Don’t adjust your browser settings. You’re in the right place. This is still Alan Buxton’s blog. But with a new look and focus.
(Note: The old URL and old Feeds, whether from WordPress or Feedburner, will continue to work)
I started this blog with the vague intention of blogging about eAuctions in particular and Business Technology in general. But the more I write the more I want to keep these areas distinct. So much so that I’ve now decided to start another blog, Golden Pebbles to get tech stuff off my chest.
In parallel, over the last two years I’ve realised that the distinction between eAuctions and eSourcing is more arbitrary and more complex than I originally thought. I’ll try to explain:
The vast majority of the questions/issues/challenges I hear about reverse auctions are not about reverse auctions at all. For example:
- Auctions aren’t able to handle quality – they just consider price
- Auctions lead to suppliers selling at unsustainable prices, which is bad for the supply market
- Auctions lead to poor decisions because they try to compare suppliers bidding apples with suppliers bidding pears
But hang on – auctions are a tool. Used by buyers. Some buyers are keen to hammer suppliers on price. They may or may not use auctions to achieve this. For sure they can use auctions to hammer suppliers. But there are also plenty other ways to hammer suppliers. Check the recent “flaming lamborghini” stories about some of the negotiation tactics used by retailers. So change the word “Auctions” in the bullet points above with “Some buyers” and you have a more accurate picture of the reality.
Additionally, from the reverse auctions I’ve seen, it’s clear that the better ones need a lot of up front work to deliver. What you see on auction day is just the cherry on the cake. Before the auction you need to select suppliers, agree specifications, make sure everyone is clear on what is being contracted etc etc. In other words all the same stuff buyers should be doing anyway when they are sourcing. Whether they do an auction or not.
So my epiphany is that auctions are just sourcing. On one level it’s abitrary where you put the line between them because really an auction is not a different way of sourcing. An auction is just the best way of harnessing competition in your sourcing projects.
But running a good auction is about more than just turning on a piece of software. There is a lot of thought and hard work to do up front to give you the biggest chance of success. Again this should be no surprise. If you send out RFPs then the challenge is more to do with putting together sensible questions in the RFP. The challenge is not really about which piece of software is used to issue the RFP.
So while I remain a staunch advocate of auctions (and use them myself when I can) I find myself taking a broader view of auctions & sourcing than perhaps I did 2 years ago. And I figured it’s time to grow up a bit and get a proper domain name. My trials and tribulations with domain names are a story for another day but I finally settled on www.esourcingplace.com. A place for sourcing. Still focussed on auctions because it’s what I’m closest too. But I’ll also drop in some more general sourcing points now and again.