3 Replies Latest reply on Oct 26, 2009 7:42 AM by Ellen Terchila

    Reverse Auctions: Market Feedback

    jlitvak Apprentice

      I would like to poll Ariba Sourcing users  and consultants on the following subject which I didn't have a chance to bring up during the conference.  I am curious to know what reverse auction market feedback approaches are most popular with Ariba users: 1) rank only (no pricing visible to suppliers), 2) rank only with the leading bid visible or 3) all bids visible.  Please share your thoughts on which one produces better results and why.

      Thank you.

        • Re: Reverse Auctions: Market Feedback
          David Morel Master

          This will be an interesting discussion once we have a critical mass of users on Exchange.  I will throw out the first reply...

           

          Depends!

           

          I am sure most people saw this coming.  Each of the options you stated work for different reasons for different use cases.

           

          When I ran events for customers, typically we ran the events showing rank with lead bid only.  Showing anymore information than that could potentially allow suppliers to get an idea of how comeptitive the market is and strategically place themselves close to the lead, but still ahead of most of the other bidders.  There are times when it is necessary to hide lead bid from customers and just rely on Rank.  Typically, I use this when working with a Total Cost event and I don't want the suppliers to see what we calculate as Total Cost.

           

          Lets hear from some others on this!

           

          David Morel

          Sr. Solution Manager

          dmorel@ariba.com

            • Re: Reverse Auctions: Market Feedback
              Jon Chelgren Newbie

              Depending on the category, the suppliers participating and the event particulars, we expose bid rank and often expose leading bid information as well. We have no hard and fast rules or criteria for this and allow the Sourcing Managers to use their expertise and experience to make this determination.

               

              Our default is to expose the leading bid.

            • Re: Reverse Auctions: Market Feedback
              Ellen Terchila Apprentice
              Having worked with a long list of Ariba customers, my perspective is that Rank Only is used the majority of the time.  I would only use Rank with First Place Bid showing if you have collected pre-bid pricing via an RFP round, and the suppliers' bids are close together.  Nothing will hold suppliers back from bidding, especially your incumbent, if there is a large delta between first place and themselves.  Even if you award business to the second or third place bidder, which happens in many cases following auctions, you will likely be awarding at a lower cost if the suppliers only viewed their rank and spent their time during the auction trying to improve their standing relative to the other bidders.