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Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC How To Take Politics Out of Purchasing As seen on EdwardCTracey.com TV Live.

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Presentation on theme: "Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC How To Take Politics Out of Purchasing As seen on EdwardCTracey.com TV Live."— Presentation transcript:

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2 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC How To Take Politics Out of Purchasing As seen on EdwardCTracey.com TV Live Introducing Industry Best Practices to Government January 31, 2012

3 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Direct2Bottomline, in conjunction with our technology partner Intesource, helps companies become more profitable by bringing vendors into a competitive, live bidding environment with the objective of bidding prices down on the goods, services and capital items they buy. Value Proposition Fair Market Fact: As vendors compete, prices go down!

4 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC As the Gwinnett County Board of Commissioners evaluated its options in response to the affects of declining tax revenues and increasing operating costs vs. service cuts, former Commissioner Kevin Kenerly had this to say: … Bold action is needed to keep Gwinnett County a preferred place to live, work, and raise a family. Press Release Kenerly Issues Call to Restore County Services Gwinnett County Board of Commissioners Lawrenceville, GA Oct. 6, 2009

5 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Boldness Yields Results Meaning of Boldness in this context: Drastic changes to the status quo WITHOUT becoming wreckless WITHOUT ignoring corroboration WITHOUT abandoning accountability Customers have realized more than $2.5B in savings in the past 11 years in tens of thousands of events across hundreds of spend categories

6 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Success Midwest General Retailer Since Dedicated Resource More than 700 Events More than $130 million in Savings

7 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Contrast Forward Auction vs. Reverse Auction Forward Auction eBay Reverse Auction Intesource Initiator:SellerBuyer Objective:Highest BidLowest Price Bidders:AnonymousCustomer Controlled Winner:Highest BidderCustomer Controlled Bidder Presence:SporadicLive Timing:Spans Several DaysMinutes (15-60)

8 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Buyer Control Contents and Completeness of the RFP Vendor participation is by INVITATION ONLY oIncumbent (s) oPast Bidders oNew vendors identified Vendor View Event Schedule Awarding of Contract

9 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Transparency Online RFP distribution Online Q&A via the System System capture of: oVendors acknowledgement/refusal to bid oVendors scheduling of any training needed oVendors participation in any training scheduled oEvery aspect of the event itself with reports and replay capability Document management

10 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Savings Realized Per Event A Category is a good or service, or group of goods or services, which can be bid upon by a common group of vendors. An Event is the execution of a reverse auction for the purpose of bidding a category purchase.

11 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Category Success Factors 1)Good Specifications 2)Spend level sufficient to entice vendors to compete 3)At least 2 vendors willing to compete 4)Willingness to shake up the vendor base 5)No adverse supply conditions

12 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC ItemCurrent Price Vendor AVendor BVendor C Cost Element 1$390,000$360,000$390,000$375,000 Cost Element 2$5,750$3,750$5,300$4,000 Cost Element 3$9,400$8,700$18,900$9,500 Cost Element 4$1,400$900$450$900 Cost Element 5$110,000$94,000$107,000$105,000 Cost Element 6$8,500$8,850$8,810$8,875 Cost Element 7$25,000$30,000$24,250$25,000 Cost Element 8$8,500$7,250$9,500$7,500 Cost Element 9$210,000$185,000$195,000$175,000 Cost Element 10$45,000$57,000$44,000$46,000 Cost Element 11$2,000$4,000$2,100$1,500 Event Screen Depiction

13 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Categories Examples Communications Equipment Office Supplies Insurance Brokerage Refuse Hauling UniformsFuelPaving ServicesMeters Water Treatment Chemicals Legal Services Document/For m Printing Payroll Services Background Checks Drug Screening Building Construction Valves & Pipe Installation Services Janitorial Services Motor VehiclesTurf Management

14 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Case Study Disposable Medical Supply Category Baseline 9 SKUs 3 Vendors Annual Spend – $1.551 million Bids Placed (95 total) Standard event window – 28 Extended event window – 67 Savings First bids - $1.466mm (Savings - $85K+ or 5.5%) Final bids - $1.213mm (Savings - $338K+ or 21.8%)

15 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Beneficiaries Our Customers Enterprise – Lower prices Private - Increased profits Public – Lowered operating costs/revenue requirements Our Customers Buyers Increased Productivity Expanded Vendor Reach Customers Customer Private Enterprise – Potentially lower prices Public – Lowered tax requirements Vendors New - Exposure to new business opportunities Incumbent – Removal of best price doubts Fair treatment during the event – time extensions

16 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC Whats Next? Review of spend categories Execute a series of pilots to test the solution Execute a purchasing calendar for high potential events of the coming year No up front costs No people to hire No software to buy No hardware to buy No long term commitment or investment required

17 Reverse Auction Technology powered by Prepared by: Direct 2 Bottomline, LLC For more information or to discuss the prospects of using reverse auctions to improve your organizations bottom line – public or private – please contact: Jim Clark, President Direct2Bottomline 970 Peachtree Industrial Blvd., Suite 100 Suwanee, GA (d2bl) Let them know you saw it on EdwardCTracey.com website


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