"Many companies consider purchasing facilities, marketing, financial, administrative, and IT services to be complex and that they are too customized, and suppliers are too diverse to adhere to the guidelines of strategic sourcing. Chapter 22: Sourcing Services delves into this topic and proves that fundamental strategic sourcing principles can be utilized to create competition, evaluate offers, and negotiate contracts for services, regardless of the targeted purchase. While the process remains relatively similar, when sourcing intangibles, you need to consider different variables, such as service levels as they apply to performance, and not just when and how products are delivered."
Payne and Dorn continue on to describe the nuances to consider when looking to source services and consideration points that can provide discount opportunities. These considerations include services tied to a material cost, warranties and preventative maintenance, and union relations. The authors provide a real-world example of putting strategic sourcing into practice by indicating a successful sourcing project, including services as well as other indirect products, which resulted in approximately $4 million in savings across 26 categories of spend.
"Managing Indirect Spend" is available for purchase on Amazon.com and a full table of contents and detailed synopsis can be found on the official strategic sourcing book website.