Provider involvement in business service definition: A typology

• Buyers and providers interact to discover how best to match their indirect capabilities in relation to service definition.
• The buying firm's sourcing capabilities frame the nature of provider involvement in service requirements definition.
• Extensive buyer perceived uncertainty leads to provider developing specifications or translating functional demands.
• Providers emphasize cost efficiency by re-engineering or fine-tuning service provision, when buyer uncertainty is limited.
• Developing and translating roles are attractive in terms of value-add potential and customer relationship longevity.

This paper proposes a typology for provider roles in defining business services. The starting point of the study is the underlying rationale of much of the service purchasing literature that buyers have or can easily access the necessary know-how to procure business services. If this does not hold, the implication is that buying firms would shy away from buying complex services. An alternative perspective recognizes that purchasing business services requires its own set of sourcing capabilities, which may be lacking. Buying firms may have limited know-how in terms of defining and articulating their requirements or not be fully aware of them in the first place. However, the buyer's lack of sourcing capabilities need not be an injunction to internalize the service. In these circumstances, service providers step in, help buying firms specify their requirements and play a key role in defining what is procured and how. We build on this interactive view of service definition to undertake a comparative case analysis of four business service contracting situations arrayed along two dimensions — buyer perceived uncertainty and provider's buyer-specific experience. We conclude that service providers play different roles in each case. These are classified as translating, re-engineering, developing, and fine-tuning roles.