Did you know that reverse auction software can help you save 18 to 40% on addressable spending? Buyers are always looking for ways to reduce sourcing fees and the e-auction system provides such a platform. It permits streamlining of e-procurement and assists in improving service along the supply chain. Indeed, e-Auctions have revolutionized the way sourcing and procurement teams engage potential suppliers and receive bids. Despite the numerous benefits derived from using this procedure to select suppliers, e-auctions aren’t without their fair share of disadvantages or limitations.
1. Security Risk Posed by Threat Vectors
Cyber threats are undoubtedly one of the biggest limitations posed by the e-auction process. According to studies carried out by the University of Maryland, businesses are subject to malicious attacks at a rate of one attack every 39 seconds. Where traditionally, procurement teams would call up suppliers and negotiate bids, today everything is digital which makes it easier for cyber terrorists to target businesses.
A lot of procurement teams open themselves up unknowingly to various threat vectors when they publish information regarding their e-Auctions. The need for secure platforms to transmit information to targeted suppliers and carry out the bidding should not be overlooked. Having security policies and architecture in place is fundamental to avoid disastrous situations where hackers can infiltrate and cause great harm to the entire buyer’s network systems.
2. Finding Suitable Reverse Auction Software
Not every reverse auction software on the market should be used. It’s no secret that cybercriminals are creating their own applications so they can steal company information. The 2018 ENISA Threat Landscape Report stated that cybercrime motivations have evolved and that, “The most likely reason for an organization to experience a targeted attack was intelligence gathering, which is the motive for 96% of hackers.”
How do you overcome this limiting challenge? When selecting reverse auction software, it’s imperative that you choose an e-auction system that’s been designed by a reputable U.S.-based company, a company that has rigorous and stringent security embedded into the software, as well as an established history as a procurement software developer.
Fortunately, you don’t have to look far to find such a company. One of the leading procurement software developers today is ProcurePort. With a 20-year solid reputation and being trusted globally by sourcing professionals and organizations such as Hud.gov, Union Pacific, and Regal, you’re assured of a secure, cost-effective, and efficient e-Auction platform.
3. Price is Often the Major Driving Force
The nature of auctions whether in the traditional or digital sense is that they are based on pricing. Because the price is often the major driving force it becomes a limitation of e-auction. In general, the lower the price offered by a supplier the higher the chances that the contract will be awarded to them. While this isn’t altogether a bad thing for procurement teams looking to cut back on procurement cost, price shouldn’t be the ultimate deciding factor.
With procurement, you’re also looking at the quality of the products, delivery times, service levels, and a range of other factors that may not always be reflected simply by price. This is a clear impediment. So, what can procurement teams do to overcome this challenge?
Invite new suppliers to pre-qualify before they enter the auction process, so they are aware of what to expect. However, there really is no full-proof way to guarantee that all the bidders in the auction can provide at the level that you expect. You will always find unqualified suppliers who perhaps being new to the game believe they can take a shot at winning a big contract with buyers. But establishing a qualification checklist can prove to be a good starting point.
Invest in Next-Generation e-Auction Software
One of the surest ways to streamline your e-auction process and overcome the limitations of e-auctions is by investing in next-generation safe and secure systems from ProcurePort. Would you like to see the software in action? Schedule a reverse auction software demo. Alternatively, you can contact one of our friendly team members for customized solutions.