ABSTRACT
Academic research on collaboration and sourcing methods has exploded over the last 20 years. Research at the University of Tennessee shows that innovation and collaboration are not mutually exclusive; rather, they feed and build upon each other. Organizations typically think of procurement as a “make versus buy” decision. The Industrial Revolution enabled corporations to capitalize on large business ventures, and the result was vertically integrated companies designed to build upon and leverage their power. The market mode employs the free-market economy to determine how organizations will do business, including establishing a price. It assumes that free-market forces incentivize suppliers to compete on low price and high service. Every day, more and more research is proving that collaborative – not competitive – games yield consistently better results. University of Tennessee research and industry-specific experience in applying alternative output- and outcome-based approaches for complex contracts demonstrate that alternative sourcing business models are viable approaches to conventional transactional methods.
