“Jacob and the team at Maersk are at the forefront when it comes to developing robots that execute e-auctions from end-to-end and are kicking off a transformation that will fundamentally change how we consider e-auctions and negotiations.” – A Practical Guide to E-auctions for Procurement
At one time or another, we have all heard the words about someone having “written the book” on a particular subject, indicating that they are a recognized authority or expert in that area.
In my case, when I was asked to write on the future of e-auctions and getting buy-in on digital transformation, the above assertion is true—I have indeed written the book.
Having learned from more than 10,000 e-auctions globally and being responsible for one of the most successful and award-winning e-sourcing programs in the world, it was a hard-earned knowledge. In truth, I am still eager to learn and find ways to improve, so the journey never ends.
That said, if my experience to date can shorten the time between your recognizing the digital opportunity and achieving its promise, then my efforts with this article will have served their purpose.
When it comes to your digital starting point, you may already believe that your efforts began some time ago. After all, the emergence of digital technology and the availability of AI and RPA is not new.
However, and based on the October 2019 Deloitte global survey of CPOs, most are not satisfied with the progress of their digital transformation initiatives. There are many reasons for the disappointing results, so hopefully, this article will help get you back on track by recognizing that the problem is not with the technology.
At first, this may sound counterintuitive, but when I say it is not about technology, I mean it is how you view using technology to achieve your procurement objectives.
I think it is essential for you to know that while digital procurement solutions seem to be popping up everywhere these days, it is not new. Back in 1995, the very first “digital solution” for procurement was an e-auction platform from FreeMarkets.
In other words, the technology, while enhanced with new capabilities, is based on a solid and proven foundation. So, why do companies still struggle to realize the benefits of e-auctions and other digital procurement solutions?
Here is the “it’s not about the technology” part; much of my time explaining our success with e-auctions is spent on dispelling the myths or misconceptions of the tool versus its implementation and actual use.
An e-auction is for many considered a controversial tool because of its efficiency to drive down costs through a competitive bidding process. Because of this perception—or I should say misperception—companies have historically struggled to make the technology work for them despite its promise.
Realizing the benefits of the digital promise requires you to fundamentally change how you view e-auctions and negotiations in general – a strategic and holistic approach to e-auctions are required.
The first step in this process is providing the data to demonstrate the value that the tool delivers, and believe me, the facts overwhelmingly support its use.
I then introduce several best practices regarding creating the right strategy, such as option-type and format, to realize the best outcomes.
Finally, I provide guidance on how to approach change management, starting with creating well-defined KPIs, secure C-level buy-in and demonstrating how the technology will not replace procurement people but free them to focus on more strategic pursuits.
I am, of course, very excited about being a part of the Forge Digital Futures Conference and look forward to sharing more with you at that time.