Credit Suisse gets cost-effective procurement with on demand e-auctions

In an increasingly competitive business environment, long cycle times for procurement processes at Credit Suisse needed improvement, but it needed an approach that would help reduce overall sourcing costs, improve responsiveness and accommodate fluctuations in demand.

As with most players in the banking industry, Credit Suisse was under increasing pressure to cut costs. Corporate sourcing has become a focal point for cost savings within the bank. Credit Suisse was looking for a way to cut overall costs, especially for major purchases (e.g., desktop computers) and high volume, repetitive purchases (e.g., office supplies, copier paper). In addition, long cycle times for procurement processes meant that Credit Suisse's internal customers had to wait increasingly longer for procurement requests to be processed. Existing request for quotation (RFQ) and request for proposal (RFP) processing could take between three to six months or even more.

IBM Business Consulting Services recommended an e-auctions solution to address Credit Suisse's sourcing needs. Because this was a relatively new technology for Credit Suisse, IBM offered to provide e-auctions on demand. Credit Suisse would pay on a per auction basis, at a fixed price per auction.

IBM works with a third party e-auction company (Trade2B), 'renting' their e-auction platform. IBM Business Consulting Services supports Credit Suisse with the management of the entire e-auction. It sets up users (suppliers and internal users), customises the e-auction software to reflect bidding rules, defines the parameters of what each participant in the auction can view (i.e., can they see competitors' bids or just their standing in the auction) and runs the actual e-auction.

Credit Suisse achieved substantial savings (between five and 15 percent) without investing in permanent software or hardware components. The e-auction system provides Credit Suisse with the flexibility of using the e-auction process only when it needs it. Credit Suisse pays only when it actually needs and uses an e-auction. Procurement process time under the e-auction system is considerably shorter than previous processes. Internal customers can now expect resolution of their procurement requests in about six weeks, compared to the previous three months or more.