The article “Purchasing professional services” discusses how contemporary companies approach their purchase of professional services, which becomes an increasingly important spend. Companies tend to formalize the purchase of services to get the best cost-benefit ratio. Pemer, Werr, and Bianchi pose a research question of the formalization policies utilized for purchasing services and whether and how these policies affect the ability to acquire professional services. The study used a sample of 351 large Swedish firms with the rationale that such companies are the most likely to purchase external consulting services regularly. The authors calculated the level of formalization by using seven variables, such as criteria for when and how to hire consultants, the existence of preferred suppliers, price lists, and different types of guidelines. They then contrast the scores for these variables to the firms’ purchasing efficiency.
Based on the scores demonstrated by the sample firms, the authors establish the main formalization strategies employed by the companies in their sample. The main two are the formulation of policies and the establishment of preferred supplier agreements. The authors point out that the frequency of the service purchase drives preferred supplier agreements. At the same time, the firm size is the most notable factor driving the establishment of formalized policies. Apart from that, the study establishes that the formulation of policies is the only approach that has a meaningful impact on the purchasing efficacy. The authors conclude with a reiterated distinction between the formulation of policies and preferred supplier agreements as two distinct approaches with different antecedents and outcomes. They also discuss the managerial implications of policy formulation as more closely related to purchasing efficacy and acknowledge the study’s limitations as it focused on consulting services in a Swedish context.
References
Pemer, F., Werr, A., & Bianchi, M. (2014). Purchasing professional services: A transaction cost view of the antecedents and consequences of purchasing formalization. Industrial Marketing Management, 43(5), 840–849. Web.