In recent years, the principle of modularity has been increasingly applied to services as service providers seek to reduce time and cost of delivering customized service offerings. Given the intangible nature of many services, the identification of all elements and interdependencies is more challenging compared to technical systems. Uncertainty or vagueness of system composition can lead to higher efforts in system analysis and limit the quality of design decisions derived from a modularization of a service architecture. Therefore, we propose an iterative approach for the application of the Multiple Domain Matrix method for the modularization of complex service systems. By performing a detailed analysis of the service system’s elements and interdependencies, we propose design principles that enhance the application of the Multiple Domain Matrix method to complex service systems in order to increase the information quality of the analysis. The design principles emphasize interdependent consistency checks and a structured dialogue between service system analysts and domain experts that refine the model of the service system underlying the modularization. We demonstrate our approach by an application to a complex service system for integrated health care service in mental health care.