The Success of Online Auctions

Billions of pounds are tendered yearly on goods and services. Procurement like a profession has become an ever more important focus. Companies realise that these days, taken from a recession with an increase of global competition, a powerful procurement strategy can mean the real difference between profitability and receivership.

E-procurement entered the scene in the nineties with all the dotcom boom and e-markets. It required time for the real value to find light as soon as the initial surge and consolidation. One technology which emerged in assisting companies realistically and effectively at reducing cost was the opposite auction.

However, because of procurement professional’s degree of understanding of this new technology, the main approach to delivering benefits from auctions was via consultancy. Companies emerged supplying the chance of outsourcing this activity as well as their benefits originated in their skilled resource, innovative methodologies, systems and comprehensive supplier databases.

With all the general knowledge of reverse auctions vastly improved inside the procurement community with universities teaching about e-procurement within their curriculums, a growing number of procurement professionals wish to run their unique tenders via reverse auctions.

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

Thus there is a space interested in a commoditised product. Principle concept is not hard nevertheless there is a paradigm shift from ‘luxury’ based software, which takes a third party, to a commodity item that any professional buyer will use.

Through providing a mix of the above features, reverse auctions are being delivered to the next stage inside their evolution. They’re not only building on the understanding already available, however these tools could be opened up to any buyer by providing an incredibly low barrier to entry with respect to cost, usability and greatest practice.

There’s services that start out getting used only by experts, reverse auctions now wind up being commoditised. One only needs to talks about complex software for example engineering simulation, that is moving from the hands of engineers towards the CAD Jockeys, or web site design and appearance engine optimization tools which began using a plethora of specialized agencies but you are now to consumers. Accountancy and CRM solutions has progressed to the web model such as Clearbooks and Zoho opening complex applications towards the SME market. This can be the natural continuing development of software in our technological age.

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