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Early supplier involvement in public IT procurement : factors that define the needed degree of supplier involvement during the pre-tender stage

Arentsen, Jeroen (2020) Early supplier involvement in public IT procurement : factors that define the needed degree of supplier involvement during the pre-tender stage.

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Abstract:Early Supplier Involvement is a concept from the Japanese automotive industry with considerable benefits for New Product Development projects including, cost reduction, lead time reduction and improved product quality. While Early Supplier Involvement is well established in the private sector, the concept remains largely unexplored for the public sector. This is unfortunate since especially Public IT procurement may benefit from supplier involvement due to specific challenges such as rapid technological developments and quickly changing markets. Thus, Early Supplier Involvement may offer an approach for public IT procurement to obtain more value for money. Former research suggests that supplier involvement should take place during the pre-tender stage of public IT procurement. However, it is unclear which factors determine the needed degree of supplier involvement. Therefore, this paper aims to identify and statistically assess the factors that define the needed degree of supplier involvement during the pre-tender phase. The needed degree of supplier involvement is explained by four supplier roles, including advice before the establishment of specifications, feedback on the defined specifications, and supplier involvement during the functional and technical specifications. A quantitative study is applied in the form of a questionnaire which was directed to public IT buyers in the Netherlands. The data of 155 completely fulfilled questionnaires were analysed and processed with a Principal Component Factor analysis and with Structural Equation Modeling Partial Least Squares. Results indicate that technology uncertainty drives supplier involvement for each of the supplier roles. Furthermore, previous supplier’s buyer-specific experience requires suppliers’ advice prior to the development of specifications. In addition, relational specific investments are expected to arise when the suppliers are involved to establish the technical specifications. Moreover, transaction costs resulting from the effort to establish a buyer-supplier relationship emerge when the suppliers are asked for advice prior to the establishment of specifications and when the suppliers are involved to define technical and functional specifications. Besides, the transaction costs caused by the likelihood that the suppliers are trying to take advantage of the buyer arise when the suppliers offer feedback on the defined specifications. Overall, this paper demonstrates that the degree of supplier involvement differs according to multiple factors that influence supplier roles during the pre-tender stage. Further research could further develop the defined supplier roles and could test more factors that influence these roles.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 85 business administration, organizational science, 88 social and public administration
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/82836
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