The continuous increase in the amount of purchased services, in relation to the total procurement expenditures, should at first glance lead to the assumption of a corresponding strategic relevance in theory and practice. However, this is not always the case and will be further explored within this paper.
By elaborating the context of purchasing services in theory, the focus is placed on the differences between goods and services, existing and resulting difficulties within the services procurement, and suitable processes. This framework will attempt to show that even with compiled service models, a frictionless transfer from theory to practice cannot be entirely warranted.
In practice, the realization of the acuteness to implement approaches, and thus to profit from savings via more transparency and especially collaboration efforts along the entire supply chain, is certainly possible. However, due to a general long-lasting process in implementation and the present backwardness of theory in this field of research, the procurement in practice is still more operative than strategic. This situation is further examined by an interview with the XXXX department at XXX. The dialogue confirms the present willingness to adapt new approaches, but also reveals the former anticipated backwardness in procuring service performances. Primarily, practice still serves as a basis for new strategies.
Best practices serve as an orientation for companies to adapt this strategic approximation since their own developed concepts are namely based on theoretical ideas and benchmark activities stemming from practice. Therefore, theory and practice are interlocked.
In order to profit from uncontested positive outcomes of the strategic purchasing of services, one must realize that theory and practice are dependent on each other and build a certain entity. Solely an explicit stringent cooperation between academics and practitioners will offer valuable future potentials in purchasing services.
Table of Contents
1 Introduction
1.1 Research Objective
1.2 Procedure of Analysis
2 The Challenge of Managing the Services´ Spend
2.1 The Service Portfolio from a Supply Management Perspective
2.2 Differences and Similarities between Purchasing Goods and Services
2.3 Particular Difficulties in Purchasing Services
3 Concepts in Theory
3.1 Manufacturing-Based Models
3.2 The Application of Manufacturing-Based Models to Services
3.2.1 The Services Supply Chain Model
3.2.2 The Activities-Resources-Actors Model
4 The Status Quo in Practice
4.1 Purchasing Services in Chosen Companies
4.2 Case Study
5 Analysis and Comparison of Theory and Status Quo - A Benchmark
5.1 Theoretical Approaches versus Current Processes
5.2 Identification of Best Practices
6 Conclusion and Recommendations
Research Objectives and Key Topics
This paper examines the strategic procurement of services by analyzing the existing gap between theoretical frameworks and their practical implementation. The primary research objective is to determine to what extent service procurement in theory can be critically viewed, how it is implemented in current business practices, and whether these two domains are effectively interlocked.
- Theoretical differentiation between goods and services procurement.
- Application of manufacturing-based supply chain models to the service sector.
- Analysis of current procurement practices through corporate case studies.
- Benchmark assessment comparing theoretical approaches with real-world status quo.
- Identification of best practices for strategic service purchasing.
Excerpt from the Book
1.1 Research Objective
“Unfortunately, the tried and true rules for buying goods do not work when applied to the buying of professional services.“1 Thirty years ago, Wittreich already recognized the importance and the lack of an individual approach for buying professional services compared to the sourcing of goods. At this time, the intention behind buying was merely a reactive approach to overcome companies’ lack of capabilites to provide services on their own. This represents a rather operative procurement in a reactive sense.2
Today, this reactive behavior has developed into a more anticipating proactive approach. Lately, sourcing services has been moving in the direction of strategic purchasing. Up to 86 % of the total purchase spend are assigned to services. This service spend does not allow companies to neglect the importance of sourcing services in all sectors of today’s economy.3 To ensure a longterm competitive advantage, companies need to analyze and evaluate their value added by optimizing the amount of buying services.4 The remaining problem is that companies often struggle to break down their spend category, especially the amount belonging to services. Furthermore, what aggravates buying services is the fact that the purchasing departments are not integrated enough5 to ensure predominant procurement methodologies for further efficient cost-savings.6
Still, “the procurement department is often seen as the little brother of other company departments, who is on his way to grow up”. Even more rudimentary is the companies’ procurement of services – it is still regarded as “a real stepchild” 7. In addition to this grievance in practice, a shortcoming seems to be the rare dispersion in theory and literature.
Summary of Chapters
1 Introduction: Introduces the research objective, highlighting the shift from reactive, operative purchasing to a strategic approach for services.
2 The Challenge of Managing the Services´ Spend: Defines the service portfolio and details the fundamental differences, such as intangibility and perishability, between goods and services.
3 Concepts in Theory: Explores manufacturing-based supply chain models and evaluates their applicability to the service sector, specifically focusing on the Services Supply Chain and A-R-A models.
4 The Status Quo in Practice: Analyzes real-world purchasing trends through industry surveys and a specific case study of a cosmetics leader.
5 Analysis and Comparison of Theory and Status Quo - A Benchmark: Compares theoretical models with practical implementation to identify why gaps exist and how best practices can be formulated.
6 Conclusion and Recommendations: Summarizes the interdependency between theory and practice and advocates for deeper cooperation to professionalize service procurement.
Keywords
Purchasing, Services, Supply Chain Management, Procurement, Strategic Sourcing, Intangibility, Inseparability, Heterogeneity, Perishability, Best Practices, Benchmark, Services Spend, Process Optimization, Theory, Practice.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on the strategic procurement of services, investigating the challenges of applying traditional purchasing concepts to the service sector and the current gap between literature and practice.
What are the primary themes discussed?
The core themes include the management of service spend, the comparison between goods and services, the adoption of supply chain models, and the real-world application of procurement strategies in various companies.
What is the main objective of the author?
The primary goal is to critically analyze the alignment between theoretical procurement frameworks and their actual implementation in corporate environments, and to explore how they can be better interlocked.
Which scientific methods are employed?
The author uses a literature-based theoretical framework, an analysis of industry-wide research studies (e.g., CAPS Research), and a qualitative case study involving interviews with industry practitioners.
What does the main part cover?
The main body examines the specific challenges of purchasing services, discusses manufacturing-based models like the SCOR and A-R-A frameworks, and provides a benchmark comparison between theory and status quo.
Which keywords characterize the work?
Key terms include Strategic Sourcing, Supply Chain Management, Services Spend, Intangibility, Best Practices, and the interdependency of Theory and Practice.
How does the author explain the difference between goods and services?
The author distinguishes services through four main dimensions: intangibility, inseparability of production and consumption, heterogeneity (variability in performance), and perishability.
What were the findings regarding the corporate case study?
The case study revealed that while companies are shifting toward a more strategic organization of procurement, there is still a significant lack of transparency in service spend and a reliance on benchmarking rather than formal theoretical models.
- Arbeit zitieren
- Niklas Kürten (Autor:in), 2006, Purchasing Services, München, GRIN Verlag, https://www.grin.com/document/79062
