A popular reverse action service from Air New Zealand is now a significant part of its fare distribution system following a major upgrade of the platform. Grab-a-Seat originally launched around three years ago and was only used ad-hoc to shift seats on specific occasions, but it did attract a reasonable following and was a useful way of offloading distressed fares.
Air New Zealand has now taken the plunge and relaunched the system as an always-on service, meaning there is a ticket deal available through reverse auction every 15 minutes, 24 hours a day.
What do you think? Is this an effective way for Air New Zealand to create efficiencies in ticket sales?
Article from the Reverse Auction Research Center, David Wyld.
Earlier this week eBridge ran an auction for a regional bank for the purchase of ATM machines. The bank needed to purchase 20 new machines to comply with new ADA standards.
Due to internal software integration, the company solicited two vendors of these highly specified machines. During the auction event the two suppliers place one lowering bid each, for a total of 4 bids throughout the course of the 30 minute bidding event. Although the bid was not very active by eBridge reverse auction standards, the customer was floored by the results.
Because this is a community bank, any savings and efficiencies the bank creates in procurement directly affect its ability to enrich its local community. At the conclusion of the event, the customer was very pleased. But don’t take it from us! Here’s what the chief procurement officer had to say:
“That was some really cool stuff today. I know Jim thought it could have been more exciting but believe me, we were thrilled. I can’t imagine how an “exciting” one would be…I’m touting this as a $400,000 savings. Covers my salary for several years. Thanks again!”
Below is a link to a recorded audio interview discussing IT success and failure from a CIO perspective. It includes discussion of collaboration and knowledge sharing on the subject between Mike Krigsman from ZD Net’s blog “IT Project Failures” and Mike Gammage, consultant for consulting firm, Nimbus Partners
The Holmes Report recently published an article about GSK (GlaskoSmithKlein) using a reverse auction to streamline the organizations’ agency expenses.
“The pharma giant asked as many as 40 agencies that comprise the roster to take part in the online process, which ranks agencies according to their proposed costs for different services. The roster, which oversees at least £5m in fees, is believed to include such agencies as Ogilvy Healthworld, Chandler Chicco, Huntsworth Health, Waggener Edstrom, Weber Shandwick, Red Door and Virgo.
The GSK reverse auction comes after the company ran a similar exercise last year to refine its European PR roster from 20 agencies down to 10. “The process is not dissimilar from other big pharma companies,” said one source from a participating agency. “As an industry we can moan about it, but it’s a reality.”
While GSK maintains using the reverse auction has helped them, participants feel the process “treat[s] PR like paperclips and printers,” in a bid to drive down expenditure.
A spokesperson for GSK rebuttals, saying “It’s not a Tesco-esque bullying of the little guy,” added the participant. “The real question is – is there business once you’ve gone through that? There should be some level of guaranteed business.”
What do you think? Is agency work appropriate for the reverse auction?
In a blog post by Anne Field of Register Rep, the author writes about the importance of communication and collaboration when implementing a change and then offers practical tips for adoption.
From the post:
You know what they say: The one constant is change. That said, there’s another eternal truth: The one constant about change is that people hate it. And since your employees undoubtedly are people, you can expect that they, also, feel uncomfortable when facing the prospect of a disruption to their routines. But that can make it very difficult to try to introduce changes, large and small, into your practice. We’re talking about anything from a new CRM system to an all-out revision of strategic direction. Making matters even trickier, according to Daniel Crosby, an organizational psychologist in Huntsville, Ala., who specializes in change management for financial advisors, the natural inclination for many results-oriented advisors is to move at top speed, completely ignoring the time-consuming spade work they might need to persuade their staff to get on board.
Trouble is, if your employees don’t embrace whatever change it is you want to introduce, you can forget about it: You won’t succeed. “Trying to make a change without staff buy-in is a recipe for disaster,” says Crosby.
Still, introducing change is quite doable if approached with sufficient finesse and patience, as Story discovered. “Change is a process,” says Crosby. Understand what’s involved and you, most likely, can make just about any change stick.
First place to start is a reality check. That means acquiring an understanding that you and your employees might regard a specific change very differently—and that you need to respect their point of view.
Like any sale, however, introducing change ultimately is about convincingly demonstrating the benefits of whatever you’re pushing. In other words, you need to show employees how the move will help them and the practices do better. “When people are well-informed and understand the decision, change is much easier,” says Palaveev. In some cases, that might take some doing—but the effort is essential.
After you’ve made your case, then you have to persuade employees they have a stake in the outcome. And you do that by, as the jargon goes, getting them to assume ownership of the change. Best is to identify the people directly affected by the change and incorporate them into the decision-making process.
By getting employees involved in the decision-making process, you also can save time in unexpected ways.
How are you including your employees in decision-making processes, particularly when it relates to new procurement processes?
From renewable energy credits to frozen turkeys just about anything can be run through the reverse auction. And now a young lawyer named Robert Grant Niznik has developed a website that allows individuals to post their cases online and lawyers then bid on the cases via a reverse auction.
Some in the legal industry oppose the idea, calling the site the “eBay of lawyering,” and argues the reverse auction style service will lower the integrity of the legal profession.” But Niznik argues that “the site enables attorneys to expand their client base and gain credibility” and that “lawyers have nothing to lose and “everything to gain” from joining the site.” He adds that “financially challenged clients who ‘get turned away from legal aid’ can use the site to obtain affordable legal advice”, as supported by an ABAJournal.com post last year describing how many in the middle-class are stuck in legal limbo because they make too much money to qualify for legal aid, but not enough to afford an attorney.
What do you think? Do you think it’s an appropriate and respectable to market legal services? What are the advantages? Disadvantages?
Interesting read from Supply Chain Review about the rising interest in demand for procurement solutions- including reverse auctions.
Large enterprises are back in the market driving big deals, while mid-market firms are implementing sophisticated procurement systems for the first time.
Cloud computing is behind most of the positive trends in this market, including increased adoption, improved collaboration and new forms of application functionality.
I expect 2011 will be a strong year for the procurement systems market.
Reverse Auction Success Story: Even very large companies are engaging our services
eBridge recently engaged with a Fortune 500 company that had used reverse auctions in the past, but experienced limited success because their purchasing team was not fully engaged in the process and nor were their suppliers.
Knowing the reverse auction procurement process is now a best practice and that they needed to adopt it into their procurement strategy, they began looking for new reverse auction software solutions to purchase.
eBridge presented our full service solution and it resonated with them. They saw that there was no software to purchase and maintain nor extensive internal training and that eBridge would immediately come along side their team to deliver a fully managed reverse auction process for them. They valued eBridge’s leadership in the process in addition to the years of reverse auction experience to help them make the process change internally and to their supplier base.
When asked for their feedback, the senior procurement officer provided the following tangible results of implementing eBridge’s reverse auction services:
– A more efficient procurement process
– An expanded supplier base
– Knowing we are buying “at market” in every transaction
– Innovative technique has energized our purchasing team
– Pocketing an extra 10-15% to our bottom-line
A few weeks ago I wrote a post entitled, Organizational Change and Reverse Auctions. It stated “organizations don’t change, people do or they don’t”.
Expanding on the topic of the individual’s role in change management, the Change Management Learning Center states, “The essence of change management is encouraging and enabling individualtransitions resulting from a project or an initiative. Because change happens one person at a time, change management provides a critical component for achieving project outcomes and results.”
When applied to the reverse auction, organizations will not realize the efficiencies of the new technology if individuals are not challenged to do his or her job in a different way. The reverse auction is not a big change, but it is new technology and management is asking employees, as individuals, to do their jobs slightly different to yield greater results.
This makes having an effective change management strategy that focuses on the individual in your organization essential to affecting change and sustaining change.
How are you focusing on the individual to take advantage of new opportunities for your business?
The debate on American’s dependence on foreign oil is not a new topic. For years Americans have debated opening up ANWAR and other domestic oil producing sites to help decrease our dependence on foreign oil. But in recent months the debate has been magnified due to the unrest occurring in Libya and other major oil producing countries overseas.
Last week the Weekly Standard wrote an article discussing legislation that U.S. Representative Devin Nunes’ (R-CA) rolled out called “A Roadmap for America’s Energy Future”.
According to the Weekly Standard, one key insight the legislation hinges on is “advances in energy efficiency are often inextricably linked with energy production.” As a result, if the US opens up domestic resources, Nunes proposes that “any profits the government makes form increased domestic energy production would go into a trust fund for renewable energy sources, as well as new research and development.”
Nunes further suggests using reverse auction technology to disperse the newly created trust fund monies. Companies would compete in a free market environment on energy contracts, based on who can produce the most energy for the least amount of money.
What do you think? Do you think his proposals will help America be more efficient in creating renewable energy sources?