José Manuel Iáñez | Partner-Director of Iáñez & Tapia explaines simply and clearly how to analyse a reverse auction suitability, considering the position of the product or service to be acquired from three different perspectives, represented by three quadrant matrix graphs. Superbe!.” The limited application of the auction is demonstrated by the survey sponsored by the Spanish Association of Purchasing and Provisioning Managers (it can be requested at Future Purchasing: only 15% of the 406 purchasing managers interviewed in our country believe that electronic auctions can be applied to more than 10% of their purchases.
On the other hand, nearly all the platforms and companies that are dedicated to eSourcing are wholly convinced about the reverse auction. One possible reason for this gap is the business model of the majority of these platforms, which are based on commissions and success fees. The reality is that a correct eSourcing platform (or electronic negotiation) should offer more. ITbid, our own platform, offers different powerful negotiation tools depending on the requirements of distinct purchases, when the use of a reverse auction is not recommended.
Our intention is precisely to demonstrate to our clients that eSourcing offers substantial advantages in nearly all negotiations, provided that the correct negotiation tool is chosen. Experience shows us that the key factor is the alignment of the purchasing strategy with the electronic negotiation tool. Our methodology is based on considering the position of the product or service to be acquired from three different perspectives, represented by three quadrant matrix graphs:
, provided that the correct negotiation tool is chosen. Experience shows us that the key factor is the alignment of the purchasing strategy with the electronic negotiation tool. Our methodology is based on considering the position of the product or service to be acquired from three different perspectives, represented by three quadrant matrix graphs:* Purchase Value / Supply complexity matrix (Kraljic matrix)
* Specifiability / Rivalry among suppliers matrix
* Switching Cost / Contract Duration matrix ”
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