13 th International Conference on Wirtschaftsinformatik, February 12-15, 2017, St. Gallen, Switzerland Service Modularization in an Evolving Context: A Comparison between the Old and the New World of Automotive Engineering Services in Germany Florian Müller University of Bremen, Faculty of Business Studies & Economics, Bremen, Germany mueller@is.uni-bremen.de Abstract. Modularity in services has emerged as a promising design approach that offers a sound balance between cost-efficiency in service production and customization. However, the existing literature draws on a narrow scope of service design that considers certain characteristics of service as constraints to the successful adoption of the concept, i.e. service modularization. The growing importance of service as a central logic to explain value creation suggests the need to expand this view and to understand how service modularization and changes in dynamic service contexts may come together. This article makes a first attempt in this direction by exploring service modularization in the light of major restructurings in the field of automotive engineering services (AES) in Germany. Through 22 qualitative interviews with customers and providers of AES, this article presents a conceptual process model that explains how service modularization of AES is propelled by transformational forces in an evolving service context. Keywords: Service Modularization, Service Modularity, Automotive Engineering Services, Evolving Context, Service Logic 1 Introduction The increasing significance of service in our modern economy [1] is accompanied by a growing pressure on service providers to become more cost-efficient in service provision. On the other hand, customers are more demanding than ever and expect customized services for their individual needs [2]. Consequently, ambitions to achieve cost reductions and efficiency gains through service standardization [3] are contradicted by the fact that providers need to remain flexible to meet the heterogeneous demands of different customers at once. From this challenge, service modularity has emerged as a promising design approach to achieve a sound balance between standardization and individualization at the same time [1]. In general, modularity can be viewed as an architectural principle that describes the decomposition of a complex system into smaller parts, i.e., modules that are characterized by a high internal cohesion but are loosely coupled among each other [4]. Standard interfaces between modules enable a high flexibility in the system and ensure that modules can function together as a whole [4].