8 - Integrated solutions for customers

Summary

Since the early 1990s, a growing number of firms across many industries have been changing their business strategy to focus on the provision of high-value added services, such as distribution, finance, maintenance and other intangible, knowledge-based activities (Quinn, 1992; Oliva and Kallenberg, 2003). Suppliers of CoPS in particular are developing new business models to provide products and services as high-value integrated solutions from a single source that address each customer's business or operational needs. In a shift away from their traditional product or service offerings, firms like Alstom, the train manufacturer, now offer solutions for train availability, Rolls-Royce supplies ‘power-by-the-hour’, and WS Atkins, the design and technical consultancy company, provides solutions for the life cycle of a building.

Integrated solutions refer to a variety of new types of large capital goods projects supplied by CoPS firms, such as Ericsson's turnkey solutions and C&W's global outsourcing solutions discussed in Chapter 7. Providers of integrated solutions undertake many of the core systems integration and service-based activities previously performed internally by large business or government customers, such as corporate IT users, airlines and telecoms operators. Rather than supplying equipment and software, as in the past, the CoPS supplier specifies, designs, integrates and delivers a fully functioning system and goes beyond this to provide services such as finance and maintenance to meet the customer's long-term needs. The supplier may also operate the system during its life cycle.