Leveraging strategic sourcing and knowledge management to improve the acquisition of knowledge-based services

Abstract

Knowledge-based services (KBS) comprise a major portion of services acquired by public organizations. However, their procurement is not well managed; consequently, inefficiencies abound. Therefore, this study explores whether and how KBS can be sourced more efficiently by examining best practices and precepts from knowledge management theory. A spend analysis of one agency ’s spend is used to identify the types of KBS procured. Interviews from 12 cases are then used to identify best practices and cost drivers in sourcing KBS. Twenty one recommendations for improving efficiency in sourcing KBS are offered. The findings suggest that potential is available from demand reduction strategies, and that public policy governing the procurement of knowledge is needed. The research concludes with theoretical implications and suggestions for future research.