Exploring the role of service modularity in facilitating value co-creation: insights from knowledge-intensive business services

Abstract

Purpose This study aims to investigate how service modularity facilitates value co-creation in knowledge-intensive business services (KIBS). Design/methodology/approach An in-depth qualitative case study was conducted in a large international KIBS firm operating in the engineering, architecture and consultancy fields. Data from both the provider and customer side were collected through interviews, focus group discussions and secondary sources. Findings Eight modular components of KIBS were identified: segmentation, categorisation and unitisation of offerings; differentiation and decoupling of processes; and organisational centralisation, specialisation and partnership building. These components facilitate value co-creation, for example, by enhancing transparency, clarifying client needs, enabling efficient customisation, fostering customer participation, aligning resources and integrating specialised expertise. This study also highlights dynamic interactions among components and introduces partnership building as a novel modular element that further embeds a relational approach into modular service design. Practical implications The findings offer a useful tool for identifying and leveraging modular components to facilitate value co-creation in KIBS. It supports the strategic alignment of offerings with diverse customer needs, encouraging internal collaboration and knowledge sharing to strengthen modular service delivery. Social implications Modular service design can foster more sustainable infrastructure solutions in KIBS by facilitating value co-creation that benefits not only direct customers but also end-users, such as citizens relying on public services in the field of urban planning. Originality/value This research advances the understanding of service modularity, value co-creation and KIBS by itemising the modular components and demonstrating how they interact dynamically, thus actively shaping the conditions necessary for effective value co-creation in KIBS.