Electronic Reverse Auctions (eRAs) can be an effective market making and Preis collection mechanism. Unfortunately, the more popular they become, the more frequent we hear the horror stories of auctions gone wrong. This is not because the tool is used too often, but rather because eRAs are being used at the wrong times, in the wrong ways, and sometimes for the wrong reasons.

The Electronic Reverse Auction Pre-Auction Decision Analysis Tool was developed to assist those less familiar with the technology to avoid the misapplication of it. This Tool is available to supply management professionals as a quick and easy method of determining which initiatives are best suited for an eRA, and which are not. It forces users to consider all the major pitfalls associated with a reverse auction by leading them through a series of questions.

The exercise culminates in a recommendation as to the applicability of an eRA to the particular sourcing initiative under consideration, and it offers personalized advice in response to user-provided data. This easy-to-use, intuitive, and reliable tool may help those struggling with the misapplication of reverse auctions to better understand the technology and easily identify the risks inherent in their project.

While created to accurately rate the applicability of an eRA to the widest number of spend categories, the Pre-Auction Decision Analysis Tool can be modified to precisely assess any commodity or service. This customization can even account for organization-specific objectives and policies. Contact me to learn more about customization.

This is a Microsoft Excel™-based aid. So yes, you'll need to have Excel installed on your computer to open the file and use the Tool. Excel is the spreadsheet application included in the MS Office suite of software. Microsoft has been generous enough to make a free trial version of their software available.