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How To Take Politics Out of Purchasing As seen on EdwardCTracey.com TV Live Introducing Industry Best Practices to Government January 31, 2012. Value Proposition.
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How To Take Politics Out of Purchasing As seen on EdwardCTracey.com TV Live Introducing Industry Best Practices to Government January 31, 2012 Prepared by: Direct2Bottomline, LLC
Value Proposition 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. Fair Market Fact: As vendors compete, prices go down! Prepared by: Direct2Bottomline, LLC
Press Release “Kenerly Issues Call to Restore County Services” Gwinnett County Board of Commissioners Lawrenceville, GA Oct. 6, 2009 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.” Prepared by: Direct2Bottomline, 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 Prepared by: Direct2Bottomline, LLC
Success • Midwest General Retailer Since 2003 • 1 Dedicated Resource • More than 700 Events • More than $130 million in Savings Prepared by: Direct2Bottomline, LLC
Contrast Forward Auction vs. Reverse Auction Prepared by: Direct2Bottomline, LLC
Buyer Control Contents and Completeness of the RFP Vendor participation is by INVITATION ONLY Incumbent (s) Past Bidders New vendors identified Vendor View Event Schedule Awarding of Contract Prepared by: Direct2Bottomline, LLC
Transparency • Online RFP distribution • Online Q&A via the System • System capture of: • Vendor’s acknowledgement/refusal to bid • Vendor’s scheduling of any training needed • Vendor’s participation in any training scheduled • Every aspect of the event itself with reports and replay capability • Document management Prepared by: Direct2Bottomline, 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. Prepared by: Direct2Bottomline, LLC
Category Success Factors • Good Specifications • Spend level sufficient to entice vendors to compete • At least 2 vendors willing to compete • Willingness to shake up the vendor base • No adverse supply conditions Prepared by: Direct2Bottomline, LLC
Event Screen Depiction Prepared by: Direct2Bottomline, LLC
Categories Examples Prepared by: Direct2Bottomline, LLC
Case StudyDisposable Medical Supply • Category Baseline • 9 SKU’s • 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%) Prepared by: Direct2Bottomline, LLC
Beneficiaries • Our Customer’s Enterprise – Lower prices • Private - Increased profits • Public – Lowered operating costs/revenue requirements • Our Customer’s Buyers • Increased Productivity • Expanded Vendor Reach • Customer’s 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 Prepared by: Direct2Bottomline, LLC
What’s 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 Prepared by: Direct2Bottomline, LLC
For more information or to discuss the prospects of using reverse auctions to improve your organization’s bottom line – public or private – please contact: Jim Clark, President Direct2Bottomline 970 Peachtree Industrial Blvd., Suite 100 Suwanee, GA 30024 866-990-3225 (d2bl) 770-312-2221 Email JClark@D2BL.com Let them know you saw it on EdwardCTracey.com website Prepared by: Direct2Bottomline, LLC