Background and origin of the concept of service solution

The origin of the service solution concept can be traced to the early 1960s, with firms pursuing “systems selling” strategies (Mattson 1973; Hannaford 1976; Page and Siemplenski 1983; Dunn and Thomas 1986). According to Davies et al. (2007), system selling refers to the provision of products and services, where integrated systems assist business customers to operate their business. However, system selling appears to have evolved into solution selling, which represents a marketing strategy emphasising a move towards providing more complex solutions to help customer solve their business problems (Azimont et al.1998).

Over time, it has become more widely acknowledged by academics and practitioners that customers are demanding more effective solutions that solve their complex business problems (Jaakkola and Hakanen 2013; Biggemann et al. 2013; Davies et al. 2007). As a result of changes in customers’ demands, solution providers2 have increasingly sought to offer integrated solutions that solve customers’ business problem more comprehensively (Ferreira et al. 2013; Pawar et al. 2009; Davies et al. 2007; Cova and Salle 2007). This approach allows them to differentiate themselves in the market and improve their performance (Ferreira et al. 2013; Eggert et al. 2014 and 2011; Matthyssens and Vandenbempt 2008). An integrated solution is seen in the literature as the vertical integration in a network constituted by suppliers (e.g., PSFs)

2

The term solution provider refers to manufacturers as well as PSFs. In the literature some researchers refer to solution providers as manufacturers transitioning to services, while others refer to PSFs. However, they are different entities.

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and customers, where the supplier provides services to support its products during the product life cycle (Ceci and Prencipe 2008; Davies et al. 2007). In this sense, researchers believe that customers do not buy a system, but the “expectations of benefits a system provides for a customer over time” (Davies et al. 2007, p. 185).

However, solution providers are moving towards solutions offering, which is different from the concept of the integrated solution (Ferreira et al. 2013; Davies et al. 2007; Azimont et al. 1998). Some scholars differentiate the notion of an integrated solution and solution, in the sense that an “integrated solution solves customers’ operational problems, while a solution provides strategic advice to develop the customer’s business in the current market or potential markets” (Davies et al. 2007, p. 185). Other researchers distinguish an integrated solution from a solution by focusing on the high level of customisation in solution offerings (Johnson et al. 2003) and shared responsibility and information exchanged (Brady et al. 2005).

In the solution domain, researchers have sought to specify the specific characteristics of solutions. Some researchers, however, fail to make the distinction between solution offerings and other types of services such as industrial services (e.g., Kindstrom and Kowalkowski 2009; Oliva and Kallenberg 2003). Oliva and Kallenberg (2003), for instance, consider after sales services as service solutions and Kindstrom and Kowalkowski (2009) and Eggert et al. (2011 and 2014) consider industrial service offerings as solutions. Industrial services, according to Mathieu (2001) are categorised as (a) services supporting the supplier's product (SSP) and (b) services supporting the client's (SSC) action. In this context, Mathieu (2001) appears to distinguish SSP and SSC by the intensity of interactions between the supplier and customer and the level of customisation. Mathieu (2001) appears to believe that in SSC the intensity of interaction and customisation are higher than the intensity of interaction and customisation in SSP.

The argument raised by Mathieu (2001) seems to be the initiative for the latest evolution in solution domain, which focuses on improving and developing relationships between the solution provider and the customer even after delivering the solution. For example, researchers have contended that a solution represents a set of relational processes in which customer and solution provider work together to create a customised solution (Tuli et al. 2007; Galbraith 2002; Mathieu 2001). It is suggested by some that long term relationships with customers, increases the familiarity of the solution provider with the business customers’ needs, which enables the solution provider to offer customers exactly what they need (Davies 2004). Storbacka et al. (2013) argue a “solution is a long-term process with the customer rather than to the customers” (p. 3).

Other researchers such as, Brady et al. (2005) and Galbraith (2002) argue when the level of customisation of a solution increases, the relationship between the customer

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and the solution provider should be strengthened. In particular, increasing the level of customisation is thought to result in an increasing level of cooperation with customers. The underlying reason is that customers need to accept more responsibility in the process of solution provision by sharing more knowledge and resources with the solution provider about their needs and what they expect from the solution provider (Brady et al. 2005). In this sense, Antioco et al. (2008) argue that the solution is designed and customised to the customers’ need, when the solution provider and the customer interactively provide the solution. To highlight the importance of cooperation between solution provider and the customer, Tuli et al. (2007) suggest to achieve solutions that customers wish to have, a set of cooperative and step-wise relational processes are required. The relational processes assist the solution provider to understand customers’ requirements, customise and integrate the solution, deploy the solution, and then support customers after delivering the solution on an ongoing basis (Tuli et al. 2007). It appears that the recent evolution on solution provision obliges solution providers to enhance their ability to cooperate with customers on an ongoing basis to be able to customise the solution to customers’ needs and keep customers’ on their side (Storbacka 2011).

Although there is growing interest in understanding the nature, components, and outcomes of solutions, researchers have viewed solution in differing ways. The underlying reason for the various views towards solution is found in the unique and distinct characteristics of solutions, which can vary based on the type of industry and the characteristics of solution providers and the customers. To clarify how solution is conceptualised in the literature, Section 3.3 reviews and analyses the definitions provided for solution in the literature.