The answer to this question is simpler than most would offer as an answer. Some might answer that it is savings, some might answer that it is cost avoidance. Both are a nice end result.

This author?s answer however is that without what I believe to be the primary answer the first two answers won?t happen. At least they won?t consistently.

A lot of work goes in to building and hosting a reverse auction. The people conducting that work are known as knowledge workers. At least that is my point of view. What they are building is content that supports the entire procurement process. Without the adequate content and easy access to it, suppliers can not properly bid without putting themselves at risk and buyers can not buy without putting themselves at risk. A primary risk to the above mentioned benefits of savings and cost avoidance is that the low quote you received might not be honored for a variety of loopholes created by a lack of adequate content.

The process begins with properly assessing a companies needs and documenting them properly and then targeting suppliers that have offers that match those needs plus some. Surprisingly, many buying organizations do not even have this content for their existing suppliers let alone access to new sources of supply. In many cases contact information is not up to date which can include simple data such as names, phone numbers, email addresses, payment processing addresses and the like.

Ask your solution provider to detail the content they collect for a reverse auction and to show you how both buyers and suppliers can access that information before, during and after an auction in order to insure that what you are offering for bid is what they are bidding for.

We look forward to and appreciate your comments.