26th International Association for Management of Technology Conference - IAMOT 2017

Organisational market competiveness goes beyond reengineering and continuous improvement initiatives on supply chain processes. It requires that organisations should seek and adopt Total Cost of Ownership (TCO) which is designed to deliver a beyond price-based outlook upon sourcing decisions, TCO allows that all possible costs elements incurable during the acquired services and / or products’ life cycle are fully accounted, outlined and considered accordingly. This study evaluates and analyse the common perceptions towards the widespread adoption of the TCO concept by organisations’ key acquisitions decision-makers. Further evaluating the overall implications of adopting TCO towards strategic sourcing objectives to enable organisations’ key bottom-lines for market competitiveness, sourcing process effectiveness, and cost savings. The study’s empirical findings highlight the prevalence of quality and reliability of the suppliers’ offering and its capability to adequately meet the purchaser’s stipulated requirements over other considered parameters upon supplier selection. Notably is the dominance of lower price preferences as a major contributor to the reduction of TCO of the purchasing function leaving a loophole for non-quantified cost impacts, which is detrimental to organisational effectiveness and profitability. Conclusively, the study stresses the significance of quality and reliability in suppliers offering towards reducing the Life Cycle Cost (LCC). It also reveals how supplier-buyer relationship directly impact on the TCO strategic sourcing and thus emphasising the significance of good supplier delivery performances to the value chain. Key words: Total Cost of Ownership, Strategic sourcing, Supplier Selection, Supplier performances, Value creation.