Many of the world’s leading firms are developing a new model of industrial organisation based on systems integration. Rather than performing all productive tasks in-house, companies are building the capabilities to design and integrate systems, while managing networks of component and sub-system suppliers. This paper illustrates how systems integration evolved from its military, engineering-based, origins in the 1940s and 1950s to a modern day strategic capability across a wide variety of sectors. Taking a resource-based view of the firm, the paper shows how systems integration capabilities underpin the way high technology companies compete by moving selectively up and down stream in the marketplace through the simultaneous ‘twin’ processes of vertical integration and disintegration. Systems integrators of capital goods move downstream into service-intensive offerings to expand revenue streams and increase profitability. By contrast, producers of high volume components and consumer goods use systems integration capabilities to exploit upstream relationships with input suppliers. In both cases, strategic options and capabilities are shaped by the life cycle of each product. The paper develops a clearer understanding of systems integration, arguing that it now represents a core capability of the modern high technology corporation.

Systems Integration: A Core Capabillity for the Modern Corporation / Prencipe, Andrea; Hobday, M; Davies, A.. - In: INDUSTRIAL AND CORPORATE CHANGE. - ISSN 0960-6491. - STAMPA. - 14:(2005), pp. 1109-1143.

Systems Integration: A Core Capabillity for the Modern Corporation

PRENCIPE, ANDREA;
2005

Abstract

Many of the world’s leading firms are developing a new model of industrial organisation based on systems integration. Rather than performing all productive tasks in-house, companies are building the capabilities to design and integrate systems, while managing networks of component and sub-system suppliers. This paper illustrates how systems integration evolved from its military, engineering-based, origins in the 1940s and 1950s to a modern day strategic capability across a wide variety of sectors. Taking a resource-based view of the firm, the paper shows how systems integration capabilities underpin the way high technology companies compete by moving selectively up and down stream in the marketplace through the simultaneous ‘twin’ processes of vertical integration and disintegration. Systems integrators of capital goods move downstream into service-intensive offerings to expand revenue streams and increase profitability. By contrast, producers of high volume components and consumer goods use systems integration capabilities to exploit upstream relationships with input suppliers. In both cases, strategic options and capabilities are shaped by the life cycle of each product. The paper develops a clearer understanding of systems integration, arguing that it now represents a core capability of the modern high technology corporation.
2005
Systems Integration: A Core Capabillity for the Modern Corporation / Prencipe, Andrea; Hobday, M; Davies, A.. - In: INDUSTRIAL AND CORPORATE CHANGE. - ISSN 0960-6491. - STAMPA. - 14:(2005), pp. 1109-1143.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/59871
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