E-auctions outcompete traditional ways of sourcing in both impact and efficiency and have a huge savings potential, when applied in the right category and under the right conditions. Today, we have the technology to handle all spend categories, both direct and indirect. But it isn’t about what you source – it’s about designing the right e-auction strategy based on the internal and external characteristics of the category. Join this live webinar for an understanding of how you can get started with e-auctions, whether you’re looking for a one-off sourcing effort or embarking on a longer digitalisation journey of your procurement organisation. You will also receive a category selection framework that can assist you in choosing the right categories to e-auction in your organisation.

1. 1

2. 3
HOW MANY E-AUCTIONS
HAVE YOU CONDUCTED?
POLL
Experience with e-auctions
21+
auctions
0
auctions
1-5
auctions
6-20
auctions

3. 4
The key
benefits of
e-auctions
Increased savings
Increased coverage
Increased efficiency
Easy compliance
Online and pre-qualified
Fair and transparent
Requires an internetconnection
Improve their position
Instant market feedback
Most competitive participant(s) win(s)

4. 5
SELECTED E-AUCTION REFERENCES
FROM AN ONGOING PROJECT
Electrical
components
• 31% savings in total
• Completedin 12 weeks
Lifting
tools
• 29% savings in total
• Completedin 9 weeks
Fasteners
(MRO)
• 43% savings in total
• Completedin 10 weeks
Pressure control
systems
• 16% savings in total
• Completedin 10 weeks

5. 6
E-AUCTIONTRADITIONAL NEGOTIATION
SupplierSupplier
Supplier
Buyer
Supplier Supplier Supplier
Buyer
Supplier Supplier
Facilitated
online

6. 7
English
reverse
auction
Other
formats
~80%
~20%
Winning bid
Savings
• Downward price movement
• For buying products or services
• The online negotiation can include
price and non-price parameters
• Recommended where supplier pricing
is at the same level
• Can be used in split-award scenarios
RFQ pricing

7. 8
Traditionally, suppliers/products are
validated during or after negotiations
In e-auctions, validation is
forced to be done upfront
Time
Deadline for
validating suppliers
and products
Time
Deadline for
validating suppliers
and products
E-auction and
awardPreparation
Preparation and
negotiation 1
Preparation and
negotiation 2
Preparation and
negotiation 3
Award
Supplier A
Supplier B
Supplier C
Supplier D
Time saved
Supplier participating
in sourcing process
Supplier A
Supplier B
Supplier C
Supplier D

8. 9
What share (%) ofyour spend
is fit for e-auction?
QUESTION
Which of yourcategories is
fit for e-auction?
HOW TO GET STARTED

9. 10
Ability to specify
the product/service
Two or more
suppliers
THE TWO CATEGORY
REQUIREMENTS

10. 11
IMPACT
DRIVERS
Internal impact drivers
External impact drivers
Source to contract complexity
Implementation complexity
Number of
suppliers
Level of
competitive
rivalry
Current
contractual
binding
Need for
product/supplier
approval
COMPLEXITY
DRIVERS
Need for
gathering
external data
Need for
developing
specifications
Stakeholder
buy-in
Spend size Latest
competitive
sourcing
Spend
consolidation
potential

11. 12
6+ qualified suppliers
in the market
No approval necessary
No binding
Key stakeholders are supporters
of the e-auction approach
Some data mustcome from
external sources (significant
amountfrom few suppliers)
Global frame agreements with
several vendors can cover 50-
80% of spend
Yearly spend EUR 3-6m
2+ years since
lastnegotiation
Low supplier interestin the
auctioned spend
Limited supplymarketcapacity
and low supplier interestin the
auctioned spend
Excess supplymarketcapacity
and high supplier interestin the
auctioned spend
Medium supplier interestin the
auctioned spend
High supplier interestin the
auctioned spend
Few simple specifications
(maximum 1 week fully allocated)
No need for any resources
to develop specifications
Complexand customised
specifications (minimum 1 month
fully allocated)
Customised specifications
(minimum 1 week fully allocated)
Complexand customised
specifications (minimum 2 weeks
fully allocated)
Yearly spend EUR 0.5-1.5m
0.5-1 years since
lastnegotiation
3 qualified suppliers
in the market
Limited data mustcome from
external source (small amountof
order lines from one supplier)
0.5-year binding
Requires little investmentin
internal/external approval and no
engineering resources
Yearly spend < EUR 0.5m
0-0.5 years since lastnegotiation
2 qualified suppliers
in the market
No need for external data
Global frame agreementwith a
few selected vendors can cover
+80% of spend
All data mustcome from external
sources (large amountoforder
lines and suppliers)
2+ years’ binding
Requires significantinvestmentin
internal/external approval and
internal engineering resources
1-1.5 years since
lastnegotiation
4 qualified suppliers
in the market
1-year binding
Requires little investmentin
internal/external approval and
engineering resources
Global frame agreements with
few selected vendors can cover
50-80% of spend
1.5-2 years since
lastnegotiation
5 qualified suppliers
in the market
Most data mustcome from
external sources (large amountof
order lines and suppliers)
1.5 years
Requires some investmentin
internal/external approval and
engineering resources
Key stakeholders are advocates
of the e-auction approach
Key stakeholders are trying to
block the e-auction approach
Key stakeholders are neutral
aboutthe e-auction approach
Key stakeholders are critical of
the e-auction approach
Global frame agreements with
several vendors can cover 20-
50% of spend
Not possible to consolidate spend
as local entities use own
preferred suppliers
Yearly spend EUR +6mYearly spend EUR 1.5-3m
21 53 4
IMPACT/COMPLEXITYSCORE
Need for developing
specifications
Level of competitive
rivalry
Spend consolidation
potential
Need of product/
supplier approval
Need for gathering
external data
Number of
suppliers
Latest competitive
sourcing
Stakeholder
buy-in
Current contractual
binding
Spend size
ComplexitydriversImpactdrivers
ImplementationSourcetocontractExternalInternal

12. 13
= Size of spend*
Category
example
Impact HighLow
Low
Complexity
High
4
3
5
5
5
2
3
1
1
2
Need for developing
specifications
Level of competitive
rivalry
Spend size
Need of product/
supplier approval
Need for gathering
external data
Number of
suppliers
Latest competitive
sourcing
Stakeholder
buy-in
Current contractual
binding
Spend consolidation
potential
ComplexitydriversImpactdrivers
ImplementationSourcetocontractExternalInternal
Example of selection matrixExample of scoring
= Size of spend

13. THE 6-STEP MODEL
to develop the e-auction strategy
3. Cost
model
1. Winning
criteria
2. E-auction
types
4. Live
feedback
5. Item
structure
6. Length of
auction

14. 15
Should handicaps be given to certain suppliers based
on non-price attributes?
100
94
6
Comparable
rate in auction
Rate Value Value-added
services
Location CSR Liability Safety
TVO MODEL ADJUSTMENT TOTAL VALUE OF OWNERSHIP MODEL

15. 16
DOS DON’TS
Our experience
has taught us the
dos and don’ts of
e-auctions