Assessing Value from Business-to-Business Services Relationships

[We’re pleased to welcome authors Paul Lyons and Louis Brennan of Trinity Business School. They recently published an article in Journal of Service Research entitled “Assessing Value From Business-to-Business Services Relationships: Temporality, Tangibility, Temperament, and Trade-Offs,” which is currently free to read for a limited time. Below, they reflect on this research:]

The word value permeates through academic literature and practitioner vocabulary alike, and references to concepts such as value realization, value-add, and value proposition are commonplace. Although the widespread usage of such terms implies that their meaning is intuitive, studies have repeatedly found that our understanding of what constitutes value is limited. B2B relationships are formed with the specific objective of developing sources of value that cannot be achieved when acting alone. However, understanding value from B2B relationships is particularly complicated given the complexities of the intra- and inter-organizational governance processes that apply, and the numbers of managers whose perceptions influence these processes. Drawing on 30 years of experience as a practitioner working with customers and suppliers of services, Dr. Paul Lyons (corresponding author) observes: “The most effective B2B relationships are those where both parties collaborate to achieve shared benefits. The challenge is often in achieving a consistent appreciation of these benefits across complex organizational structures.”

Based on the premise that value “is in the eye of the beholder”, this study explores the assessment of value by managers closely engaged in B2B services relationships. It analyzes these assessments to develop new insights into how value is assessed, and how these assessments may be influenced. The study longitudinally explores three services outsourcing relationships through in-depth interviews with 38 managers representing both the customer and supplier organizations. The findings enable the development of a framework, detailing four concurrent dimensions of assessments of Relationship Value:

– Temporality: Value assessments consider past, present, and future sources of value, but vary between assessments that are made on an ongoing basis (continuously), and those that are more periodic (intermittent).

– Tangibility: Assessments of Relationship Value consider quantifiable outputs such as financial benefits (tangible), and these which are more subjective (intangible).

– Temperament: Some assessments were found to be logical and structured (systematic), whereas others were based on feelings and senses (emotional).

– Tradeoffs: Assessments varied between those comparing returns achieved relative to costs incurred (benefits vs sacrifices) and those comparing experiences to what was anticipated (perceptions vs expectations).

The study also revealed that each of the above dimensions was evident to varying degrees across different constituencies that formed value assessments. The customer and supplier organizations as Institutions were identified as key constituencies, but the study also revealed the importance of value assessments formed by informal Collectives in both organizations. A central finding reveals the critical role of Relationship Leaders in influencing assessments. The study makes five recommendations to partnering firms seeking to better understand and optimize assessments of value by stakeholders in their B2B services relationships.

Prof. Louis Brennan (co-author) summarizes the contribution of this study, saying “To optimize the value of B2B services relationships we need to better understand how it is assessed by those most closely involved. This study provides new insights into how these assessments are formed and provides recommendations to managers on how to monitor and influence these assessments.”

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