What value can the pointy heads add to procurement?

Effective reverse eAuction design is one area that springs to mind.

I will declare an interest up front – the company I work for runs eAuctions.

But any perceived bias should not detract from the main facts that I have seen time and time again:
1. In the vast majority of cases, running a properly-designed eAuction will deliver lower prices for the buyer than would be achievable through a traditional off-line tender process.
2. Today’s auction technology is powerful enough to model non-price value-add elements, like service, delivery etc. Building these factors into the auction leads to an even better result (in terms of total value for money) than purely auctioning price.

Naysayers complain that auctions can’t work for their category because to run an effective eAuction you have to:
1. Be clear up front about what you want to buy
2. Be clear up front about the process for awarding the contract (e.g. how you value price as against non-price elements of the bid)

But these two factors, I am told, are no more and no less than best practice in procurement. Being vague about requirements or about the contract award process can seem like a quicker way to get things going, but the cloudier they are the more scope there is for individual suppliers to lead the process down a path that is not the best for the buyer.

The best results, for both buyer and the market as a whole, will be obtained when the buyer is open about the requirements and the criteria for being awarded the business, and when both of these are made as simple as possible in order to minimise the risk of misunderstanding.

Naive, perhaps, but then again, as Einstein, the most pointy-headed of all, said, Everything should be made as simple as possible, but not simpler.


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