4 - Systems integration and competitive advantage

Summary

This chapter examines one of the core capabilities of producers of CoPS and other high-technology goods and services, namely systems integration. Systems integration is defined as the core technical and strategic capabilities which enable a project business to combine all the various production inputs, including components, subsystems, software, skills and knowledge, to produce a product, system, construct, network or service. The aim of the chapter is to assess the nature and importance of systems integration by examining historical and recent research. It shows how systems integration evolved from its original application in the 1940s and 1950s in the military arena to other CoPS sectors and more recently to high-volume, technology-driven industries.

As a capability, systems integration has become increasingly important for organising production both within and across firms. As the chapter shows, while systems integration began as a technical, operations task (part of the wider functional discipline of systems engineering), today it is a strategic business capability, central to the management of many high-technology projects. The more complex, high-technology and high-cost the product, the more significant systems integration is to the capability and strategy of the firm. The chapter shows how systems integration underpins the competitive strategy of the CoPS firm as well as the particular position the firm takes within the value stream of an industry.