Category Archives: Reverse Auctions

What’s old may be new again – M&A and eAuctions – Part 1

As is often the case with many ideas in business, trends capture attention of decision makers in terms of what is possible. Procurement is no exception. Consider progressive concepts that advance procurement activities related to emerging areas such as in supplier risk or predictive analytics; both hot areas where Iasta continues to be focused for defining the modern sourcing paradigm. But trends also come from what was once considered old with a new spin. A perfect example of this is … More

10 Steps to Prepare for Your Next Reverse Auction

If someone said that running a reverse auction takes a lot of time and effort, then I would have to disagree. Don’t get me wrong. Conducting a reverse auction does take time and energy, but the auction itself may only last 45 minutes. In my opinion, the real sweat and tears occur in all the preparation leading up to the reverse auction. Rather than diving right into running a reverse auction, you need to prepare ahead of time by gathering … More

What Do The Indy 500 & Sourcing Projects Have in Common?

On Sunday, Indianapolis will rev up for The Indianapolis 500, which is the world’s most famous and prestigious auto race. “The Greatest Spectacle in Racing” covers 500 miles (200 laps) on the 2.5 mile oval track. So what can purchasing pros learn from the Indy 500? The Indianapolis 500 isn’t won in one lap – and an auction isn’t won based on price only. Price is certainly an important factor when choosing the right supplier for your business needs, but … More

Six Questions to Determine if a Reverse Auction is Appropriate for Your Sourcing Project: Part 2

In Part 1 of this series, I explained how the contract status and having clear specifications / requirements can drive the success of your reverse auction.  Click here to read Part 1. Today, we will cover 4 more elements to consider when developing your reverse auction project and strategy. Is the spend volume attractive? The bigger the potential business award, the more likely suppliers are to compile all of the pre-auction information such as non-price factors in an RFI or … More

Six Questions to Determine if a Reverse Auction is Appropriate for Your Sourcing Project: Part 1

Many products and services you are currently buying may be ideal candidates for a reverse auction. Reverse auctions allow you to collect pricing information in a competitive bidding environment and have comparative reports available at the conclusion. Suppliers submit pricing within a pre-determined time frame and receive real-time feedback on where their price stands by being able to include ranking or pricing information. Ask yourself these six questions to help determine if a sourcing project is appropriate for a reverse … More

Companies Watching Their Commercial Insurance Bid Live Online

At long last, the ability to see inside the “black box” of commercial insurance purchasing has arrived! Like almost everything else, commercial insurance purchasing is going live online. Buyers are seeing the benefits of using technology to improve the cost and coverage terms for their companies. Sourcing technologies are enabling CFOs and other stakeholders to go to their ipad or mobile device and view the auctioning of their commercial insurance.  The benefits just keep piling up because they get all … More

Why Commercial Insurance Companies Should Utilize Reverse Auctions vs. RFPs

Commercial insurance companies are experiencing a lack of transparency, efficiencies and fairness in the traditional insurance buying process, which is resulting in increased costs.  In addition, buyers often form long-term relationships and do not engage in a process that yields the best financial results. Costs can spiral upward in some cases significantly above the actual pricing that is available to the buyer on equal or better coverage terms. Furthermore, there are no solid benchmarks for buyers of commercial insurance. The … More

12 Symptoms That May Suggest a Procurement Transformation

Procurement transformation is often the greatest single driver of sustainable and implementable savings for companies. Yet these programs, by their very nature, often can disrupt aspects of business activity while changing procurement’s overall role and structure under the broader functional and enterprise umbrella. No company should enter a procurement transformation without realizing that such programs will nearly always result in: material turnover of key staff potential turf battles with line of business holders ongoing technology and process change the potential … More

Six Steps to Running Successful Reverse Auctions in the Insurance Space

Greg Henkin Managing, Partner iXchange, has more than 30 years of experience in the insurance industry. He has held senior management positions in several major insurance brokerages, owned his own brokerage and risk management consulting firms, and now owns and operates the iXchange. In his experience, reverse auctions in the insurance space are most successful when the sourcing event follows these six steps: Establish goals and parameters. Agree on the timing and date of the auction. In addition, you should … More

Structured Sourcing Process and e-Tool Deliver Double Digit Savings

As sourcing organizations mature, it becomes more and more challenging to deliver significant savings across well-sourced categories.  However, it has been Paladin Associates’ experience that there continue to be opportunities in both direct and indirect categories.  Recently a client engaged Paladin to lead the sourcing process for Flexible Intermediate Bulk Containers (FIBCs).  While the process was not unusual, its rigor demonstrated efficiency, effectiveness and the capability to deliver not only savings, but to provide greater understanding of and continuity of … More

Reverse Auction Strategy Can Halve Insurance Costs

The use of reverse auctions has significantly reduced the costs of many commodities that corporations purchase. The “art” of spend management and Group Purchasing Organizations (GPO’s) using reverse auctions is becoming common among private equity firms. The principal focus of spend management is on goods and commodities. The successful application of reverse auctions to such corporate service “spend” categories as legal, accounting and insurance is relatively limited.  A few large corporations have experimented with the use of reverse auctions for … More

eSourcing Does Not Equal Reverse Auctions

It seems that there are still some misunderstandings in the marketplace about the place of reverse auctions in eSourcing. I’ve noticed that several procurement professionals are facing resistance from their internal stakeholders to using eSourcing platforms. This puzzled me, so I decided to put on my detective’s hat. In my investigation, I determined that many procurement professionals: • Use a rigorous sourcing process or “playbook” • Have a common platform that provides a centralized place for everyone to collaborate and gain visibility … More

How eSourcing Has Changed the Negotiation Game

Love it or hate it, but there is no denying that eSourcing has revolutionized the purchasing arena. Negotiations will never be the same. Strategic eSourcing initiatives, processes and technology bring clear benefits to companies by: • Speeding up the negotiation time. Time savings is one of the most significant benefits of using eSourcing. • Increasing transparency. Both companies and suppliers get real-time visibility into what should be considered fair market prices. • Levelling the playing field for all parties. Everyone receives the information … More

Which Came First, The Chicken or The Egg… The Heart of Procurement

Which came first: the chicken or the egg? From Wikipedia, “To ancient philosophers, the question about the first chicken or egg also evoked the questions of how life and the universe in general began.  Cultural references to the chicken and egg intend to point out the futility of identifying the first case of a circular cause and consequence.” For me, this question is so procurement. You might think the last thing I would consider when I am talking to my … More

Why the Price Might be Too Good

by Dr. David Howie, Director, TPI Winning bidders in auctions often experience buyer’s remorse, a gnawing sense that they have paid too much for something that they don’t need and perhaps no longer want. Something similar can happen in reverse when a client selects the cheapest service provider in a competitive tender for outsourced services. For example, in today’s tough conditions, many clients are anxious to strike deals that shift fixed components of their cost base onto the provider. But … More