E-procurement has been around for some time now, but it is surprising how few organisations utilise it when procuring goods and services.
When I refer to e-procurement, I specifically mean online or electronic tenders and reverse auctions. To me, an e-tender is not a soft copy Word document sent via email. This is not realising the benefits that e-tender software has to offer, which includes the ability to add large files (e.g. detailed technical specifications, artwork) to an online portal for participants to download.
Additionally, the best systems allow you to track participants’ progress through the tender and message everyone simultaneously with any new information. E-tenders should enable the buyer to administer and manage the whole process more efficiently and effectively.
There is still a lack of understanding within buying organisations and a reluctance from suppliers to participate in e-auctions. A property director I worked with baulked at using e-auctions in their area of the business. “We’re not buying our carpets off eBay” was the view.
Another perspective is that e-auctions are only appropriate for commodity items. In reality, if you can clearly define your requirements and involve enough appropriate suppliers, you can auction almost any good or service, provided the spend is sufficient to make it a worthwhile exercise for the buying organisation and of interest to suppliers. But e-auctions are not a panacea.
Significant work needs to be done to define your requirements pre-auction (e.g. drawing up specifications, forecasting volumes, confirming terms and conditions), pre-qualify suppliers, ‘build’ an appropriate auction (there any many different types and variables), talk suppliers through how the auction will work and ensure they are fully trained.