Etiket arşivi: e-ihale

Eauction Trends in Retail Businesses

Online auctions are transactions that result from a competitive bidding process usually conducted over the Internet. Whether the sales take place between individuals, between consumers and merchants, or between businesses, online auctions have enjoyed rapid growth with the spread of Internet access. Historically, e-auctions were designed to ensure the best prices for commonly used low cost goods such as stationary or component parts. However, the practice has since evolved into an important asset in procurement’s toolset and can provide exceptional value when applied in the correct circumstances, one of which being retail businesses.

Retail markets are highly dynamic and very competitive, having to deal consistently with very tight margins due to the huge amount of resources it takes to keep product quality high. Procurement/sales teams in these sectors need to be on top of their game in order to compete and remain financially viable.

Retail Businesses today aren’t finding it easy, but in the face of all these pressures, many of them are still thriving mostly by incorporating an e-auction strategic approach to its sales/sourcing as part of her overall business strategy. Beyond driving operational efficiency and cutting costs, this approach to can help even the best-performing retail businesses enhance customer/vendor relationships, increase product and ingredient quality, reduce spending and find new sources/outlets of sales/supply, which ultimately equips them to generate more value for their organization and become more efficient and effective.

Some other notable benefits associated with e-auctions for retail businesses include:

  1. Big data. The potentials for big data have become evident in all areas of business and the case is also the same for the retail businesses. Businesses that capture and analyse the huge amounts of data generated around shipment and transport will continue to improve efficiency. Companies that take advantage of collaborative solutions to process and analyse this data will reap the benefits of cost reduction, capacity control and risk management.
  2. Responsibility and traceability. As businesses expand globally, they are realising the need for transparent and traceable sales and supply chains. Businesses will continue to put their global these chains in the hands of a safe and secure IT platform.
  3. Digitisation of the supply chain. Supply chain analytics will allow businesses to create useful key performance indicators and incubate innovative ideas to successfully manage service levels. Daily monitoring, sharing, and interpretation of analytics will help businesses plan.
  4. Product Specification: Another key benefit of e-auctions is the early focus on requirement specification. The latter forms the basis of any successfully run e-auction and ensures that suppliers are aware of exactly what they are expected to provide. This transparency is beneficial to both parties and will help ensure a sustainable client/customer relationship.

However, there are still a few specific challenges retail companies face today which include:

  1. Getting the most value out of every part of the procurement process and ensuring an alignment between the results and overall business goals
  2. Navigating mega market trends: consumer demand for product transparency, empowered and well-researched consumers, health and safety issues and supply price hikes. These market forces are putting customer loyalty and brand reputation at stake and pushing retail businesses to rethink the way they source and bring products to market.
  3. Creating an enterprise-wide sourcing program in order to create a more efficient and unified supply process
  4. Maintaining an independent self-sufficient sourcing and procurement department

HOW TO IMPROVE COMPETITION WITH FEW SUPPLIERS

The use of on-line auctions (e-auction) has increased rapidly in the last few years. Since they came onto the purchasing scene in the late 1990’s through the development of internet-based applications but just like with every other breakthrough events and technologies, e-auctions too come with its attendant risks and it is important that buyers and suppliers understand what these risks are so as to mitigate against its effects. Some of these risks are;

  • Bids not having enough qualified and competent suppliers;
  • suppliers not being able to demonstrate the overall value of their product or service and
  • Oversimplification of requirements to ‘fit the system’.

Without effective change management expectations may never be reached and inexperienced suppliers may bid below a sustainable price which makes the entire process unattractive to qualified and competent bidders. If a supplier suffers from a bad e-auction experience, then it is likely they may be reluctant to enter into the process again. Try to make sure that before rolling out an e-auction programme, the process is as fair and transparent as possible and has been approved by a pilot group including suppliers and that feedback from the pilot process is enacted on.

Some of the reasons why suppliers may be reluctant to participate in an e-auction bidding include;

  1. Unsuitable commodity/service – this might be an item where there is no competition in the market place, or that is too complicated to specify or largely cannot be specified
  2. Lack of competitive supply base – if a product or service does not have at least three suitable suppliers, then the e-auction process is not generally suitable
  3. Poor training of buyer/supplier – getting things right first time is imperative to build trust amongst suppliers in your company’s e-auction process
  4. E-Auction timing – If you are inviting suppliers to participate from a different country and time zone, take care that if the timing chosen to run the auction is convenient to those suppliers.

So what if you are running a bidding process and there are not enough suppliers to make the process as competitive as you would want, what do you do?

Highlighted below are some of the strategies you can adopt to find your way around that problem

1.Supplier implementation

Firstly the best good advice I can give to you is that it is important to get supplier input during the pre-bid (for example through participation in building the RFx) to ensure that they feel a part of the process. One key advantage of this is that this dampens emphasis on pricing and buyers and suppliers can focus on understanding and meeting technical elements of the bid, i.e. meeting the customer’s real needs and this can help to produce the desired results even when participation is not very robust.2.

2.Getting supplier buy-in

There is more supplier acceptance of online auctions than there once was, but still you need to tread carefully to get their buy-in. Visit suppliers or invite them to briefings to explain carefully the principles not just of auctions, but more broadly of online sourcing. They will have concerns, but they will have useful input too: they know their businesses better than you do, and what they tell you will help you optimise your strategies for online bidding events. As a result of hard talking up front, online sourcing will help you to create precise and detailed RFQs that will improve communication and reduce business risks further down the road.

3. Driving Best Practise

In order to improve on the numbers and achieve a more competitive bidding process, a procurer needs to put some people, process, performance measurement and knowledge capabilities in place. The first requirement is a clear understanding of the supply base and the criticality of each supplier to the business. Typically an organisation can segment between strategic partners, value-added suppliers and commodity product suppliers. One will also need to build up market intelligence in order to gain a clear understanding of the dynamics of the market sectors and to define sector strategies – for example properly crafted online RFQs and RFPs can help expedite the communication between buyer and suppliers and can help drive a standardised sourcing process across the organisation.

4.Training

Lastly the importance training and retraining of suppliers as to the workings of your online procurement process cannot be overemphasized. Many buying organisations underestimate the amount of time it takes to educate suppliers in online auction tools. Suppliers with less tech-savvy sales teams may need some extra handholding through their first events, and here the assistance of the auction technology provider can be invaluable. Bidders need feel more comfortable about participating in the process especially when there is a limited number of them.

E-ihale,Elektronik ihale Uygulamaları

Elektronik ihale artık dünyada olduğu gibi Türkiye’de de etkisini ve gücünü göstermeye başladı. Hemen hemen tüm büyük firmalar e- ihale sistemi ile tedarik zincirini iyileştirip güçlendiriyor. Sadece Türkiye’de değil dünyadaki büyük satın alma gücüne sahip firmalar ile buluşma imkanı sağlayabiliyor. Birden fazla tedarikçinin bulunduğu e- ihale platformunda bütün tedarikçi firmaar birbirinin alım gücünü görebildikleri için de haksız bir rekabet ortadan kalkarken tedarik zinciri oluşturmak isteyen firma için de çok iyi bir kazanım sağlanıyor. E- ihale hizmeti veren firmalar çok iyi seçilmeli ve çok iyi bir raporlama süreci sunmalıdır ki bu sistemi kullanmak isteyen firma en iyi kazanımını sağlayabilsin.

E-ihale yöntemlerine ve uygulamalarına bakıldığında bu avantajlar göze çarpıyor. İyi bir ihale sonucunda yüksek kazanım, şeffaflık, doğru rekabet,iyi bir raporlama vb e- ihale uygulamalarında bu avantajlar sağlanırken şirketler de e- ihale yöntemini kullanarak bu uygulama ile gelişmeye devam ediyorlar. Bu sayede de e- ihale uygulamaları da Avrupa’da olduğu gibi ülkemizde de gelişerek ve hızla yayılarak büyüyor. Bu da tedarik zinciri için  en iyi fiyat teklifi anlamına gelebiliyor.

Elektronik ihale bir şirketin tedarik zincirini alımındaki en son aşamadır. E-ihale uygulamasında alım konusunun başarılı olabilmesi için öncesindeki hazırlık aşamaları büyük önem taşımaktadır. Alıcı firmanın ihaleden kazançlı sonuç alması için iyi bir hazırlık sürecinden geçmiş olması gerekir. Satın alma işlemleri sırasıyla satın alma talebinin yetkililere ulaşması ile başlar ve devam eder. Bundan sonraki adım ise idari ve teknik şartların belirlenmesidir. Alım sürecinde hizmeti belirlenen şartlara göre tedarik edecek ve tedarik zincirini oluşturacak firmadan ilk teklifler alınır. Bu süreç ile e- ihale uygulaması devam eder. Tedarik zinciri oluşturmak isteyen firmaların ihalesine yapılan bu teklifler değerlendirildikten sonra e-ihale sürecine geçilir.  Alımın e-ihale ile sonuçlandırılması içi uygun koşulların sağlanması ve kazancın bu uygulama çerçevesinde olması son derece önemlidir. E- ihale sürecine dahil olacak firmalar ile teknik bilgiler eksiksiz ve eşit şekilde paylaşılmalıdır. Eksik bilgi ve yanlış bilgi ihalenin başarısızlığına neden olabilir. Bu yüzden iyi bir elektronik ihale hizmeti veren firma ile çalışmak önemlidir. Tedarik zincirini satın almak isteyen firma tekliflerini hep belirli düzeyde yapmalıdır. Yani verdiği teklifler arasında uçurum var ise bu olumsuz bir sonuçlanmaya neden olacağı için başından beri verdiği teklifte istikrarlı sürekli artan ya da azalan bir teklif sunmalıdır. Satın almayı isteyen firmalar arasında kalite, içerik ve teknik açıdan eşitlik olması söz konudur. E- ihale uygulamasında şartlar her zaman eşit olmalıdır.

E-ihale uygulamasının başarılı olabilmesi için aynı zamanda da tedarikçi firmanın yani ihaleye katılacak satın alma gücüne sahip olan firmaların sayısının yeterli olması gerekir. En az iki firma ile ihale yürütülmelidir ki iyi bir rekabet ortamı sağlanabilsin ve tedarikçi firmalar eşit şekilde rekabet ederken alıcı  firma da kazanımını sağlayabilsin. E-ihale uygulaması son bulduğunda ve ihale sonuçlandığında alımı gerçekleştiren firmanın kararını tedarikçi firmalara bildirmesi, bir sonraki alım süreçlerini de etkileyecektir. Kalite buna göre artacak ve e-ihale sistemine talep de buna doğru orantılı olarak yükselecektir.

E- ihale uygulamalarında satın alma güçlerini kontrol edebilmek ve adil bir rekabet platformunda satın alma gerçekleştirmek firmalar için büyük avantaj sağlamaktadır. Firmaların e-ihale uygulamalarında kazanım sağlayabilmesi yine belirtilen kriterlere uyması ile olabilir. Yine de dünyada ve  Türkiye’de bir çok büyük şirket tarafından uygulanan bu yöntem doğru yol izlendiği taktirde asla kaybetmeye olanak vermeyecektir.

E- İhale ,Elektronik İhale Nedir?

Artık günümüzün en popüler kullanım ağı internet. Bütün işlerimizi gördüğümüz  ve bütün ihtiyaçlarını karşılayan en büyük mecra diyebiliriz. Sadece çok büyük uluslararası şirketler değil aynı zamanda orta seviyede hatta yeni kurulumunu tamamlamış şirketler bile artık görüşmelerini internet üzerinden güvenceli şekilde gerçekleştiriyor.

Şirketler hakkında bunlardan bahsettikten sonra E-ihale sisteminden de bahsetmek lazım.

E-ihale yine yukarıda belirttiğimiz gibi şirketlerin zamandan kazanmak ve satın alma işlerini hızlı şekilde birçok tedarikçiye ulaştırmak amacı ile oluşturulan bir platformdur. En büyüğünden en küçüğüne kadar tüm şirketler bu elektronik ihaleye katılabilir ve fiyat teklifinde bulunabilir. Satın alma yapan firmalar kazancını kaybını çok iyi hesaplayabilir.E-ihale platformunun en büyük yararı ise zamandan büyük kazanç sağlamasıdır. Zamandan kazanç bir şirket için çok büyük avantaj anlamına gelmektedir. Aynı zamanda ulaşabileceğinizden fazla şirkete satın alma işleminde ulaşabilirsiniz. Çünkü bütün tedarikçi firmalar sizin elektronik ihalenize bir bilgisayar ile ulaşabilecektir.

Günümüzde e-ihale yöntemini kullanarak işlerini geliştiren bir şirkete örnek verecek olursak, şirket bu yöntemin bütün tedarikçilere adil bir rekabet ortamı sağlandığını da açıklıyor. E-ihale yöntemi  sadece birkaç saat bazen de 10 dk gibi kısa sürede gerçekleştirebiliyorlar. Bu yüzden teknolojinin avantajlarını çok iyi kullanmayı başarabiliyor. E-ihale yöntemi ile tedarikçilerinize adil bir satınalma ortamı oluşturabilirsiniz.

Elektronik ihale platformunda rakipler birbirlerinin fiyatlarını ya da sıralamalarını görebildikleri için kendi fiyatlandırmalarını da düzeltip değiştirme imkanı bulabiliyorlar. Bu sayede Tedarik Zinciri’ni oluşturulmasını isteyen firma için büyük mali kazanç meydana geliyor. Bütün firmaların satın alma fiyatını görmek ve bunu bir platformda düşünerek süzgeçten geçirmek önemlidir. E-ihale yönteminde tedarikçi  firmalar ihaleye verdiği teklifi görebiliyor. Her şey büyük bir şeffaflık içerisinde gerçekleşiyor.

Yurtdışıda oldukça yaygın olarak kullanılan elektronik ihale Türkiye’de henüz istenilen seviyeye gelmedi gibi görünüyor. Tüm şirketler kendi büyümelerinin daha hızlı olmasını istiyorsa elektronik ihale yöntemine uyumunu da hızla oluşturmalıdır. Bu sayede gelişim ve kazanç sağlanabilir. Avrupa’da ve Amerika da  şirketlerin  yoğun olarak kullandığı bir sistem e-ihale yöntemi.

E-ihale yöntemi ilk olarak 2002 yılında başladı. 2006 yılında ise büyük ölçüde gelişimini tamamladı. 2008 yılındaki büyük krizden sonra ise artık tamamen yaygınlaştı ve şirketler tarafından kullanılmaya başlandı. Çünkü dediğimiz gibi amaç büyümeyi ve maddi kazanç devinimini hızlandırmaktı.  Dünya’da ve Türkiye’de profesyonelleşmiş şirketler e-ihale sistemini kullanmaya başladılar.  Bu şirketler tedarikçi firmalar için e-ihale hizmeti sunuyor ve ortamı oluşturuyor. Bu konuda danışmanlık almak, profesyonel  kişilerden eğitim almak da öneli bir konu haline geliyor.

Bu platformda ihalenizi açmanız için e-ihale hizmeti alacağınız şirkete bilgileri vermeniz yeterli oluyor. Artık ihale gününü bekleyip ihale sonucu size ulaştırılıyor. Sonrasında ise gerekli adımlar izlenerek ihale sizin için kazançlı olarak sonuçlanıyor.

E-ihale yaratmak istediğiniz zaman ilk olarak şartnameleri ve e-ihaleye katılmasını istediğimiz tedarikçilerin listesini e-ihale hizmetini aldığınız şirkete bildiriyorsunuz. Tedarikçiler belli bir tarihe kadar şartnameleri inceliyor ve e-ihale için tekliflerini hazırlamaya başlıyorlar. Daha sonra belirlenen tarih, ve saatte e-ihale başlıyor. Yeni bir teklif revizyonu gelmemesi durumunda ihale sonuçlanıyor. Şirket tarafından ihale size raporlanıyor.

E-Auction in the cloud system

E-Auction in the cloud system

Cloud computing has recently emerged as a new computing paradigm that enables prompt and on-demand access to computing resources. This is exemplified in Amazon EC2 and Microsoft Azure. Cloud providers invest substantially into their data centre infrastructure, providing a virtually unlimited “sea” of CPU, RAM and storage resources to cloud users, often assisted by virtualization technologies. The elastic and on-demand nature of cloud computing assists cloud users to meet their dynamic and fluctuating demands with minimal management overhead, while the cloud ecosystem as a whole achieves economies of scale through cost amortization.

Cloud computing is usually large-scale, distributed computing leveraging Internet-accessible data centres that provide computing resources as cloud. Modern Internet applications are designed using the virtualization technology in the cloud computing environment. Such cloud-based Internet applications are deployed on virtual machines (VMs), also called instances whose resource requirements are pre-configured.

Latest developments in cloud computing technologies have enabled a plethora of cloud based data storage services (e.g., Amazon S3 [1], Dropbox, Google Drive, SkyDrive et.c.) Cloud storage service has gained widespread recognition and adoption by Internet users, many of whom now routinely execute online storage and online backup tasks over the cloud.

In similar vein cloud based auctioning is becoming increasingly important as part of the strategic sourcing process because this allows you to track all aspects of an e-auction, including actions taken by both sellers and bidders. This automated auction processes puts companies ahead in time and also simplifies the entire cycle of activities. Some of the great features of a cloud based auction system include;

  • No investment is required for cloud based E-auction.
  • It’s a Pay per use utility
  • You can prepare, manage and end auctions on it.
  • It allows you to run an auction via the web and podium simultaneously.
  • It reports cost implications, cost reductions etc, and lots more.
  • Return on investment is high
  • Cost is based on yearly license

Usually, a cloud based auction system manages the entire auction process. This makes it simple to set up online auctions which are intuitive to use by both buyers and suppliers, meaning that little training is required. Auctions can be open to all verified suppliers or focused on specific groups. Buyers and sellers can monitor their auctions in real time via an online dashboard. This is accessible in the office and on the road via tablet and smart phone. cloud based auctions also features a bidding timer which counts down until the auction ends. All parties can see the competitive bids as they are made via graphical and tabular displays. Suppliers execute their bidding strategy online, choosing when and how much to bid in relation to their competitors, until the auction ends and closes to inputs.The system also documents the auction process and keeps an audit trail to ensure your organisation can answer any retrospective queries or challenges.

Pay per use utility in the cloud system makes it suitable for experimenting on how it can accrue benefits to the business before it is fully adopted. In most cases buyers can test the functionality through demos, which are generally free for one time e-auction, allowing users to practise creating an event prior to purchasing a license.

Despite these numerous benefits associated with cloud based auctioning, the system is still not without its shortfalls and the two most significant of these are:

  • Firstly, the storage service highly depends on centralized data centres in the cloud, accidents and natural disasters (fire, earthquake, power outage) will have significant impact on the service performance.
  • Second, the cloud storage providers face significant cost in purchasing or renting real estate, cloud infrastructures, hardware, power and network bandwidth.

CONCLUSION

Buyer-assisted cloud storage is emerging as new, exciting hybrid architecture for online storage systems that represent a potential win-win solution for both cloud storage providers and cloud users. Online procurement auction for resource pooling by the provider which serves as a financial catalyst for bringing buyer-assisted cloud storage into reality is gradually becoming the norm. Procurement organisations that want to create a structured process around eAuction must adopt this system in order to stay ahead.

Things Bidders and Suppliers want to Know from Buyer

So you’ve been asked to participate in an e-sourcing event. Now what?

Whether you’re new to e-sourcing or have plenty of experience, every e-sourcing invitation represents a valuable chance to help your business succeed. By participating in e-sourcing events, you can:

  • Win new contracts
  • Grow existing accounts and strengthen customer relationships
  • Gain crucial visibility with targets and prospects
  • Get a clear sense of what competitors offer and a better grasp of your market position
  • Level the playing field with sellers of all sizes
  • Hone your value proposition to capture follow-on business

Bidders/Suppliers are without doubt very essential to almost every business. Without raw materials to make what you sell or manufacturers to provide what you resell, you will have a tough time growing. There are also many supplies and services your business consumes as part of general overhead, from paper clips to Internet access. In some cases, this relationship can go beyond the usual bid and supply of goods and services you need to do business. Bidders/ Suppliers can also be important sources of information, helping you evaluate the potential of new products, track competitors’ actions and identify promising opportunities e.t.c. Suppliers can turn into partners, helping you cut costs, improve product designs and even fund new marketing efforts. Hence, selecting good suppliers and vendors should be a major part of your growth plan, and so procurers need to roll out efficient and transparent selection processes in order to attract participation from the best suppliers in the market who are most likely going to provide the best value for money spent.

It is therefore essential that suppliers understand the changes and requirements needed before moving forward with any new procurement process or technology. Allowing your supply community to adapt to and embrace the potential benefits for themselves is a sure way to a smooth implementation.

Some of the best practices to be adopted on proactive supplier adoption include:

  • Finding suppliers that are open to technology
  • Effective and open two way communication
  • Ensure that your suppliers are familiar with new processes and tools

The need for effective Communication with Bidders/suppliers cannot be overemphasised. This is will amongst many others help to curb or completely avoid supplier resistance.

Every   e-auction event should;

  1. Clearly communicate the rules of engagement at the start to all concerned and ensure to stick to those rules
  2. If changes are required, communicate openly to all participants
  3. Only allow credible suppliers to participate.
  4. Do not allow separate deals outside of the established process
  5. Inform all participants within the agreed timeframe of the outcome
  6. Unbundling of lots is not allowed unless this is clearly specified upfront
  7. Ensure simultaneous availability of information to all participants
  8. During the Bidding/evaluation process to follow the parameters of the RFQ.

We have also seen that for those categories where auctions are applicable, the use of online auctions typically bring additional savings. Auctions move the negotiation from a buyer driven competition to a supplier driven competition. In defining if a category is suitable for e-auctions, answers need to be provided to the following questions in order to ensure that bidders/suppliers are being carried along. These questions include:

  • Product/Service: are the requirements easily specified?
  • Value: is the package being considered for auction of sufficient size to attract competition for its delivery?
  • Market competitiveness: supply base, market evolution, and commodity traded category?
  • Position of the buyer in the market: Buyer/Supplier dominance in the relevant market?
  • Ease of Implementation: existing contracts still ongoing, extensive supplier certification required, etc?

Although buyers are often concerned that the auction sets up the wrong dynamic for a supplier relationship, in many respects the supplier finds the approach beneficial too. From the start the process is more clearly defined and expectations of suppliers are easier to manage. Less time is absorbed in the selling process. Suppliers are able to benchmark against their competitors and understand how competitive their bids are; and they genuinely know where they stand relative to other Organisations. Suppliers should share the same level of information on the process that is being followed and this creates a level playing field for all. Below are some of the typical questions that would run through the mind of a Bidder/supplier before choosing to participate in the process;

  • Why use an electronic E Sourcing system?
  • What do I need to access the system?
  • When are you introducing this system?
  • What do I do when a tender is issued?
  • What if I need further assistance.
  • Will I be able to return a hard copy of my submitted tender? e.t.c.

 CONCLUSIONS

Competitive bidding has traditionally been the best option for project sourcing initiatives. More recently, spend management / strategic sourcing systems have offered a reverse bid auction process that has worked well for commodities but not so well for the sourcing of services. CPBID Technologies, creator of Total Bid, has developed a process and method for automating the bid process but also optimizing savings. To date, the Multistage Bidding platform has been used for thousands of projects representing the energy, healthcare, financial, grocery, office, education, and retail industries, saving these clients millions of dollars every year.

Understanding the Basic Procedures Involved in E-auction software

In every e-auction software or electronic auction event, bidders and auctioneers conduct business on an electronic marketplace. The process is quite simple. The main requirement is an auction site. Commodities, goods, or services are offered by the auctioneer, and bids are submitted by anyone who is interested in the product. The offer is usually given for a limited period only. Buyers and suppliers utilize this platform to negotiate terms of contract. The interactions available include business to consumer, business to business, and consumer to consumer.

Despite widespread practice and participation from members of the buying public and the community of sellers, there are a few recognized limitations of e-actions. There are issues related to security and the possibility of fraud. Moreover, the process has a long cycle time. Concerns about auction software and equipment for buyers also arise periodically

What are the basic types?

There are two major types of e-auctions, namely forward auction and reverse auction. The more common practice that occurs online nowadays falls under reverse auction. This procedure involved reversal of the typical roles of buyers and sellers. Instead of a single seller offering a product or service to competing buyers who bid the price upward, which is what forward auctions are all about, the prices decrease as sellers compete to obtain something that they covet from a buyer. The sellers try to undercut each other and this is why prices get lower as the process continues, instead of getting higher.

What is a traditional RFQ or request for quotation and how is it relevant to e-auctions?

Purchasers need to accomplish a document known as the RFQ or request for quotation so that they can obtain offers for products or services. The data included in this document are item price, terms of delivery, and other relevant conditions surrounding the specific product. Essentially, the RFQ is a document that must be submitted by an organization to suppliers as a means of eliciting quotations.

Traditional RFQs are still used; however, the procedures associated with these documents are often tedious and labor-intensive. Online RFQs are preferred because they are easier to process and less prone to error. They are also more efficient. A request for quotation is a solicitation document is necessary in both a negotiated purchasing process and in a firm-bid purchasing process. If the requirements are more complex, another document must be used, and this is known as the RFP or request for proposals.

In the dynamic bidding process, activation of the RFQ is the signal for suppliers to submit their bids. While the RFQ is active, the initiator has the prerogative to review the current bids. The alternative option is to wait until all the bids are received. Bid evaluation for simple RFQs may be conducted online. For complicated RFQs, the evaluation is usually done offline. The RFQ process is completed only when the winner of the bid has been determined.

E-auctions are increasing in popularity these days since both businesses and consumers find the process advantageous for them. Other terms used interchangeably with e-auction are e-sourcing, sourcing event, procurement auction, and e-procurement.

eSourcing and eProcurement Software, Don’t just buy it, Use it!

We all have different criteria for what we think deserves our money. If your goal is to save any money at all, however, one rule can always help: if it’s going to end up in a junk drawer or cupboard, just don’t buy it. Most organisational change programmes fail to achieve all of their objectives. There’s no single reason for this – lack of leadership, poor planning and unreasonable timescales can all contribute. But often the failure comes down to taping into the inability to engage the workforce or senior team (or both) with the change. And this often boils down to poor communication.

For eSourcing devotees, the benefits of using eSourcing are well known. eSourcing has a long and proven history of providing improvements in savings, efficiency, cycle times, transparency and compliance. However, there are still parts of your business that haven’t “seen the light” such as exposure to the benefits of eSourcing tools and techniques. Resistance to e-Sourcing can be reduced by clearly communicating the shift to a collaborative sourcing technique with a focus on process transparency and quality, knowledge sharing, interaction with stakeholders and to ensure that they follow strict rules and stick to commitments.

Given the technological advances and results reported by the eSourcing pioneers, it is somewhat surprising that these tools are still not pervasive throughout Fortune 1000 companies. Research by A.T. Kearney shows that while more than 75% of companies report that their procurement organisations have used these tools at least once, only a small fraction report using them in any significant way (Defined as more than 200 RFXs or reverse auctions per year). Fewer than 5% of companies report having reengineered their sourcing process to fully embed and leverage these tools. The story is no brighter on the sales side where only a few companies may have introduced these tools with great fanfare; they neither changed their business nor trained their staff to use them effectively. Highlighted below are some of the best practises that can enable an organisation deploy and successfully integrate an efficient eSourcing system.

Best Practises

  • Establish a centre of excellence:

Ensure to set up a centre of excellence from which you deploy eSourcing tools, starting small with highly visible pilots and very quickly training power users (rather than relying on external partners) to support other users. This helps you to invest significant time and funds towards training activities. Companies also need to design and implement a comprehensive change management strategy for how to deploy the tools more broadly while encouraging adoption.

  • Build a Meaningful governance Model:

Governance is vital to supporting and guiding a new programme, engaging stakeholders and defining the “rules of engagement” can be used to change the conversation from one of “prove to me why we should use these tools” to “prove to me why we should not

  • Design and Deploy Metrics:

Measurement is very essential. Defining targets of the programme and tracking progress against those targets ensures that these targets are translated into individual annual performance for stakeholders and sourcing team members. These metrics should go beyond tracking savings to also include the number and types of events completed, the number of suppliers and stakeholders engaged , supplier compression achieved: among others.

  • Adhere to Highest Ethical Standards:

Learn to focus on the design, deployment and maintenance of these programmes, never giving suppliers or stakeholders any reason to question the integrity of the process or how the tools are deployed. Although mistakes can happen, there should never be any appearance of unethical practises. One of the advantages of eSourcing tools is the audit trail they provide, take advantage of it!

Pitfalls

As with all change efforts, one does not often achieve success without first encountering a few failures along the way. Understanding where the potential pitfalls are and how best to navigate them can help de-risk a new programme.

  1. Say No to pay-per-use:

Charging stakeholders for the cost of the technology or the sourcing staff’s time to support the technology is a bad idea. For the most part, stakeholders view these eSourcing tools as a risky proposition to start with, so charging them a hefty fee to use them can stop the programme before it gets off the ground.

  1. Don’t wait for people to opt in:

This is a recipe for disaster. Success depends on programme metrics tied to individual performance metrics that clearly communicate expectations.

  1. Forget the Flavour of the Day:

Merely rolling out the tools and some directives on how to use them will make the programme just the latest flavour of the day. Investments should be a long term, holistic change management programme in order to encourage use and adoption of eSourcing tools.

  1. Resist supplier Push backs:

Change is difficult for most people so do not be surprised if suppliers push back and try to circumvent, postpone or eliminate the process. Companies that stood Firm in their commitment to the process and tools and invested resources to communicate this stance to their suppliers were able to get past this hurdle. More suppliers have realized that access to these eSourcing tools provide them with access to critical information needed to compete for existing and new business.

In Conclusion

The past 20 or so years have been an exciting time for procurement leaders. Companies that Invested    in eSourcing tools to automate transactional activities and negotiations in order to reduce sourcing cycle times are well positioned to take their organisations to the next level. For those that have not, and are now in the catch up mode, consistency and perseverance seems to be a big problem as regards deployment and successful integration of these tools into business procurement operations. Procurement leaders have done a great job charting a roadmap to success, identifying best practises to emulate and pointing out the pitfalls to avoid, so you don’t have any excuse why not to take full advantage. Why not get on board and see how e-sourcing tools could change the outlook of how you do business, but remember; it’s not enough to deploy it, you must see it through till the end. Don’t just buy it, ensure you use it.

Budget for eSourcing Software Solution

Budget management within an organisation can either make or break that company; without strict adherence to budget’s limits, as well as the strategic use of spending within those limits, an organization often loses money through overspending and missed investment opportunities. Inefficient budgeting often arises from a company’s failure to synchronize her budgeting efforts with their purchasing controls and this is due mainly to poor transparency between procurement spending and changing budget levels. Even when organizations use efficient procurement management strategies, these variations can cause major problems, both in back-office cost control and for the bottom line. Procurers therefore need smarter purchasing and this can be achieved through implementing an e-sourcing/contract management software and also by taking advantage of collaborative buying in order to promote an efficient and cost effective procurement system. This ensures increased control and visibility in her procurement processes.

The role of technology in the world of vendor/supplier sourcing, procurement and management is becoming increasingly indispensable. Recent advances in the world of electronic procurement and supplier management technology span many different industries. Any service or product; from paperclips to attorneys may now be sourced, procured and managed electronically.  How much of this client-supplier/vendor relationship has moved to electronic platforms however varies from industry to industry and also depends on the complexity of the services and/or products in question but in most cases, all products and a growing number of services are driven by e-sourcing software solutions. The manufacturing industry, for example, is highly engaged and to a greater extent has driven the development and sophistication of e-sourcing solutions. E-sourcing, simply put, is moving what was once a highly paper driven process onto an electronic platform.

Electronic procurement software is one of the most important tools for automating purchasing and financial processes. It facilitates electronic requisitioning, online vendor catalogs management, purchase order and receipt management, and integration with accounts payable. Its purpose is to mainly reduce the costs and time associated with manual processes, as well as to support more accurate product information and more competitive pricing. Leveraging clients’ buying power is also a prominent driving force in the utilization of procurement technologies these days, these tremendous opportunities lets you say goodbye to the traditional, labour intensive way of posting and advertising contract opportunities and RFQ’s.

Benefits of e-sourcing

Implementing an esourcing and contract management solution can bring a variety of benefits to any organisation, mainly improving procurement efficiency and reducing costs.
Esourcing significantly reduces the supply management costs by automating, simplifying and accelerating source to procure processes for goods and services. Esourcing solutions eventually increase bottom line cost savings by focusing on strengthening supplier relationships and streamlining tender processes.

Likewise, visibility into budget management is especially important for organizations with complex global operations. For example, a large corporation in the professional services industry may have dozens of smaller divisions running numerous client-funded projects, all of which are connected to the same central budget. In order for the company to run efficiently and competitively across different countries—with varying time zones and business requirements—procurement professionals and other business administrators must have complete visibility into where the company’s money is going and how successfully its budgets are being controlled.
Greater savings can also be made by public sector organisations collaborating in the procurement of goods and services. This enables the organisations to drive prices down by providing suppliers with greater quantities enabling them to reduce margins. Fortunately, today’s leading eProcurement budgeting tools are built to give organizations real-time control over how their money is spent, no matter how complex and widespread the spend allocation. Advanced eProcurement software can manage budgets in real time by fully integrating existing financial systems (such as the ERP) with requisitioning, catalogs, and Purchase order management—all in accordance with the organisation’s unique business structure and requirements. This not only allows administrators to drill down into minute budget details at a glance, it also enables them to measure and analyze the current use of their funds and strategically plan for future budget cycles.

Further Considerations

Implementing an esourcing and contract management solution can be relatively straightforward. Many solutions on the market offer a Software as a Service based solution which can be accessed from anywhere in the world with a web browser and internet connection. A hosted solution requires no additional in house IT infrastructure and reduces implementation times. These software solutions are readily available and are cost effective, even for small and medium-sized enterprises.

Managing a paper- based system is expensive, slow, hard to measure or audit, and harmful to the environment. In the e-sourcing world, the removal of paper from the billing process also helps organizations to meet their CSR commitments. Staff will also be quick to embrace tools that save time and expense; benefits offered by any e-sourcing software solution.

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