eBridge News
The Department of Health and Environmental Concerns for a state government utilized eBridge procurement services and reverse auction platform to purchase newborn screening forms. This highly specialized paper is used in the initial testing done on new born children.
The bid included two suppliers who placed multiple lowering bids throughout the 30-minute event. Manufacturers and distributors of this highly specialized material must be FDA approved and meet tough regulations.
During the reverse auction event, first place changed hands four times and suppliers’ final bids were less than 2% apart, indicating true market value was achieved. The final savings was 66% versus budget and the incumbent’s price was $100,000 lower than the existing contract.
This state and eBridge have an exclusive contract and have run millions of dollars through the reverse auction saving an average of 22% overall.
A national commercial freight company engaged eBridge to establish a contract for temporary labor services. The specifications outlined solicitation for three classes of workers with pricing requested for regular hourly wage rates and overtime rates for an 18 month contract.
eBridge’s procurement team worked closely with the company to create specifications that allowed multiple companies to bid on the contract. eBridge led both the buyer and suppliers each step of the process, as it was the first reverse auction experience for many of the participating suppliers.
Seven suppliers were approved and participated in the event, placing a total of 187 bids during the reverse auction. First place changed hands 21 times and first and second place suppliers were separated by a mere 0.17% indicating true market value for the labor services was found. At the conclusion of the event the buyer saved 14% versus budget or approximately $1,806,000.
eBridge partnered with a Michigan-based company to assist them in their purchase of 64,000 gallons of diesel fuel. The bid featured three suppliers, who placed a total of 250 bids throughout the reverse auction event. First place changed hands 103 times and first and second place finished within 0.04%. These two statistics showcase the competitive nature of the bid.
At the conclusion of the reverse auction, the company saved 16% versus their original budgeted amount.
The company’s purchasing director remarked, “Our organization has incorporated eBridge’s process as a best-practice in our purchasing strategy. We have run several events with eBridge and, again, have achieved great results. We can’t wait for our next bid!”
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.