Buying Business Services

Purchasing is a function of growing interest and importance within most companies and organisations. We also live in a society where services are being produced and consumed as never before. This book aims to discuss the procurement of services in the context of the company as a whole, looking at both the integration of purchasing within the companies' flow of activities and the system of supply chains which can affect the conditions for purchasing behaviour.

Bjorn Axelsson is Professor in business administration at Jonkoping International Business School and Stockholm School of Economics.

Finn Wynstra is Associate Professor at the School of Technology Management at Technische Universiteit Eindhoven, and research fellow at Jonkoping International Business School.

Foreword

Acknowledgements

About the Authors

PART I: INTRODUCTION

1 The Increased Importance of Buying Services

The service society

Services defined

Development of the purchasing function

Buying business services

Summary and book overview

2 Business Services, their Providers and Customers

Types of business services

Types of business service providers

Types of business service customers

Different forms of business services

Conclusions

PART II: BUSINESS SERVICES AS FUNCTIONS AND ACTIVITIES

3 Business services in terms of activities, resources and actors

Services described as activities and functions

The A-R-A model

Allocation of activities between actors

Conditions for allocation of activities: production technology

Analysing and changing activity structures

Buying business services as resourcing

Activities, resources, actors and the concept of Supply Chain Management

Conclusions

4 Outsourcing and insourcing of functions and activities

Some illustrations of outsourcing and arguments for favour and against

Strategic aspects

Performance aspects

Organizational aspects

Deliberate versus emergent outsourcing

Summary checklist

Conclusions

5 Buyer-Supplier Interaction in Business Services Exchange Processes

Exchange processes between buyer and seller

Describing and understanding business interactions

The nature of exchange processes in relation to the type of business service

The complexity of the service and the type of problem solution

The type of service application

Basic services versus problem-solving services - a comment

Conclusions

6 The Impact of E-commerce

E- commerce - a definition

Some key benefits of ICT

Enabling techniques

The potential of e-commerce

Basic forms of e-procurement

E-commerce and the interaction patterns between actors

E-commerce and the impact of patterns of division of labour along supply chains

E-commerce and its' likely impact on different kinds of services

Barriers to exploiting e-technology

Conclusion

PART III: APPLICATIONS: THE PROCESS OF BUYING BUSINESS SERVICES

7 Specifying Business Services

Purchasing as a rational decision process

Service Level Agreements: a way of specifying business services

Methods for specifying business services

Business service quality

Quality deviations: when routines no longer work

Service quality assurance

Conclusions

8 Selecting and Evaluating Business Service Providers

The Importance of Supplier Selection and Evaluation

A model for data capture

Evaluation models

Prerequisites for a relationship: a matter of fit

Specific aspects to consider when the supplier is a service provider

Conclusions

9 Contracting Business Service Providers: Pricing, Negotiations and Payments

Pricing principles

Cost-based pricing

Market-based pricing

Value-based pricing

Interrelations between the three price elements

The impact of negotiation strategies

payment Principles

Conclusions

PART IV: REFLECTION

10 Transaction-oriented and Related-oriented purchasing

Transaction oriented purchasing philosophy

Relationship-oriented purchasing philosophy

Efficiency in supplier relations

Purchasing philosophy and buying business services

Purchasing philosophy and the use of ICT

Variations on the theme transaction vs. relation-oriented purchasing strategy

Combining different approaches

Conclusion

11 Buying business services: the market perspective versus the network perspective

Outer context: markets vs. networks

Purchasing in a market environment

Purchasing in a network environment

Two main categories of networks

Characterizing network structures

Networks of activities, actors and resources

The fundamentals of network structures

Networks as force fields

Networking to influence network structures and processes

Creating and designing supply structures

Markets and networks combined

Conclusion

12 Summary

The contents

Finally

References

Index