The goal of most organizations is to reduce costs through streamlining procurement processes. The introduction of electronic applications into the procurement process opens up opportunities for significant cost reductions. The introduction of electronic reverse auctions is currently one of the most popular forms of electronic procurement processes. Many organizations declare the introduction of electronic reverse auctions is saving them from 10 – 20% of their costs.
No doubt, you all understand the procurement process in an organization. You know that it is a set of decisions by which an organization purchases goods and services. It contains the following nine phases:
The main goal of the organization is to procure goods or services at the lowest possible price, provided that other requirements (such as quality, payment terms, etc.) are met by suppliers as well. It is generally thought that the lowest bid is the most advantageous, but it does not have to be the only criteria.
The introduction of electronic auctions in the procurement process, is often associated mainly with significant savings in the cost of purchased goods or services, such a scenario may not always be the rule and each organization must thoroughly analyze the impact of the auction as well as its precise definition of parameters. Reverse auctions are not suitable for all industries or for all procurement situations, but if used in the right situation for the right category of expenditure, there are many benefits to reverse auctions and can lead to significant cost savings.
„Simple to use and intelligent than you can imagine. We procure any items or services with bestauction now. A really helpfull and cost saving tool.“
„I searched for the building contractors and they’ve delivered in a few seconds in my area. I’m actually astonished at how quickly bestauction helps me to get results. Furthemore, using bestauction I’ve been able to get considerable price discount for building materials without a need going anywere to negotiate.“
„We actively use the online reverse auction for product procurement , and in turn, we get the benefits in terms of more efficient and transparent purchasing process.“