Thursday, 9 November 2017

5 Top Tips to no longer fear Reverse Auctions

This article is to help you overcome what seems to be a very scary concept to organisations - the reverse auction. Too many procurement people, or perhaps your stakeholders, the mere mention of the word ‘reverse auction’ can install huge pangs of anxiety, or even terror. There is a misconceived notion that reverse auctions are complex beasts, that only the most experienced, battle-hardened procurement professional is capable of running.

There is a common saying that “People fear what they don’t understand” so we’re here to help you and your stakeholders overcome your fear of reverse auctions. These 5 top tips are designed to tackle any feelings of fear you have towards reverse auctions, and hopefully, teach you that they are something to embrace.

Top tip 1 - Pick your initial categories strategically and prove the value

Our study into reverse auctions showed that 90% of respondents thought stakeholder buy-in was the major barrier to running reverse auctions, (Read our barriers to reverse auctions blog here). If possible, try and choose some non-sensitive categories to run reverse auctions on, to begin with. Office Supplies is a great choice for this (apologies to those of you who are very precious over the type of pen you have). Invite stakeholders to view the auction, showcase the value you can offer and hopefully it will be a springboard for success to attack some other categories.


When it comes to choosing which category to run a reverse auction on, look for those which are easy to define, has savings potential, and high liquidity (high number of capable and interested suppliers).

Top tip 2 - Sell the benefits to all parties

This tip applies to both your stakeholders and suppliers. For suppliers, in what other scenario do they have an opportunity to receive some live feedback on their competition and where they sit in the market. Typically, the only feedback suppliers will receive is what the procurement lead offers them, and this can be hard to come by.

For stakeholders, the obvious benefits to reverse auctions would be price, but there are much more. It can offer insights into bench marking as well as true Market Price. We’ve seen some reverse auctions where 5 suppliers have been within £100 of each other for a £million contract - that is true market compression. It is also a much more efficient negotiation method where you can involve multiple participants over short timescales, and with no geographical constraints.

Top tip 3 - Seek guidance from your solutions provider

Your solutions provider should have seen a wealth of eAuctions completed across their client base, across a huge selection of categories too, and are in an ideal position to help you with construction and strategy for your eAuction. Don’t be afraid to pick their brains, they’ve probably seen your category put through a reverse auction, or something very similar. At Market Dojo, we’ve seen over 10,000 eAuctions across more than 150 categories run through our tool. We want to see our clients succeed, so we offer lite strategic advice included within our licence cost, to maximise the likelihood of success.


Top tip 4 - Communication is key - get your suppliers bought into the process
I cannot reiterate the importance of communication throughout the reverse auction process.  Communication needs to be clear and consistent from start to finish and will help with any objections you have from suppliers. Explain to your suppliers why you’re looking to do a reverse auction, hold a session with all the suppliers to give them the opportunity to raise any concerns they have and take the time to give them feedback to alleviate those concerns. Inform them about the award criteria you’re going to use (see Tip 5), and ensure that your award method is consistent.

Some suppliers will have a negative perception of reverse auctions, but the way that you communicate will go along way to changing their opinion. Please do not change the award criteria at the last minute, as it will completely undermine the entire process.

Top tip 5 - You are not obligated to go with the lowest price

“We’re not an organisation which buys purely on the lowest price”  - Good because you don’t have to! There is absolutely no obligation to go with the cheapest quote within the auction. More often than not, reverse auctions are run under what’s called a ‘buyer's choice’ meaning you have free reign to award the business to whatever supplier you see fit.

Furthermore, you can actually run weighted reverse auctions, therefore combining the quality aspect to your tender with pricing in the reverse auction. This works in exactly the same way as if you were to run a weighted RFQ, but with live rankings based on a combination of price and quality scores. There is no reason to not run a reverse auction based on the objection of a price.

Don’t forget the importance of communication to your suppliers - make sure you follow through on your actions.




For more information on barriers to reverse auctions click here.


Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Monday, 6 November 2017

Misconception of Categories


There's often a misconception within procurement and eAuctioning that success with using eSourcing solutions relies heavily on the type of categories. Typically, categories such as stationery and IT equipment are thought to be more suitable for eAuctions than other complex categories. However, the auctions ran through our tool suggest differently. 

Here I have listed just a few categories which have been run through our software recently.

  • Honey and jam   
  • Condiments


  • Food can often be thought of as complex category as the specifications and health and safety regulations require careful onboarding and strict requirements from suppliers. However as shown, cupboard essentials can be run through eAuctions! So don’t rule them off too quickly, they could reap you some huge savings depending on your specification.


  • Packaging materials
  • LED lighting
  • Bar code Scanners


  • This is an easier category that is often ran through the tool. Specifications are relatively easily defined, depending on how you limit the specification. E.g. size and shape are much easier to modify, with the ability for suppliers to make this a highly competitive lot, ensuring you get the market price.

  • Fire extinguisher
  • Meat
  • Fertilisers


  • Items in this category surprisingly have been successfully sourced through eAuctions. However, tight specifications and strict onboarding protocols are essential to make this a success.

  • Gas
  • Oil


  • An especially easy category to define with a highly competitive market. However, your requirements need to be relatively sizeable to attract participants and gain substantial savings. Numerous Market Dojo clients run these categories frequently through our tool.

  • Cars
  • Boilers


  • A highly competitive market depending on specification. Potential to generate high savings if suppliers have been correctly onboarded and potentially allow suppliers to offer next best alternative. However, a company may want to stick with a particular brand, limiting your negotiation opportunities.

  • Bed mattresses
  • Garden Tools


  • These types of categories have successfully been run through the Market Dojo tool, producing high savings for many Market Dojo customers. The potential for a loose specification gives it the ability to source from numerous suppliers for increased competition and additional savings.

    The benefit of allowing users to customise their requests through questionnaires allows just about anything to be auctioned through our software. As you can see from the list, there is a variety of categories sourced through our tool. Even for more tricky categories, we offer a service to govern the onboarding processes called SIM Dojo to ensure that proper practice is met. So don't be put off running complex categories through an eAuction tool!

    If you are interested in any of the services that we provide such as Market Dojo and SIM Dojo mentioned to help run your eAuctions and govern supplier onbaording click here for more information.




    Wednesday, 1 November 2017

    New Release - November 2017

    Our regular system improvements have taken place again, and this month we have looked at Document Sharing.


    Ability to attach documents only for a specific supplier
    Documents are a really important way for our customers to share information, whether these are terms of business, product specifications or customer references, they often form a critical part of the tender. Until recently, document security meant that a Host could only share documents with Participants based on their status. All participants would see some documents, with others restricted to just the Participants who the Host had given access to the whole event. Sharing in this way, is easy and simple, however sometimes you may want to share a document with only some suppliers. Examples include co-signed NDAs, Award Letters and Signed Contracts. Previously, the only option was to do this outside Market Dojo, which meant some parts of the audit trail were not available. Sharing Now, we have changed this, so that documents can be shared with certain suppliers, or just with the other Hosts managing the event. This is an extra option when creating or editing documents:

    Sharing.gif
    Documents have a new ‘Share with’ option, where you can control who can see the document.

    Viewing
    The experience of viewing a document remains the same for Participants (either they can see a document, or they cannot). For Hosts, there is now an extra information badge, which shows who has access to this document.
    viewing.gif


    When the host views a document, they can easily see who it is shared with.

    Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

    Tuesday, 31 October 2017

    5 Top Tips to no longer fear

    👻👻👻👻👻👻👻👻👻

    In honour of Halloween, this article is to help you overcome what seems to be a very scary concept to organisations - the reverse auction. Too many procurement people, or perhaps your stakeholders, the mere mention of the word ‘reverse auction’ can install huge pangs of anxiety, or even terror. There is a misconceived notion that reverse auctions are complex beasts, that only the most experienced, battle-hardened procurement professional is capable of running.



    There is a common saying that “People fear what they don’t understand” so we’re here to help you and your stakeholders overcome your fear of reverse auctions. These 5 top tips are designed to tackle any feelings of fear you have towards reverse auctions, and hopefully, teach you that they are something to embrace.

    Top tip 1 - Pick your initial categories strategically and prove the value

    Our study into reverse auctions showed that 90% of respondents thought stakeholder buy-in was the major barrier to running reverse auctions, (Read our barriers to reverse auctions blog here). If possible, try and choose some non-sensitive categories to run reverse auctions on, to begin with. Office Supplies is a great choice for this (apologies to those of you who are very precious over the type of pen you have). Invite stakeholders to view the auction, showcase the value you can offer and hopefully it will be a springboard for success to attack some other categories.


    When it comes to choosing which category to run a reverse auction on, look for those which are easy to define, has savings potential, and high liquidity (high number of capable and interested suppliers).

    Top tip 2 - Sell the benefits to all parties

    This tip applies to both your stakeholders and suppliers. For suppliers, in what other scenario do they have an opportunity to receive some live feedback on their competition and where they sit in the market. Typically, the only feedback suppliers will receive is what the procurement lead offers them, and this can be hard to come by.

    For stakeholders, the obvious benefits to reverse auctions would be price, but there are much more. It can offer insights into bench marking as well as true Market Price. We’ve seen some reverse auctions where 5 suppliers have been within £100 of each other for a £million contract - that is true market compression. It is also a much more efficient negotiation method where you can involve multiple participants over short timescales, and with no geographical constraints.

    Top tip 3 - Seek guidance from your solutions provider

    Your solutions provider should have seen a wealth of eAuctions completed across their client base, across a huge selection of categories too, and are in an ideal position to help you with construction and strategy for your eAuction. Don’t be afraid to pick their brains, they’ve probably seen your category put through a reverse auction, or something very similar. At Market Dojo, we’ve seen over 10,000 eAuctions across more than 150 categories run through our tool. We want to see our clients succeed, so we offer lite strategic advice included within our licence cost, to maximise the likelihood of success.

    Top tip 4 - Communication is key - get your suppliers bought into the process

    I cannot reiterate the importance of communication throughout the reverse auction process.  Communication needs to be clear and consistent from start to finish and will help with any objections you have from suppliers. Explain to your suppliers why you’re looking to do a reverse auction, hold a session with all the suppliers to give them the opportunity to raise any concerns they have and take the time to give them feedback to alleviate those concerns. Inform them about the award criteria you’re going to use (see Tip 5), and ensure that your award method is consistent.

    Some suppliers will have a negative perception of reverse auctions, but the way that you communicate will go along way to changing their opinion. Please do not change the award criteria at the last minute, as it will completely undermine the entire process.

    Top tip 5 - You are not obligated to go with the lowest price

    “We’re not an organisation which buys purely on the lowest price”  - Good because you don’t have to! There is absolutely no obligation to go with the cheapest quote within the auction. More often than not, reverse auctions are run under what’s called a ‘buyer's choice’ meaning you have free reign to award the business to whatever supplier you see fit.



    Furthermore, you can actually run weighted reverse auctions, therefore combining the quality aspect to your tender with pricing in the reverse auction. This works in exactly the same way as if you were to run a weighted RFQ, but with live rankings based on a combination of price and quality scores. There is no reason to not run a reverse auction based on the objection of a price.

    Don’t forget the importance of communication to your suppliers - make sure you follow through on your actions.

    For more information on barriers to reverse auctions click here.

    Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

    Tuesday, 10 October 2017

    New Release - October 2017

    Autumn is definitely here, and we have been busy improving Market Dojo. This month we have released two features that our customers have requested. We have also made a whole bunch of improvements which are less conspicuous, but let’s focus on the headlines.


    Market Dojo - More than five questionnaires
    We have increased the limit on questionnaires in Market Dojo from five to ten! For some of our customers, this is really important so that they can gather more information about the participant's offers. This additional feature is now live so just add more questionnaires to your event as required.

    Screen Shot 2017-10-09 at 12.40.02.png
    SIM Dojo - archive and delete participants When onboarding suppliers, from time-to-time you want to remove someone from the process. This may happen because the wrong person is invited, or you are certain you will not require their services in the future.
    Now, you can do this easily in SIM Dojo. When you are viewing the decision tab for a participant, there is a new option to move them to the recycle bin. Once they are in the recycle bin, they will not be counted in reports or sent any emails. If you change your mind, then they can be restored. 
    recycle bin.PNG
    We hope you like these two improvements, and we look forward to sharing more exciting news soon.

    Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!


    Tuesday, 3 October 2017

    CPO's first 100 days by Erik Van Kampen

    Market Dojo continues its search into transforming procurement teams in the CPO’s first 100 days. This time our guest contributor is Erik Van Kampen.
    Erik is an experienced and successful procurement professional with proven success and continuous progression gained within major blue chip companies, including heading up Procurement at Old Mutual Wealth.  Erik shares his view on the first 100 days as a CPO.
    Procurement is common sense, right?  We all buy things every day, whether it’s shopping, holidays, cars or computers.  We become perceived experts in what we buy. It’s hardly surprising that when you join a new organisation, there may be differing opinions and expectations of colleagues and stakeholders about your approach and strategy.
    What did you promise you could deliver during the multitude of interviews and what do you expect to achieve? How do you assess opportunities and when do you do it? A previous boss and mentor once said to me that the first 100 days was “your only opportunity to ask stupid questions” which made me laugh at the time, but I guess has its merits.
    There is only a limited time for you to take stock before someone will ask ‘now what’. The ‘now what’ is what will shape your success, and from my experience, this is five ways to get there.
    #1 Promises
    Set the tone. Be clear about what you will and can achieve and what is needed from stakeholders to succeed. Procurement is not rocket science so don’t make it difficult for people to understand. Something that always helps me is to be clear, use plain English, and be accessible to your team, stakeholders, and key suppliers. Establishing an understanding of key contracts, areas of spending, policies and process as well as the systems that are in place would be one of the first stops.
    My natural style is to focus on relationships. People need people and while technical skills are important, unless you can relate to other people and influence them then the outcomes will not be optimal. Lastly, be honest and straight up with people. The key deliverable may be a strategy paper or roadmap focusing on aspects such as Sourcing Execution, People, Systems & Tools, as well as Policy, Process and Governance and when things can be achieved.
    #2 Leadership Team
    The most successful teams I’ve worked in have a complimentary mix of personalities, skills, and experience. You shouldn’t hire in your own likeness, nor should you be intimidated by people with more experience or a different outlook. Provided everyone is working towards the same overall objectives and support one another then you’re halfway there.
    Competition is healthy and can be good fun if you don’t take yourself too seriously.  Get to know people, their strengths, weaknesses and aspirations (personal and professional). Use the knowledge that is already in place and don’t rush into making wholesale changes just because you’re new, unless there are clear issues that need to be addressed, There are bound to be disagreements, but establish trust and respect early and avoid ‘public’ arguments when opinions differ.


    #3 Policies
    Look at what is in place. Are policies easy to understand and are they concise, or a source of frustration and to be avoided at all costs? Think about how you can make it easy for people to do business: with suppliers and procurement.  Different industries require/welcome different levels of compliance and control; use a flexible and risk-based approach.
    #4 Systems
    Procurement is evolving and technology platforms are becoming more commonplace so don’t be afraid to try things out and don’t believe that a single solution provider is the best route. Decide which aspects would benefit from integration (if any) which could mean not sourcing the best but something that does the job.
    Personally, I don’t believe that full scale automation is going to be the answer to everyone’s Procurement woes, but I do believe technology has its place.  However, the business process and data behind it must be effective and mature.
    #5 Data
    Crap in = crap out! Data relies on the input source so unless the people putting the information incorrectly, you are off to a bad start and fixing will take a lot of effort. Make sure you have skills in place to drive adoption and manage ongoing data quality.
    Data quality is key to any Procurement function. Whether the subject matter is spend data, contracts, etc. if you get it wrong you risk undermining the credibility of the function and individuals in it. Work hard to get it right and ensure resources are available to maintain it.  It is critical that sourcing and procurement teams know why it’s important and understands that they are pivotal to it.

















    Erik is currently working as an interim Market Data Procurement Consultant at Chain IQ Group, where he is engaging with key financial index providers to ensure compliance with the European Benchmark Regulation.  If you would like to reach Erik directly, you can find him on Linkedin.
    Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

    Thursday, 28 September 2017

    My First eWorld - September 2017

    Six months and here we are again, eWorld September 2017. I am sure that for the rest of the team at Market Dojo it felt like a bout of Deja Vu having gone for the past 6 years but for myself, this happened to be my first trade show since starting here earlier this month.

    Luckily, this time around we stayed in a hotel the evening before so missed the 4am start which I believe is the traditional Market Dojo eWorld routine.
    So starting the day feeling fresh at sunrise, we headed down to the QEII Centre in Westminster to set up for the day. I worked my marketing magic to make the stand look pretty great (if I do say so myself) on time for delegates arrival at 8am. 

    We had the privilege of being situated next to two of our close partners stands Provalido and Per Angusta. 

    The brilliant Claire Boffey who organises the popular event biannually, ensured all the sponsors had free bacon rolls to prepare us for the big day ahead. Unfortunately, for vegetarians like me, this meant sampling lots of chocolates from various stands which gave me the perfect opportunity to gain an insight into other competitors and procurement solutions on the market.
    I think for ‘newbies’ like myself, it was interesting to see the range of people which attend the event. Not everyone is there for new opportunity it seemed, which surprised me (just there for CIPS points!) however the ones which were, showed just how applicable Market Dojo is to the market, as many procurement teams are so stuck in old ways and could benefit massively from using a tool to eSource.

    The talk given by Interserve, our client for over a year now, grabbed everyone's attention. The representatives on the day, Kevin Davies and Mandeep Chana, Spoke about changing behaviour through technology, such a popular choice of topic that the room had to be upgraded to a larger space (We hope this had nothing to do with the “free biscuits” title given in the pamphlet!)

    Interserve gave an honest talk about their experience of implementing an eProcurement solution, explaining their hardships along the way with software, communication and processes. However choosing the right supplier was fundamental to their success, yep that's right… us (MARKET DOJO) and Per Angusta.
    Our prize draw for a free month licence for Market Dojo was drawn from a hat by Pierre from Per Angusta and Pete from our sales team. Our lucky winner this time, was Kunal Khanderia from Hilton Hotels.

    As the day appeared to come to a close, we had some of our best conversations with people who were really keen to learn more about the world of eSourcing and also some of our other products such as category analysis. This went down very well with a glass of white wine to finish a fun first day at eWorld. 
    Finally! (nearly finished I promise) before heading off back to Gloucestershire, we went for my cuisine of choice, Italian at Colosseo just a 5 minute walk from the QEII centre for some real food (by that, I obviously mean pasta) before another day back at the office! 
    If you didn’t get the chance to come to the event or missed us for any reason and think Market Dojo could have been of interest to you, don't hesitate to get in touch for more information or try out our free sandpit tool here! 

    Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!