15 Nisan 2014 Salı

"E" is for Easy, not just Electronic

Last week I was reading a discussion in one of the many eSourcing related groups LinkedIn. The headline was "Reverse e-auction visibility settings: legal implications" and the question below the headline was: "Can anybody share your practices on showing the lead bid in reverse auctions and any potential legal implications? As a non-legal person, I have a hard time arguing to my legal department that we indeed could (and should, when applicable) show the leading price without compromising competition law. This question refers to the European market."
This question is a good one, because it made me think "Wow!! We are now in 2014, and misconceptions like this are still floating around even in the legal departments of large and modern companies!"

Scanmarket has been in the eSourcing space since 1999, and one of the most crucial things for an eSourcing provider is of course to ensure that what we do is legal. In the private sector there is no difference legally whether you negotiate online or off line or whether do reverse or forward auctions.

Bearing in mind that the same law applies for on-line and off-line negotiations (auctions), you can argue that the competition becomes more fair towards the suppliers. Each has access to the same information, at the same time, and the numbers speak for themselves. If you are a supplier and you have visibility to the lead bid, you know that this is "for real" and not just a buyer bluffing which could easily be the case in a face to face negotiation.

Sometimes it is a good idea not to reveal any pricing at all (in both auctions and in face-to-face negotiations), and sometimes you are better off letting suppliers know what they are up against. However both approaches are different negotiation tactics which are both legal on -and offline.

A lot of companies attach their code of conduct as part of their specifications to an auction, and we encourage them to do so. The specifications will include a clear communication to the supplier of what to expect prior, during and after the auction. Suppliers who do not wish to participate under the specified rules should refrain from participation and we recommend buyers to train suppliers prior to auction, not only because of the need to answer questions regarding the technical aspects of an auction, but also to make sure that the supplier understands all specifications and the process itself.

Well, I admit this was quite a long answer to a simple question, but I have heard this question many times over the years. There seems to be a misconception to online negotiations that this is something completely different with a completely different set of rules and laws which makes everything with an "e" in front very scary and a "totally different world". When all it really is, is a simple tool to make a buyer more efficient. Sending an email instead of posting a letter.  "E" for "easy"..

Written By:
Betina Nygaard - CEO


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