The analysis presented here has several implications for management practice. First, the personal engagement model (O’Mahoney, 2010) has been shown in the research here to possess shortcomings with respect to management consultancy purchasing, particularly with regard to governance. A degree of process formality via increased procurement involvement
32
might, therefore, be important in addressing these shortcomings within organisations where the personal engagement model still prevails.
Second, it is important that any increased procurement involvement should not just involve the transfer of staff from other procurement roles, especially if this increased involvement extends to the sourcing and contract management stages. Instead, specific investment in recruitment (possibly targeting former management consultants) and /or management consultancy-specific training will be required. Where levels of management consultancy expenditure do not warrant such an investment, it may be necessary to limit procurement involvement to the needs assessment stage. A further option would be to engage third-party assistance.
Third, the research shows that the management consultancy services end-user community within buying organisations is very diverse and includes senior managers and executives. As a result, if procurement professionals are to engage meaningfully in the procurement process they need to adopt a supportive role and possess significant social capital and credibility with end-users. The latter again suggests the need for the recruitment of former management consultants. It also suggests a role for interpersonal skills training (Tassabehji and Moorhouse, 2008) and cross-functional team working in order to develop greater empathy and understanding between procurement professionals and end-users (Driedonks et al., 2014; Kiratli et al., 2016).
Several caveats and avenues for future research also need to be kept in mind with regard to the research presented here. First, as mentioned earlier, the sample in this study was not entirely balanced in its composition, due to the potentially skewed perspective of buy-side end-users. Second, the research reported here, for reasons of commercial confidence, did not include buy and sell-side participants of the same service purchase. Future research might seek to address this limitation. Third, while we offer empirical support for the depiction of
33
procurement involvement in Figure 1(b), further research is needed to identify whether there are additional factors not present in the research here that impact upon effective procurement involvement in management consultancy services purchasing, allowing a development of the positive scenario in Figure 1(b). Such research could also identify whether the depiction of procurement involvement in 1(b) was observed in a wider range of service and geographical contexts. Finally, further research might investigate specific aspects of the research, in particular the apparent buy-side trend of recruiting former management consultants that appears to be enhancing procurement ‘maturity’ in management consultancy purchasing. Such research would make a valuable contribution to not only the management consultancy literature, but also the literature (Ellram and Tate, 2015; Schoenherr et al., 2012, for example) on services purchasing more broadly.
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42 Table 1: Details of research sample
Int. Code Informant Level / Role Industry (for clients) Specialisation (for suppliers) Annual Turnover (£) Number of Employees
P1 Category Head Public Sector X 1 to 2.5bn 5 to 10k
P2 Category Head IT Services X 10 to 15bn 75 to 100k
P3 Procurement Manager Oil and Gas Construction X >100bn 75 to 100k
P4 Procurement Director Telecoms X 15 to 20bn 75 to 100k
P5 Category Manager Public Sector X 5 to 7.5bn 10 to 25k
P6 Procurement Director Public Sector Buying Agency X 0 to 1bn <1k
P7 Professional Services Manager Construction X 2.5 to 5bn 25 to 50k
P8 Category Head Financial Services X 75 to 100bn 150 to 200k
P9 Procurement Director Public Sector X 0 to 1bn 1 to 5k
P10 Procurement Manager Public Sector X 0 to 1bn 1 to 5k
P11 Senior Buyer Automotive X 0 to 1bn 1 to 5k
P12 Procurement Director Public Sector X 0 to 1bn 5 to 10k
P13 Category Head Railway Construction X 10 to 15bn 50 to 75k
P14 Procurement Manager Public Sector X 0 to 1bn 1 to 5k
P15 Procurement Manager Electronics Manufacturing X 75 to 100bn 50 to 75k
P16 Procurement Manager Communication Equipment X 10 to 15bn 25 to 50k
P17 General Manager (with procurement responsibility) Prof Services (Industry Body) X 0 to 1bn <1k
P18 Procurement Manager Public Sector X 7.5 to 10bn >200k
S1 Senior Consultant/Owner X Supply Chain <1m 0 to 5
S2 Senior Consultant/Owner X Prof Services <1m 0 to 5
S3 Director X Construction 0.25 to 0.5bn 3 to 4k
S4 Managing Director X Financial Services ‘Unreported’ 10 to 20
S5 Partner X General Coverage 3 to 4bn 15 to 20k
S6 Division Head X Construction 0.25 to 0.5bn 3 to 4k
S7 Managing Director X General Coverage ‘Unreported’ 20 to 30
S8 Consultant X General Coverage 1 to 2bn 2 to 3k
S9 Chairman X Lean Six Sigma 2.5 to 5m 20 to 30
S10 Consulting Director X Financial Services 2.5 to 5m 30 to 40
S11 Vice President X General Coverage 5 to 10m 20 to 30
S12 Chairman X Global Supply Chain 3 to 4m 20 to 30
S13 Founding Partner X General Coverage 4 to 5m 30 to 40
S14 Senior Outsourcing Advisor X General Coverage 0.25 to 0.5bn 2 to 3k
S15 Founder and Director X General Coverage 1 to 2m 10 to 20
S16 Division Head X General Coverage 10 to 20m 75 to 100
S17 Senior Manager X Construction 10 to 20m 75 to 100
S18 Director X FMCG 10 to 20m 75 to 100
S19 Head of Risk and Opportunity Management X Construction 0.25 to 0.5bn 3 to 4k
E1 (Ex) Senior Analyst Financial Services X 15 to 20bn 25 to 50k
E2 HR Director Telecoms X 15 to 20bn 75 to 100k
E3 Internal Consultant Financial Services X 50 to 75bn 50 to 75k
E4 Head of Group Business and IT Services Financial Services X 0 to 1bn <1k
E5 Commercial Director Public Sector X 0 to 1bn 10 to 25k
E6 Senior Commercial Process and Governance Manager Public Sector X 25 to 50bn 50 to 75k
E7 Property Manager Food and Drink Construction X 1 to 2.5bn 5 to 10k
E8 Interim Manager Various Services X n/a n/a
E9 Project Manager Public Sector X 0 to 1bn <1k
E10 Client Defence Manager Financial Security Services X 2.5 to 5bn 10 to 25k
* Procurement staff are usually termed (in order of seniority) chief procurement officer, procurement director, procurement/category manager (a ‘category head’ will also usually be at this level), senior buyer and buyer. In this article, we refer to procurement staff as ‘procurement professionals’ to encompass these different titles.
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Figure 1: Modifying the management consultancy literature view of increased procurement involvement
(a) Established view within the management consultancy literature regarding increased procurement involvement
(b) Modification of established literature view – alternative scenarios observed in research Personal engagement model is modified by increased procurement involvement. Resultant service outcome
Service fit to client need damaged and service objectives not met.
Procurement involvement is negative
- Excessive formality and myopic price focus on part of ill-equipped procurement professionals, especially at the sourcing stage. - As a consequence, critical close end-user/supplier engagement is undermined and service provision becomes commodified.
Resultant service outcome
Service fit to client need damaged and service objectives not met. Personal engagement model is modified by increased procurement involvement.
Negative procurement involvement
- Procurement professionals lack service-specific knowledge, social capital with end-users and an appreciation of their supporting role. - Such professionals introduce excessive formality and a myopic price focus, especially at the sourcing stage.
- As a consequence, critical close end-user/supplier engagement is undermined and service provision becomes commodified.
Resultant service outcome
Service fit to client need maintained and service objectives met, often with enhanced value for money due to a complementary and necessary greater focus on cost-related issues.
Positive procurement involvement
- Procurement professionals possess service-specific knowledge and social capital with end-users, and accept a supporting role.
- Procurement professionals seek value for money not lowest cost and are cognisant of the need for close end-user/supplier engagement.
- Increased procurement involvement is welcomed by end-users, particularly at the needs assessment stage.
- Close end-user/supplier engagement is preserved and the heterogeneity of service provision is maintained.
- At the same time, the formality engendered by increased
procurement involvement leads to greater cost focus and addresses the governance concerns of the personal engagement model.