Transform Procurement: The Value of E-Auctions is a practical, clear-eyed guide to building an e-auction program that actually works, not just as software adoption but as a cultural and strategic shift inside procurement. Why do so many e-auction programs fail before they even start?

A lot of procurement teams try to use e-auctions to replace the Request for Proposal (RFP) instead of viewing them as a negotiation tool. Viewing e-auctions as a quick RFP is such a small piece of what they can do that it’s like using your chainsaw only to cut down trees. Just as a chainsaw can also help you make firewood, cut up brush into manageable piles, or even carve a beautiful sculpture in the right hands, an e-auction can also reduce lead times, bring clarity to complicated bids with lots of options, speed up contracting, and improve scopes of work. E-auction programs fail because they don’t treat e-auctions as a tool in the toolbox and don’t articulate the value of that tool to stakeholders (both internal and external).

The book highlights internal resistance as a major barrier. What are the most common forms of pushback, and how can leaders build buy-in without forcing adoption?

The example I see most often is that a supply chain or procurement leader tells their team, “We’re going to start using e-auctions.” The team goes through training, they identify categories to start with, issue an RFP, and tell suppliers there might be an e-auction in the negotiation bid phase. Then the buyer receives a phone call, usually from the incumbent supplier, who tells the buyer that the supplier won’t participate in an e-auction, that this will destroy the supplier relationship, and the buyer just cares about price and not value if they move forward with an auction. This scares the buyer, who has been well-trained that procurement is about relationships (because it is!), and they go to their leader and ask for an exception. “I know we were planning to do an e-auction for this category, but I just don’t think we should anymore.” This is the critical moment for the leader. If they say, “You don’t have to do the e-auction,” that set of suppliers and that buyer will now never try one again. If the conversation gets to this point, I highly recommend that the leader have the buyer at least try the e-auction and have a conversation with the supplier about how the buyer considered full value in their e-auction setup.

The “e-auction exception” conversation is common because the buyer never understood the reasons the company was using e-auctions in the first place. Every procurement team member has to understand the why of e-auctions: considering true value (freight, tariffs, which options are in or out, communicating clear business opportunities to suppliers, etc.), and they also have to be ready with their answer to the suppliers who make that phone call. Supplier benefits to e-auction are transparency of where they are in the market, clarity of scope, and speed to a decision. When an e-auction ends, a supplier should know if they need to start prepping their team for the business or if they should spend their resources on other opportunities. A supplier who immediately pushes back against an auction without figuring out if the buyer is running it well may not be the supplier partner the buyer thought they were. An e-auction program tends to expose poor supplier relationships because those relationships can’t survive when the suppliers have to compete on a level playing field.

As Simon Sinek always says, the answer to building buy-in without forcing adoption is to “Start With Why” and help buyers and suppliers alike understand the value of the e-auction tool.

You spend a lot of time on supplier perception and trust. What do suppliers get wrong about e-auctions? What do buyers get wrong?

Suppliers tend to fear that their full value proposition isn’t being considered in an e-auction. This is part of why I insist on running an RFP ahead of the e-auction in most cases, because it allows the buyer to eliminate suppliers that do not meet quality, service, or specification standards. Only a short list of suppliers should be invited to the e-auction, just as only a short list of suppliers is invited to any procurement negotiation. In addition, if suppliers are proposing value-add opportunities (such as a faster schedule or extra support), the e-auction can help clarify if those extras are actually desirable to the buyer. If they are, the buyer should include them in the e-auction. If they aren’t, that may be an opportunity for both parties to save cost and effort by removing the extras from the bid.

Buyers often think that e-auctions are only useful for material bids with simple, clear specifications. Due to the proliferation of e-auctions in the early 2000s, the “simple” material bids, like fasteners or MRO, can actually be the most difficult to run. Those suppliers are most wary of a “race to the bottom,” and it’s common for the buyer to forget service components like shipping, stocking vending machines, or helping consolidate similar part numbers. I will happily run an e-auction for a capital improvement project like a factory expansion or a utility line construction long before I will tackle MRO. I’ve run e-auctions for or with clients that include debt collection, temp labor markups, marketing, elevator maintenance, software implementation, and a number of other categories that are definitely not direct materials.

You open with your first failed auction. What did that experience teach you that success couldn’t have?

I learned that e-auctions were trickier than they first seemed. E-auctions are not just a matter of “publish this, and the market will bid,” they take diplomacy and finesse. They require supplier phone calls and assurances. E-auctions often require creative setups and a relentless commitment to integrity and fairness. I also learned that a failed e-auction is not necessarily a failure for the buyer. If suppliers are truly putting their best foot forward in the RFP, then they will not reduce their price in the e-auction, and the auction was a quick confirmation that the buyer is paying market price (or getting market lead time, or whatever number is in the bid). An e-auction reduction of zero means the awarded supplier has a clear understanding of the scope, that the system has captured and confirmed their best bid, and that the supplier is treating the buyer like a true supplier partner.

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