We’re often asked “is it right to use reverse auctions to select consultants?” (and with unsurprising equal frequency we have consultants asking us “what can we do to stop our xxxx clients reverse auctioning us?”).
The answer to this first question is simple; yes, as long as you are only interested in cost. So the answer is, for most clients, probably no.
Why? Because reverse auctioning is a powerful purchasing tool which is fantastic for commoditised “widgets” where you can thoroughly specify exactly what you want and “lock in the value”.
But when buying consultancy you are buying people – and whilst you might be able to standardize elements of a service requirement nobody has yet manage to create a “standardised consultant”. In fact you would not want to; it’s critical to get the top people at the top of their game and such people are in demand and will work for clients who value them more.
So this being recognised maybe there is a use for reverse auctioning; if your consultants agree to let you reverse auction them you should perhaps think about using someone else.