external resources that are essential to initially provide the system performance.
The former two findings indicate that the development of performance-oriented systems affects the firm boundary in two ways. The first type concerns the downward integration
of the value steps of system composition and system operation. Performance-oriented systems therefore expand the firm boundary horizontally along the value chain into the use phase. The second type, concerning the transfer of valuable existing resources as well as co-specialization through integration and development of complementary resources summarized in finding four, indicates a vertical adaption of the firm boundary at the same step of the value chain. Both types fulfill the characteristics of an architectural innovation for value creation, whereas particularly the first type intends to integrate the identified bottleneck within the realm of the firm.
5.3 Adaption of Firm Resources for Value Appropriation
So far, the study has described the value creation of performance-oriented systems.
Literature indicates that value appropriation is as important as value creation. Thus, the study investigated how firms offering a performance-oriented system with diverse resources secure the rents of the system. The following chapter is divided into four aspects, the development of a central integrating module, its impact on the firm's innovation behavior, the evolution of the resource composition as well as the further system optimization.
In the previous chapter the study has illustrated the complex structure of performance-oriented systems which comprise a variety of resources. In this context, the research investigated which resource(s) are key for value protection and which are contextual.
Exemplary, 'Energy 5' explains this aspect: "Core of the business is fundamentally asset management business, so you have to understand how your assets are performing, [...]"
This quote indicates that it is not one single complement which is important but rather the operational management of all components within one system. This is supported by 'Mobility 9': "Internal is operational capacity. We have to have a good COO, Chief of Operational Office. You have in operations someone who knows how to operate.
Because that is your business, so that is important. Because that is your business." The operation of the examined systems is oriented towards providing performance.
Therefore, the informants often emphasized the role of a constant monitoring to provide and secure the absolute performance level of the combined resources, as explained by 'Energy 6': "We provide monitoring ourselves, so we have a monitoring system that comes back to our offices and our special monitoring station. And we monitor the performance, remark all the alarms, remark of the performance and based on that we can determine
if there was the problem. And if there was a problem, we will then deploy the maintenance company to go fix it." And further ('Energy 6'): "Inside the company we have other systems that we used to track all the aspects, all of the systems. And everything about the system goes into this tracking system, the big database. So all of the documents, all of the contracts, all of the data, all of the maintenance history, all of the contact people, any alert and any future calendar events that require our actions, all track in that big system." The quote extensively explains the role of a dedicated technical platform to connect, operate and monitor the diverse system resources. A central mission of the platform is data collection and evaluation to aggregate knowledge on and secure the performance of the system resources. The majority of the examined case examples use a technology-based 'integrating module' or platform that interconnects all necessary resources for operating the respective system. 'Mobility 4' illustrates the role of technology for the integrating module: "You need to understand sort about the whole customer services environment and you need to have, you have to make the pre-sets of customer joining, using your facilities. You have to be really, really slick: Joining, checking the license, collecting the money. We made it too complicated in the early days, but eventually as the technology improved and the systems we used got better, you get people to join quickly. So that is about customer services and it is about smart use of the information technology." Albeit performance-oriented systems comprise a diverse set of resources, recent technology developments allow the interconnection of the single components for an effective monitoring and operation. The connection technology, e.g.
mobile internet, global positioning system, etc., enables the governance of the complex system by the provider. The technology provides a frame to generate and structure the system information and thus enhance the firm's knowledge. Complementing the hitherto described characteristics, the majority of informants identified the integrating module, or platform, explicitly as the key resource for value appropriation within performance-oriented systems. Exemplary, 'Mobility 7' points out: “No, actually in Switzerland this is one of the key values of mobility, to run the system, to run the platform. And part of this platform is this technology of reservation, vehicle access and billing.” 'ICT 3' explains the role of the platform for their system in a similar manner: "We have to insure the stability of the system. So there has been a lot of work on the platform." The development of the integrating module is done internally, because of its importance. For example, 'ICT 3' asserts that: "We didn’t ask external resources to help us on the development of the platform." This statement is also supported by other informants, e.g.
'ICT 5': "The development team we are putting to run this is mainly focused on the
platform, because there is a huge effort of integration initially to bring the platform to any country."
To summarize, the key resource for value appropriation in performance-oriented systems is the integrating module that interconnects all system resources for an effective operational management. The development of the integrating module is done internally by the innovating firms. The advantage of the internal development of this module is that the system provider is able to build hidden information within the firm which can be easily protected. In a performance-oriented system the single tangible resources of the system as well as their composition are visible and in most cases also available to users and competitors alike, but the operational knowledge, e.g. the data on the absolute level of system performance, the single component capacity, the utilization rates etc., is only visible to the operating firm. For example, in a car-sharing system the single physical components, e.g. the type and number of vehicles, are visible to all industry participants. The utilization rate of the single vehicles, their running cost per kilometer or minute, the necessary distribution in a geographical area, etc., is only visible to the operating firm that constantly monitors the system through the platform. Thus, the aggregation of relevant operational experience over time through the platform secures an advantage of the firm within the industry which can be easily protected. This leads to the fifth finding:
Finding 5: The installation of a performance-oriented system requests the