Huge amounts of pounds are tendered annually on services and goods. Procurement like a profession has become a progressively more important focus. Companies recognise that these days, coming from a recession with increased global competition, an efficient procurement strategy often means the gap between profitability and receivership.
E-procurement entered the scene inside the nineties with the dotcom boom and e-markets. It took time to the real value to find light following your initial surge and consolidation. One technology which emerged in helping companies realistically and effectively at reducing cost was the reverse auction.
However, due to procurement professional’s degree of knowledge of this new technology, the primary way of delivering gains advantage from auctions was via consultancy. Companies emerged offering the chance for outsourcing this activity as well as their benefits originated from their skilled resource, technologically advanced methodologies, systems and comprehensive supplier databases.
With the general knowledge of reverse auctions vastly improved within the procurement community and with universities teaching about e-procurement within their curriculums, a lot more procurement professionals want to run their own tenders via reverse auctions.
Some of the companies have realised this and therefore are beginning sell their software stand alone or as a possible add-on with a larger Enterprise Resource Planning (ERP) system. This software remains expensive, cumbersome as well as assistance in best practice and training.
Thus now there is a niche looking for a commoditised product. Principle concept is simple because there is a paradigm shift from ‘luxury’ based software, which uses a alternative party, with a commodity creation that any professional buyer are able to use.
By providing a mixture of these features, reverse auctions are increasingly being taken to another stage of their evolution. Not only are they building about the understanding already available on the market, these tools may be easily opened to your buyer by offering an incredibly low barrier to entry with respect to cost, usability and best practice.
There’s services that start being utilized only by experts, reverse auctions now end up being commoditised. One only needs to discusses complex software such as engineering simulation, which is moving through the hands of engineers on the CAD Jockeys, or web page design and check engine optimization tools which commenced which has a plethora of specialized agencies but are now in the hands of consumers. Accountancy and CRM solutions have moved to the web model such as Clearbooks and Zoho examining complex applications to the SME market. This is actually the natural progression of software inside our technological age.
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