Facilitating public procurement of innovation in the UK defence and health sectors: Innovation intermediaries as institutional entrepreneurs

This paper investigates how innovation intermediaries promote institutional change to facilitate public procurement of innovation (PPI). Several of the PPI implementation challenges reported in prior research originate in the institutional architecture underpinning demand articulation, and innovation procurement and adoption processes. We conceptualise innovation intermediaries as institutional entrepreneurs who seek to create new institutions or adjust existing ones to support PPI implementation. We report the results of two case studies of intermediaries facilitating PPI in the UK defence and health sectors, respectively. We contribute to PPI intermediation literature by showing that intermediaries address prevalent institutional failures through four types of institutional entrepreneurship activities: boundary spanning; advocacy; design of change; and capacity building. We elucidate, in particular, the role of individuals within intermediaries, as agents who learn about failures and adapt their institutional work over time. In doing so, these managers go beyond the remit and goals of the organisations they represent. The findings add to our understanding of how intermediaries support demand articulation for PPI by showing that their institutional work is also aimed at designing generic methods and processes to improve what is asked for, and how. We furthermore reveal conditions influencing the effectiveness of intermediaries' efforts to realise institutional change, thereby extending research on institutional entrepreneurship in PPI settings

Performance-based contracting in business markets

The aim of this Special Issue is to advance our understanding of performance-based contracting (PBC) in business markets. PBC has the potential for aligning incentives among buyers and sellers and fostering innovation. This paper critically reflects on extant research in order to develop a systematic knowledge map of PBC research. On that basis four major research gaps are identified and addressed, drawing out specific avenues for further PBC research. The knowledge map is also used to illustrate the focus and main arguments of the articles featuring in this Special Issue

Future business and the role of purchasing and supply management: Opportunities for ‘business-not-as-usual’ PSM research

The raison d'être for this article is simple: traditional ways of researching, theorizing, and practicing purchasing and supply management (PSM) are no longer sufficient to ‘meet the moment’. Scholars need to advance a “business-not-as-usual” footing approach to their work, if they are to make a meaningful contribution to addressing the current and future emergencies, as highlighted by recent extreme weather and the COVID-19 pandemic. Yet, what can this, or should this, mean for a field rooted in traditional business thinking? This article builds on the Journal of Purchasing and Supply Management's (JPSM) 25th Anniversary Special Issue editorial (2019); members of the JPSM's editorial team advance their unique perspectives on what “business-not-as-usual” means for PSM. Specifically, we advocate both thinking much more widely, in scope and ambition, than we currently do, and simultaneously building our ability to comprehend supply chains in a more nuanced and granular way. We explore whether the bias toward positivist work has omitted potentially interesting findings, and viewpoints. This leads to a call to re-think how we approach our work: should the key criteria always be to focus on theory development or testing? Should academics “think bigger”? Turning to specific research themes, illustrations of how our current thinking can be challenged or broadened by addressing the circular economy, and role of purchasing and innovation. Specifically, the focus on the PSM function as an intrapreneur within the larger organization, and the role of innovation and technology in PSM work. Taken together, we hope the ideas and arguments presented here will inform and inspire ambitious and novel approaches to PSM research with significant and enduring impact on the transformation of business

Contracting outsourced services with collaborative key performance indicators

While service outsourcing may benefit from the application of performance‐based contracts (PBCs), the implementation of such contracts is usually challenging. Service performance is often not only dependent on supplier effort but also on the behavior of the buying firm. Existing research on performance‐based contracting provides very limited understanding on how this challenge may be overcome. This article describes a design science research project that develops a novel approach to buyer–supplier contracting, using collaborative key performance indicators (KPIs). Collaborative KPIs evaluate and reward not only the supplier contribution to customer performance but also the customer's behavior to enable this. In this way, performance‐based contracting can also be applied to settings where supplier and customer activities are interdependent, while traditional contracting theories suggest that output controls are not effective under such conditions. In the collaborative KPI contracting process, indicators measure both supplier and customer (buying firm) performance and promote collaboration by being defined through a collaborative process and by focusing on end‐of‐process indicators. The article discusses the original case setting of a telecommunication service provider experiencing critical problems in outsourcing IT services. The initial intervention implementing this contracting approach produced substantial improvements, both in performance and in the relationship between buyer and supplier. Subsequently, the approach was tested and evaluated in two other settings, resulting in a set of actionable propositions on the efficacy of collaborative KPI contracting. Our study demonstrates how defining, monitoring, and incentivizing the performance of specific processes at the buying firm can help alleviate the limitations of traditional performance‐based contracting when the supplier's liability for service performance is difficult to verify

New Models of Contracting in the Public Sector: A Review of Alliance Contracting, Prime Contracting and Outcome-based Contracting Literature

The coordination of public services is an enduring challenge and an important policy priority. One way to achieve collaboration across organizational boundaries, which is being considered in public services such as the English National Health Service (NHS), is through the adoption of alliance contracting, prime provider contracting and outcome-based contracting. This article reviews the cross-sectoral literature concerning the characteristics of these new contractual models, how they function, their impact, and their relation to public sector governance objectives. These new contractual forms are characterized as models which, in line with the New Public Management (NPM)/post-NPM agenda, seek to incentivize providers through the transfer of risk from the commissioners to the providers of services. Key findings are that the models are likely to incur high transaction costs relating to the negotiation and specification of outcomes and rely heavily on the relational aspects of contracting. There is also found to be a lack of convincing cross-sectoral evidence of the impact of the models, particularly in relation to improving coordination across organizations. The article questions the reconciliation of the use of these new contractual models in settings such as the English NHS with the requirements of public sector governance for transparency and accountability. The models serve to highlight the problems inherent in the NPM/post-NPM agenda of the transfer of risk away from commissioners of services in terms of transparency and accountability

Servitization and process interfaces

We examine servitization in terms of process interfaces. Concepts are drawn from modularity theory to examine how the concept of interfaces can be applied to service settings. Based on this we examine how process interfaces change as we move from a basic product sale model to a result-oriented PSS. It is argued that close attention to process interfaces is an important way to attenuate complexity that may arise from servitization