Strategic procurement outsourcing: a paradox in current theory

Abstract

One aspect within Procurement Outsourcing (PO) currently raising research interest is strategic procurement outsourcing. The paradox is that while most sources state the potential of savings, not many organisations have even thought of outsourcing their procurement to any great degree. The main reason cited by managers to justify their reluctance to outsource the most strategic parts of the procurement function is the perceived loss of control. The claim of the paper is that the above-mentioned managers' impression is anchored in the past value networks and does not necessarily fit current realities, but will be changed only if the misfit is brought abruptly to their attention. We study some types of companies and their solutions and decisions, and claim that the most completely outsourced model would over time come to also fit other companies currently keeping their purchasing in-house, owing to changing strategic emphasis and globalisation.

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