The Potential of Online Auctions

Immeasureable pounds are tendered each year on services and goods. Procurement being a profession has become a progressively more important focus. Companies realise that in these times, coming from an economic downturn with additional global competition, an effective procurement strategy can often mean the difference between profitability and receivership.

E-procurement entered the scene inside the nineties with the dotcom boom and e-markets. It had time for the real value to find light following the initial surge and consolidation. One technology which emerged in aiding companies realistically and effectively at reducing cost was the reverse auction.

However, due to procurement professional’s level of knowledge of this new technology, the primary method of delivering gains advantage from auctions was via consultancy. Companies emerged supplying the chance for outsourcing this activity and their benefits originated their skilled resource, innovative methodologies, systems and comprehensive supplier databases.

Using the general comprehension of reverse auctions vastly improved within the procurement community with universities teaching about e-procurement in their curriculums, increasingly more procurement professionals need to run their particular tenders via reverse auctions.

Some of the companies have realised this and so are beginning to sell their software standalone or as a possible add-on to some larger Enterprise Resource Planning (ERP) system. This software continues to be expensive, cumbersome as well as assistance in best practice and training.

Thus there is now a niche searching for a commoditised product. The fundamental concept is simple while there is a paradigm shift from ‘luxury’ based software, which requires a alternative party, with a commodity merchandise that any professional buyer may use.

By providing a combination of the aforementioned features, reverse auctions are being taken to the next stage inside their evolution. Not only are they building on the understanding already in the marketplace, but these tools could be showed to any buyer by offering a very low barrier to entry with respect to cost, usability and finest practice.

As with most services that start being utilized only by experts, reverse auctions now wind up being commoditised. One only needs to examines complex software like engineering simulation, which is moving through the hands of engineers for the CAD Jockeys, or web page design and search engine optimization tools which began having a variety of specialized agencies but they are now to consumers. Accountancy and CRM solutions has progressed to the net model such as Clearbooks and Zoho examining complex applications on the SME market. This can be the natural growth of software inside our technological age.

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