It’s always an interesting concept running a market analysis survey.
As a software provider, we need to know how many of our target market are currently using a product similar to ours, or if they are currently looking for one. If they’re not doing either, then why aren’t they?
We now have an array of Market Dojo products, however we were keen to find out whether reverse auctions are currently being utilised fully in the world of procurement.
We asked 150 randomly selected Procurement Professionals a few questions on reverse auctions. Here are the results:
This doesn’t come as a huge surprise as eSourcing as a whole is still a relatively new concept to many Procurement teams. The benefits of eAuctions and specifically reverse auctions are clear to see when used, but many are still hesitant to take the leap to a centralised digital platform. The reverse auction process gives the host a great way of driving down supplier costs by starting at a current, or lower price, than what is currently being achieved and then having this driven down by competitive bids. A simple conclusion and general consensus within the world of procurement, would be to suggest that many companies are simply unaware of the benefits of eauctions and this is the reason for so little of the audience currently running reverse auctions.
To tackle the uncertainty around eAuctions as a whole, we recently ran a Webinar, “Is it time you questioned eAuctions?“, which was targeted at new users to eAuctions, as well as those already aware and using them. The concept was to introduce eAuctions to those unaware and the best practices for those already utilising them.
As part of the webinar, we also ran a form for all attendees to fill out prior to attending. The form consisted of the obstacles to running eAuctions and those who signed up were offered the chance to ask any questions they would like answered during the webinar. Below are the questions we had highlighted by attendees. If you have any similar questions, we highly recommend giving our webinar a watch here.
Interestingly, despite only 20% of the audience currently running reverse auctions, only 23% answered ‘no’ when asked whether they would consider them. Meaning out of the 80% that aren’t currently running eAuctions, a high percentage are likely still open to them.
This could be for any number of reasons as we touched on above and will expand on below, when trying to target exactly why reverse auctions aren’t currently being utilised by professionals who are open to running them.
33% – Working Knowledge
One third of the people we surveyed admitted that working knowledge was the key barrier to preventing them from running reverse auctions. With the vast majority of our audience not currently running reverse auctions, this number could have been significantly higher. As a company we are proud to say our software is all fully on Demand and our Customer Service and Customer Success teams are always on hand to help. That’s if our dedicated Account Manager’s haven’t already beat them to the punch!
We have also created a number of functions in an attempt to help users get to grips quickly with our tools and better their understanding of eSourcing in general.
43% – Internal Resource
In our Barriers to reverse auctions survey we broke this section down into 4 categories: Can’t justify ROI, Lack of skilled personnel, No time to run reverse auctions & no budget for software.
In regards to budget, we elaborate below on what our solution does to assist with teams facing this barrier. By offering competitive on demand pricing with no contract, as well as the ability to run events from day one, we believe we offer the best solution on the market pound for pound.
This leads us on nicely to the point of ROI. Whether you have run reverse auctions previously or not, Market Dojo users save an average of 16% when running events.
29% – Software
The problem of not having the software to run reverse auctions, is something Market Dojo are trying to target directly, by offering clear and affordable pricing.
If you haven’t previously run eAuctions it’s understandable that as a department you might be reluctant to invest heavily into an expensive system with no guarantees. This is why we display all our prices onsite and start from as little as £500pm for a single licence.
Appreciation of the benefits 12%
Basic understanding 11%
Capability to manage the event 12%
Creating a specification 10%
Engaging Suppliers 14%
Again with 80% of our audience not currently running reverse auctions, it is of little surprise that all sections of this question had a similar outcome. Suggesting a previous lack of working knowledge. All options were targeted towards issues prior to running events, suggesting that these people hadn’t previously ever run events.
That leaves us with the 45% who elected for None/Other.
If we were to assume that the original 20% that were currently running reverse auctions, have voted for none, due to their current experience with reverse auctions. This would then leave only 25% opting for None/Other. You would typically expect a slightly higher percentage of ‘None/Other’ due to the limited options available, for example, people restricted by purely financials might have a good understanding and no knowledge barriers, however a lack of available funds to run reverse auctions. Hence them not currently running reverse auctions.
As we can see from all this data, there is still so much uncertainty around not only reverse auctions but also the use of eSourcing. What is extremely positive however for solutions such as ours, is the amount of the audience not currently running reverse auctions. Whether this be due to a lack of knowledge and understanding, expense, or that they simply haven’t found the right tool yet.
As a company we aim to eradicate any uncertainty around eSourcing by generating content online to help users. We have an array of resources within our Resources Hub, from guides, on how to use Market Dojo to run reverse auctions, to blogs, on how to convince your suppliers to take part and even what you can do to ensure best results at auction. Our Category Hub is also a great place to start for all people new to reverse auctions, as it breaks down useful information and insights, industry by industry.
If you are interested in learning more about reverse auctions or any of our other products please get in touch today to speak to a member of our team.