across various sectors. In addition, the empirical data used in the study are derived from a select number of case studies and may not fully represent the diverse range of service industries. Furthermore, while the paper considers the post-pandemic era, the long-term impacts and evolving nature of the COVID-19 pandemic are still unfolding, which could affect the relevance and applicability of the findings over time. Future research could address these limitations by incorporating a wider array of industries, employing a more diverse set of data sources and continuously updating the analysis to reflect the changing landscape of service modularity in the digital and sustainability-oriented world.

All in all, modularity itself is a dynamic concept. Thus, both the theory and practice of service modularisation are manifold and dynamic. We need to advance and integrate them in both scholarly and empirical work and not try to focus only on a certain point in time nor a particular industry per se. Similarly, service modularity needs to include the macrostructure as well as the microstructure of service organisations at the same time so that one perspective will feed back into the other. It is also not a static but rather a multi-faceted dynamic concept. As technology progresses and context changes, our understanding of modularity progresses and the interpretation of such practices advances – a very modular pursuit indeed.

Figures

Figure 1.

Review on current research of service modularity

Figure 2.

Density of literature on service modularity

Table 1.

Distinction between modularity, modularisation and decomposability

Attributes	Modularity	Modularisation	Decomposability
Definition	Modularity refers to the degree to which a system’s components can be separated and recombined. It highlights the extent to which a system is made up of discrete modules that can function independently (e.g. Bartels et al., 2021; Garmendia et al., 2019; Prakash, 2022; Schilling, 2000)	Modularisation is the process of dividing a system into modules. It involves creating a modular structure by identifying and separating distinct functional components (e.g. Baldwin and Clark, 2000; Ezzat et al., 2022; Gremyr et al., 2019)	Decomposability refers to the ability to break down a system into its constituent parts or elements. It is about understanding how a complex system can be decomposed into smaller, more manageable components (e.g. Alexander, 1964; Parnas, 1972)
Characteristics	In a modular system, each module performs a distinct function and interacts with other modules through well-defined interfaces. Modularity allows for flexibility, adaptability and ease of upgrading and maintenance	Unlike modularity, which is more about the characteristic of a system, modularisation is an action or strategy. It is about applying the principle of modularity to a system that may not have been initially designed as modular	Decomposability is often used in the analysis phase of system design, helping designers understand the structure and functionality of a complex system
Applications	Modularity is common in product design (like electronics), software development (where different functionalities are developed as separate modules) and organisational structures (where different departments function independently but are interconnected)	Modularisation can be seen in industries undergoing transformation, like automotive manufacturing adopting modular design principles, or software projects transitioning from monolithic to microservices architecture	Decomposability is essential in systems engineering, software design (breaking down software into smaller units for understanding or refactoring) and organisational analysis (understanding how different functions and roles within an organisation relate to each other)

Source: Author’s own work

Table 2.

Extant studies related to service modularity

Author(s)	Findings
Pohjosenperä et al. (2019)	The authors examine how modularity is used for enabling value creation in managing healthcare logistics services and propose seven modularity components for healthcare logistics management: segmentation, categorisation and unitisation of offerings, differentiation and decoupling of processes and centralisation and specialisation of organisations
de Mattos et al. (2021)	The researchers demonstrate that most service modularity literature is still based on a product modularity theoretical background and that there is a lack of methods and tools to support the testing and interface definition phases of service modularisation
Skačkauskienė and Vestertė (2021)	The authors address the paradox of service customisation and standardisation that service providers face when planning for service delivery modularisation and answer the question of what the essence of applying modular design principles to service delivery is
Poeppelbuss and Lubarski (2019)	These authors develop the modularity canvas – a generic framework for the structured information capturing and identification of potentials for advancing towards a modular service architecture
Wehner et al. (2021)	Service modularity contributes to sustainable development through means of energy efficiency. This study is one of the first to use service blueprinting to analyse logistics service modularity, providing a methodological contribution to that field in general and logistics in particular
Skačkauskienė and Vestertė (2019)	The study approaches the modularisation of the service delivery process considering the customer and service provider perspectives and fills a gap in the literature on service modularisation management
Sternberg and Denizel (2021)	The authors advance WSIRem as a novel approach based on a multi-objective search-based optimisation method to find the appropriate modularisation of a service interface into smaller, more cohesive and loosely coupled interfaces, each implementing a distinct abstraction
Bartels et al. (2021)	This study shows that service modularity can contribute to individualised, holistic care provision and can benefit person-centred care
Sorkun et al. (2022)	The authors demonstrate that standardised interfaces across course modules increase the perceived usefulness of e-learning programs by improving ease of use
Tuunanen et al. (2023)	The authors apply design principles to address information-technology-enabled services (ITeS) modularisation and revitalise the service modularisation literature
Vestertė and Skačkauskienė (2022)	The researchers show how qualitative evaluation can be an alternative for calculating modularity indices in the field of service modularity
Gremyr et al. (2019)	The authors show how service module characteristics change in different ways depending on the service modularisation processes used
Prakash (2022)	This study shows that professional competence, technological versatility, a clear division of tasks, a channelled flow of information and professional autonomy act as enablers that may drive modular healthcare delivery in healthcare organisations
Ponsignon et al. (2021)	According to these authors, a modular service delivery system comprises three types of processes that collectively deliver modular offerings
Rajala et al. (2019)	These scholars show how a solution provider can develop operational capabilities to integrate the core and peripheral components into the solution and orchestrate the modular production system

Source: Author’s own work

Table 3.

Service modularity comparison

Core elements	Pre-pandemic	Post-Pandemic	References
Service modularity implementation	Service modularity, aided by globalisation and technological innovation, allows for the rapid reconfiguration of services to meet changing demands	The pandemic accelerated the digital transformation across various sectors, making service modularity more relevant	Mandal et al. (2024); Tuunanen et al. (2023)
Service modularity adoption	The adoption of service modularity was more gradual and selective. Businesses implemented modular services primarily for efficiency and cost-effectiveness, rather than as a response to a crisis	Increasing adaptability was crucial during the pandemic for businesses to continue operations remotely or to pivot their services	Mandal et al. (2024); Thun et al. (2022)
Focus and emphasis	The emphasis was on improving operational efficiency, scaling services according to demand and exploring new market opportunities. The changes were often strategic and long-term in nature	The focus shifted to rapidly adapting services to meet immediate needs, such as moving to remote work models, digitising customer interactions and altering supply chains. Resilience and flexibility became key	Peters et al. (2022); Vestertė and Skačkauskienė (2022); Zhou et al. (2022)
Digital transformation	The digital transformation was underway, but the pace was slower. Many companies were still in the early stages of integrating digital technologies into their service models	The pandemic significantly accelerated digital transformation. Businesses had to quickly adapt to digital tools and platforms to maintain operations, often implementing changes that would have otherwise taken years	Peters and Richter (2023); Sturgeon (2021); Yan et al. (2022)
Digital divide	Integrating digital technologies into existing service structures was relatively gradual and seamless	The digital divide became more apparent, with those without access to technology or digital literacy being left behind	George et al. (2021); Iman (2023)
Impact on privacy and security	With increased digitalisation, cybersecurity sometimes became a concern	Over-reliance on digital technologies raises more concerns about data privacy and security	Jochemsen et al. (2022); Thun et al. (2022)
Carbon emissions	The digital sector’s energy consumption became an issue. Efforts to use renewable energy sources and improve energy efficiency were emerging	Digital technologies, while reducing the need for physical resources in some cases, also contribute significantly to carbon emissions (data centres, increased internet usage)	Alsmairat et al. (2024); George et al. (2021)
Example	Before the pandemic, telemedicine was already in use, albeit less extensively. It involved remote consultations via video calls, allowing patients to receive medical advice without physically visiting a clinic or hospital	After the pandemic, the healthcare sector rapidly shifted to telemedicine, demonstrating how modular service design, supported by digital platforms, can effectively respond to crisis situations. The full potential of modular services was further realised after the pandemic

Source: Author’s own work