What is Live Auction?
Live Auction Cockpit provides virtual auction floor for reverse live auctions, which offers real time bidding and monitoring with tight integration to procurement processes.
It simulate the experience of an actual auction by utilizing technology to provide instantly updated information on all auction activity.
•Both purchasers and bidders can monitor one or more auctions and the associated bidding activity in real time. The cockpit displays continually updated auction data, including item price information and charts, to reflect each new bid received as well as any status or time changes.
•Purchasers have the option of manually starting, pausing, resuming, extending the auction directly from the cockpit interface.
•By default, the purchaser is provided with a full range of bid management tools including activities such as deleting bids, banning or reinstating bidders, and surrogate bidding.
•A participants list provides the purchaser with the connection status per bidder and company as well as access to supplier details. Purchasers can send chat messages to individual participants or to all participants while bidders can only chat with purchasers.
Live Auction Installation Platforms
You can choose the following technical platforms for the Live Auction Cockpit:
1. Live Auction on Java Server
With this option, live auctions are handled by a Java-compliant applet that is fully integrated with SAP Bidding Engine and cannot be implemented independently.
2. Live Auction on ABAP Server
To use this function, you must activate business function SRM, Strategic Sourcing Innovations (SRM_SOURCING_1). This allows you to use the ABAP server automatically. If you want to use the Java server, you can switch to it in Customizing under SRM Server Live Auction Activate/Deactivate Live Auction on ABAP Server .
With this option, you can use live auctions without installing and configuring the Live Auction Web Presentation Server separately. For business users, working with live auctions on the ABAP server is identical to working on the Java server
Implementing Live Auction Cockpit on ABAP Web Server reduces Total Costs of Ownership (TCO) for customers who do not want to install and configure the Live Auction Web Presentation Server (WPS) separately.
LAC Configuration Steps are as follows
- Initial Settings
a. Activate Live Auction on ABAP server
Go to transaction SPRO and choose
IMG –> SAP Supplier Relationship Management –> Supplier Collaboration –> Live Auction –> Activate/Deactivate Live Auction on ABAP Server.
2. General Settings
2 a. Define Logical System
•Go to transaction SPRO and choose
•IMG -> Supplier Relationship Management ->SRM Server -> Technical Basic Settings -> ALE Settings (Logical System) -> Distribution (ALE) -> Basic Settings -> Logical Systems -> Define Logical System. Or Tcode: BD54
2 b. Define RFC Destination (Optional)
Go to transaction SPRO and choose IMG –> SAP Supplier Relationship Management –>SRM Server–> —Technical Basic Settings –> Define RFC Connections or Tcode : SM59
3. Define Transaction Type
Go to transaction SPRO and choose IMG –> SAP Supplier Relationship Management –>SRM Server–>
–Cross-Application Basic Settings –> Define Transaction Types
4. Define Properties of Live Auction
IMG -> SAP Supplier Relationship Management ->SRM Server -> Live Auction -> Define properties of Live Auction
Tcode: SM31 Table name: BBPV_LA_PROP
One can create a new auction by selecting Auction under create documents or by selecting create auction tab.
Auction Type Selection
From various auction types such as English Auction/Sealed bidding Auction/Dutch Auction has to select auction type
Various Types of Auctions – Definition
1. English Auction
It’s a basic reverse action, where, every new bid which is submitted is compared and validated against overall best bid, that is the lowest bid ranks first. The bid in an auction which is submitted first, is compared to the start price.
2. Rank Only Auction
Auction logic is similar to Blind bidding auction only in this ranks are displayed to bidders.
3. Sealed Bidding
Each new bid submitted is compared by the system to the current best bid of the submitting bidder. If it is the first bid submitted by a bidder, the bid price gets validated against the start price.
4. Company Bid
Each new bid submitted is compared by the system to the current best bid by the company of the submitting bidder. Although this logic puts bidders against other bidders in the same company, the individual bid ranking is still across all bids and companies.
5. Dutch Auction
Dutch auction is a type of reverse (buy-side) auction with one buyer and multiple suppliers. In Dutch auction the auctioneer raises the price from a low starting point until a bidder agrees to sell at that price. The administrator enters a start price, a time increment and a price increment. Bidding begins at the start price. If no supplier is willing to sell at the starting price, the price automatically goes up by the price increment, after the time increment has passed. The first supplier that raises his or her hand is the winner, and the auction line item is closed at that point.
Important parameters during auction creation
SRM supports auction business rules mentioned below to conduct the auction .These below fields can be set at header level
1.Binding Period – The bidder makes a commitment that the bid is valid until this date.
2.Currency – Currency is set at the header level for the entire auction.
3.No bid monitoring until first valid bid – If this option is activated by selecting the check box, the system will display the bids of other bidder only after the bidder himself puts his own first bid.
4.Bid Decrement – The amount/percentage by which the next bid to be submitted by a bidder in an auction with reference to previous bid.
5.Bid Validation – Every auction type has a bid validation factor linked with it. You can overrule the default by choosing a changed bid validation factor.
6.Settings for Automatic Extensions – We have the provision of setting up the auction with automatic extensions, that is if the bid is submitted within few minutes/seconds of the auction end time. The auction end time will automatically get extended, based on the timing parameters fixed by purchaser/administrator.
Remaining Time Trigger – This field refers to the duration of time (minutes), before which live auction is programmed to end, if a new bid is placed within this time duration, the auction will be extended with specified time.
Number of Extensions – This field depicts the maximum number of times by which an auction can be extended automatically. Extension Period – The span of time (hours or minutes) by which the system extends an auction, if a bid is received during this period.
Bidder addition and Item addition
Bidder Addition – Click on the bidder tab in auction definition to add bidders
Item addition – SRM supports both the item types (material/service), product can be added from product master, and otherwise one can mention the item description directly.
Important fields while adding line item
Business expectations can be set at detail level for following field
1.Line Item – One can get items from a catalog, material from the product master, or we can enter items with free text.
2.Start Price – This price determines the minimum bid price, a bidder can quote for a line item . The system accepts bid price same as start price or less than start price for the first bid of the bidder.
3.Reserve Price – This price determines the highest price a company is ready to pay for the line item. In the auction parameter for bidder view, reserve price indicator can be displayed in the cockpit for bidder, this indicator displayed only and not the reserve price.
4.Reference Price – This price represents the historical price or the price offered for the product/service in the market. Reference price is used by the system to determine saving information with reference to start price and is displayed in the cockpit.
5.Bid Decrement – The amount/percentage by which the next bid to be submitted by a bidder in an auction with reference to previous bid.
6. Price Unit – It is the part of the item quantity upon which bids are decided. Fore.g. if the price unit is 1 then the bid price is 1 unit. The price unit is the denominator of item quantity in calculations.
Administrator view of Live Auction Cockpit
Participants list provides the administrator with the connection status per bidder and company as well as access to vendor details. Administrator can send chat messages to individual participants or to all participants while bidders can only chat with administrator.
Bidder view of Live Auction Cockpit
The bidder is able to see below screen
Important fields displayed on bidder’s auction screen
1.Unit – It is the unit of measure defined for an item. Some examples could include, each, Kg, Tons ,Meters Liters, Hours etc.
2.Start Price – This price is defined during auction creation, This price determines the minimum bid price, a bidder can quote for a line item . The system accepts bid price same as start price or less than start price for the first bid of the bidder.
3.Price Unit – It is the part of the item quantity upon which bids are decided. For e.g. if the price unit is 1 then the bid price is 1 unit. The price unit is the denominator of item quantity in calculations.
4.Decrement – The amount/percentage by which the next bid to be submitted by a bidder.
5.My Bid – This price refers to the last price entered successfully by the bidder for a line item.
6.My Bid Value – This value is the price entered by the bidder for each bid submitted for a line item.
7.Best Bid – Best bid is the lowest and the overall best bid submitted by a particular bidder as compared to other rival bidders for a particular item in the auction.
8.Next Valid Bid – This bid is the valid price which a bidder can submit for the line item. This bid is calculated with reference to decrement value defined for the auction. i.e. last bid for the line item minus decrement value will give you next valid bid, next valid bid also depends on the auction profile.
9.Rank – This field displays the rank at which the bidder stands in the auction. This rank is achieved on the price provided by the bidder against other bidders.
10.Bid Price – This price is based on the price unit and its the actual field where bidder can enter price for the line item.
11. Online help – A bidder can get online FAQ from auction screen by selecting icon.
Live Auction Business Benefit
- Streamlines the process flow through seamless top-to-bottom integration with multiple SRM components and backend systems
- Maximizes savings and ROI through supplier competition and configurable bidding parameters and extensions
- Increases flexibility and productivity in the procurement process
- Optimizes auction control decisions by providing instant, real-time information
- Minimizes time and costs by providing instant chat answers, notifications and clarification
- Improves accountability by providing full chat audit trail