The Success of Online Auctions

Huge amounts of pounds are tendered each year on services and goods. Procurement being a profession is now an ever more important focus. Companies recognise that in these times, appearing out of an economic depression with increased global competition, an effective procurement strategy often means the main difference between profitability and receivership.

E-procurement entered the scene from the nineties together with the dotcom boom and e-markets. It took time for that real value to make light as soon as the initial surge and consolidation. One technology which emerged in aiding companies realistically and effectively at reducing cost was the reverse auction.

However, as a result of procurement professional’s degree of understanding of this new technology, the key technique of delivering gains advantage from auctions was via consultancy. Companies emerged providing the possibility of outsourcing this activity in addition to their benefits originated from their skilled resource, innovative methodologies, systems and comprehensive supplier databases.

Together with the general knowledge of reverse auctions vastly improved inside procurement community and with universities teaching about e-procurement in their curriculums, a lot more procurement professionals desire to run their own tenders via reverse auctions.

A number of the companies have realised this and therefore are beginning to sell their software stand alone or as a possible add-on to some larger Enterprise Resource Planning (ERP) system. Many remains expensive, cumbersome and requirements assistance in best practice and training.

Thus there is a space interested in a commoditised product. The essential concept is straightforward while there is a paradigm shift from ‘luxury’ based software, which requires a third party, to some commodity merchandise that any professional buyer will use.

By offering a mix of the aforementioned features, reverse auctions are being taken to the subsequent stage of their evolution. They’re not only building for the understanding already available, but these tools can be easily showed to the buyer by providing an incredibly low barrier to entry when it comes to cost, usability and best practice.

There’s services that start out being utilized only by experts, reverse auctions now are being commoditised. One only needs to examines complex software such as engineering simulation, which is moving from the hands of engineers on the CAD Jockeys, or web site design and look engine optimization tools which commenced with a variety of specialized agencies but they are now in the hands of consumers. Accountancy and CRM solutions has progressed to the internet model like Clearbooks and Zoho opening up complex applications to the SME market. This is the natural growth of software in your technological age.

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