All college and university administrators need to take note of how innovative institutions are beginning to make use of reverse auctions to save precious budgetary dollars during the financial meltdown taking place all across the higher education landscape today.
Introduction
Introduction
Here at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), we’ve been quite focused on the higher education market and the compelling case that reverse auctions present saving precious dollars – thousands and perhaps millions of them per institution – for colleges and universities today. We’ve made the case in two articles, the first in April’s “Reverse Auctions: A Tool to Help College and University Budgets in a Time of Massive Budgetary Pressures” (http://reverseauctionresearch.blogspot.com/2010/04/universities-may-take-100m-hit.html), and followed-up with this month’s article appearing in the online journal Bizcovering, “Be a Procurement Hero in a Time of Great Budgetary Needs: Maximizing Purchasing Power Amongst Colleges and Universities Through Reverse Auctions” (http://bizcovering.com/business/be-a-procurement-hero-in-a-time-of-great-budgetary-needs-maximizing-purchasing-power-amongst-colleges-and-universities-through-reverse-auctions/). We’ve shared how institutions such as Emory University, Mississippi State University and the military academies have saved considerable amounts working with FedBid (http://www.FedBid.com), a Vienna, Virginia-based reverse auction service provider that works extensively with federal and state agencies.
The Penn State Example
We’ve invited our readers – buyers, suppliers, and e-procurement professionals to share their own reverse auction success stories with our audience, and I was thrilled to receive an email from Matt Barclay, CPM, of Erie, PA-based Procurex, Inc. (http://www.procurexinc.com/). We’ve covered Procurex before, chronicling their big effort to save big bucks for Governments across Western Pennsylvania on their energy procurements (see “Pittsburgh Blazes The Way, Again, in Reverse Auctions: How Municipal Governments are Saving Millions of Taxpayer Dollars on Their Energy Purchases Through Introducing Reverse Auction-based Competition Among Power Suppliers” http://reverseauctionresearch.blogspot.com/2010/06/Pittsburgh-blazes-way-again-in-reverse.html). Now, Procurex is reporting another success story – working in the higher education market with their home state Nittany Lions of Penn State University. In a single procurement auction for audio/visual equipment, Procurex saved Penn State over $200,000! In these times of budgetary crises across the higher education landscape, those kinds of savings translate into saving jobs and being able to continue providing quality instruction, resources, and services to students. In other words, this single action helped make the procurement staff at Penn State real heroes in stepping-up to the plate and producing concrete savings – savings that can be redirected for the greater good of all students, faculty, and staff in State College, PA! It truly is a “Happy Valley” when you can report successes such as this!
Here are the details from the Procurex blog site:
Q: How does a university purchasing department turn a routine purchase into an event worthy of a champagne celebration?
A: When you save over $200,000.
A: When you save over $200,000.
Penn State University recently conducted a reverse auction using Procurex and saved over $200,000 on audio-visual equipment. The equipment included Epson projectors, Extron switching equipment, WolfeVision document cameras, Sharp projectors, Crestron communications equipment, and other cabling and connection equipment.
This is real money that could go to save jobs, fund scholarships, manage tight budgets, buy lab equipment, new sports equipment, or a thousand other priorities.
Most people wouldn’t get too fired up about buying audio-visual equipment, but reverse auctions can change the game in big ways!
Check out the stats:
Category: Audio-Visual Equipment
# of items: 12
# of Suppliers invited: 10
# of Suppliers who bid: 9
Event duration: 40 minutes.
Extended Start Price: $1.003 Million
Extended Low Bid: $784 K
Savings: $219K
Not a bad day’s work! Go Nittany Lions!
Source: “Penn State Sees the Light” (http://Procurex.blogspot.com/2010/06/Penn-state-sees-light.html). Thanks Matt for the tip!
Analysis
So, if you are a college or university administrator, let’s put it bluntly. You need to find cost savings – now, and reverse auctions can produce them. It doesn’t take a PhD. to see the value in that equation, now does it? So, contact us at the here at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/) to develop a strategy for making this tool – used extensively by organizations ranging from Fortune 500 firms to governments around the world – work for your institution. As a college professor myself, I know just how vital these savings can be in the budgetary “worst case scenarios” we are experiencing today across the higher education landscape – from Big 10 institutions to your community college. No one is exempt, and that means the time to deploy this proven, effective e-procurement tool is right here, right now! And yes, the world of higher education can be changed in the blink of an eye (or the click of a mouse)!
Ah, a chance to use a favorite from the music of my youth....
David
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About the Reverse Auction Research Center
Here at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), we’re focused on how to best make use of reverse auctions across all sectors of business and government to maximize the value of each and every purchasing dollar for organizations. If you’re interested in learning more – or if you have a story to share about your own experiences using reverse auctions, please contact me at dwyld.kwu@gmail.com.
About the Author
David C. Wyld (dwyld.kwu@gmail.com) is the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/). He currently serves as the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a noted expert on reverse auctions and e-procurement topics, being widely published on the topic and a recognized expert/consultant in the area. He has been named among the Rising Stars in Federal Information Technology by Federal Computer Week.
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