Reverse auctions – an informed debate on LinkedIn

There's been a good debate on LinkedIn in response to what was initially a pretty typical  'marketing announcement' type piece from Ruth Pires of Trading Partners claiming savings on a public sector mobile phone auction.   Ruth got a bit more push back than she expected I suspect as Kevin McGill and Keith Gilby made some very intelligent and less positive comments on auctions; but Ruth  has now come back with a very well argued piece putting the positives very clearly.

The negatives raised were around the savings measurement; long-term supplier relationships and the effect auctions can have on them; and whether suppliers actually adhered to the terms agreed in auctions.  Issues which are not particular to auctions were also raised; such as the optimal contract length; and whether a single or multiple supplier strategy is better.

Ruth stressed that auctions have to be set up properly, and thinking about strategy pre-auction is as essential as for any other contracting process.  In the end, I'm with her; although I suspect there are a lot of 'bad auctions' out there, I do think we should be seeing more, not fewer, auctions generally across public and private sectors.

If you're a LinkedIn person, take a look here.

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