Service Process Modularization: Reuse Versus Variation in Service Extensions

In this study, the authors integrate software engineering insights with research on service process design and product extensions to propose the concept of service process modularization and examine its influence on customer trial of service innovations. The authors conduct two experimental studies to investigate customer response to modular reuse and modular variation of service encounter processes in new offerings. Results of the studies show that modularization increases both the perceived utility of an enhanced offering and the likelihood of trial for service extensions. The effect of modular reuse versus variation, however, is contingent on the task complexity of the base service. Furthermore, expert customers prefer combined offerings that reuse familiar service processes, suggesting that practical considerations rather than variety are the main drivers of service utility and likelihood of trial. An important implication for managers and designers is the strategic use of service process modularization to initiate new service development and manage customer fit in new service extensions.