The Resurgence of the eAuction

With variants of 'reverse', 'step', 'japanese, 'dutch' and 'cherry lot', it is easy to understand why eAuctions can be seen as a 'mystic art' to new practitioners. However, the central vein of ensuring competition between buyer and seller remains constant through all variations. First popularised in the early 1990s, this strategy is seeing a resurgence for buyers who wish to ensure cost competitiveness while utilising a broader e-Sourcing package to guarantee that important qualitative criteria are fulfilled within their Supply Chains. 

With common misconceptions that all eAuctions processes place an over-emphasis on pricing at the detriment of other assessment criteria so prevalent, 7 Steps have compiled a list of the top three advantages to utilising an eAuction, hopefully dispelling some common fallacy along the way.

Streamlined Process

Sourcing processes can traditionally become lengthy and convoluted. From conducting market insight, document creation and release, approaching for quotes and comparing proposals, the traditional process can become tenuous and long-winded. Online auctions can compress timelines by leveraging the administrative functionality of the system to release, track, manage and design all on a system that all parties can access in real-time. 

This ultimately decreases the admin requirement from the buyer's perspective and allows for a greater variety of suppliers in the process; allowing the buyer to focus on jobs that would have a marketable difference in the proposal's quality.

Open Process for both Buyers and Sellers

Linking to the point above, lowering the admin requirement to set up an eAuction allows the buyer to involve 'wild card' suppliers who are either smaller and looking to grow their footprint within a business or identify new suppliers not known to your organisation. This can lead to the discovery of new partners which can add value to the organisation.

For suppliers, the open nature of an eAuction allows a seller to bid for opportunities not classically available to them under normal circumstances. This allows entry into new markets and generally provides for a more open market environment favouring quality and competition. 

Cost Competitiveness

The most obvious benefit from employing an eAuction is to drive cost efficiencies for goods and services tendered against. By leveraging an open, instant feedback marketplace, bidders compete against other suppliers to win the event. Buyers exploit the system to involve a greater number of suppliers and heighten the competitive forces at play. Gone are the days in which eAuctions are used for simple standardised commodities and are now increasingly used by 'best in class' procurement functions as part of a more comprehensive process for complex goods or services.

For suppliers, it is essential to establish the weighting of commercials against other criteria before embarking on a new process. In this way, suppliers can prioritise processes that fit their pricing level. With pricing often not the major selecting criteria when choosing a new supplier, eAuctions, when done correctly, are not the 'race to the bottom' which is often thought.

7 Step Solutions currently utilise the Market Dojo Procurement and eSourcing Software. As a strategic partner, Market Dojo delivers both the capability and flexibility to enhance buying within organisations of all sizes and complexity of buying. With a focus on self-service, the user-friendly style of the system lends itself to users who typically may not have a background in procurement but nonetheless want to improve the process and rigour of their procurement. Market Dojo has a full suite of products that help augment users to achieve 'best-in-class' outcomes.

For further information on how 7 Step Solutions can assist in any eAuction or eSourcing activity, please get in touch to find out more – admin@7stepsolutions.co.uk