Organizing for solutions: How project-based firms integrate project and service businesses

• Published in: Industrial marketing management Vol. 45; pp. 70 - 83
• Main Authors: Artto, Karlos, Valtakoski, Aku, Kärki, Heikki
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01.02.2015; Elsevier Sequoia S.A
• Subjects: Business services; Collaboration; Customer relationship management; Customers; Integrated approach; Integration; Life cycles; Management; Marketing; Project-based firm; Projects; Public relations; Relationship marketing; Service industry; Services; Solution business; Studies; Solution business; Services; Projects; Integration; Project-based firm
• ISSN: 0019-8501; 1873-2062
• DOI: 10.1016/j.indmarman.2015.02.021

Project-based firms (PBFs) increasingly provide comprehensive solutions that consist of products, product systems and services. In solution businesses, long-term collaborative relationships between solution providers and customers are essential. However, little is still known about how relationship marketing activities should be integrated across organizational units, particularly at the practical level of delivering individual projects and services belonging to complete solutions. In this study, based on a case study of a project-based firm and four of its system delivery projects, we identify eight micro-level integration mechanisms for integrating the activities of the project and service business units at the level of delivering a single solution. The joint participation of both project and service business units in project and service activities over the life cycle of a single delivered system enhances the management of customer relationships between the units, and ensures the continuity of the customer relationship over the system life cycle. The identified integration mechanisms also help PBFs to integrate services into their core business and overcome the problems arising from the discontinuous nature of project business. •Provision of solutions in project-based firms (PBFs) is organized through delivering projects and services to customers.•We report eight micro-level integration mechanisms for integrating project and service businesses in a PBF.•These mechanisms take place at the level of project and service activities in the life cycle of a delivered system.•Joint participation of project and service business units in the system life cycle enhances the continuity of customer relationships.•The integration mechanisms help PBFs to overcome the problems with the discontinuous nature of project business.