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Reversing Attitudes: Why Reverse Auctions May Actually Be Good For Your Purchasing Practice

  • Broadcast in Business
Jon Hansen

Jon Hansen

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Consisting of more than 200 senior executives, the following is just a sample of the comments I received from the audience: “I do not think that buyers spend any time at all analyzing RFQ’s . . . once they have sent them out they go directly to the price auction and get on a phone and those who cut the price get the business.” “We spend too much time working on RFQ’s . . . the RFQ process chews up dollars and time for something that is going to bring us no return.” “It (RFQ’s) will have a negative effect on my business . . . we should charge the issuers of RFQ’s for responding.” These of course represent only the tip of the proverbial ice berg. There is a general perception that the RFx process is ultimately little more than an elaborate fact finding mission that is geared toward bolstering and justifying a pre-ordained outcome. Otherwise known as an exercise in decision justification. In the opening from my first book, Your Show Will Go Live in 5 Seconds, I had made reference to the above 2005 "experience" referring to it as a "pitch fork and torch" moment. I have often joked (with a certain degree of seriousness) that had they not put me at the front of the big hall where my only escape route was at the back of the room, I might have fled the podium to safety. This being said the sentiments of these senior executives from the supply-side of the auto industry were representative of the attitudes that were prevalent in terms of the introduction of eProcurement solutions such as Reverse Auctions in 2005. Move ahead to 2010 . . . have these entrenched attitudes towards Reverse Auctions changed since my perilous experience five years earlier? Joining me today to answer these as well as numerous other questions regarding what is a powerful procurement tool that for the most part is powerfully misunderstood is Dr. David Wyld from the Reverse Auction Research Center.

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