Evolving digitalization and sustainability requirements have increased the need for more critical alignment of product-service-software modules within smart sustainable product-service systems. As an emerging topic within digital servitization literature, integrating product-service-software modules into coherent offerings is inherently complex. Modularity is a valuable approach to manage and reduce this complexity by breaking down offerings into more manageable modules. Despite its potential, modularity has been underexplored as configurational approach to product-service-software offerings, requiring further conceptualization and investigation. Against this backdrop, our study explores the role of modularity in configuring smart sustainable product-service systems (smart SPSS) in order to achieve sustainability and productivity goals. In developing a theoretical-conceptual work, we combined smart product-service systems, life cycle offering, sustainability, circular economy and modularity concepts to address both the content and process of modularization of offerings. First, we develop a hierarchical decomposition logic of offerings into finer levels of product-service-software modules. Second, we synthesized important attributes of modular systems and adapted them to the level of offerings. Third, our work proposes a final definition for modularity in smart SPSS by synthesizing all concepts discussed. Lastly, we provide both theoretical implications followed by a plethora of managerial implications for practitioners.