SupplyNet rethinks e-market role

SupplyNet has dropped its plans to become an e-marketplace, preferring the role of technology provider for procurement portals.

SupplyNet has dropped its plans to become an e-marketplace, preferring the role of technology provider for procurement portals.

SupplyNet, which started off in April 2000 intending to be an electronic government procurement hub, is now the technology arm of the PSB Group, says SupplyNet operating chief Carl Mitchell-Turner.

The PSB Group also comprises PSB Procure, a procurement consultancy launched last year; GSB Supplycorp, a procurement company for government departments and agencies which originally owned half of SupplyNet; and the newly launched procurement portal Conexa, which was formerly SME Connections.

“The business model has changed as it does with any start-up business,” says SupplyNet marketing manager Matt Caughey. “We learned that the whole e-business thing is going away from horizontals towards verticals.

“SupplyNet is a B2B technology enabler, not a marketplace. Its mainstay is selling licences for Commerce One although we don’t see ourselves as a ‘New Zealand’ Commerce One.”

To date SupplyNet is not profitable and the bulk of its revenue comes from work converting catalogues into electronic format for Singtel Optus in Australia and a Jordanian e-marketplace called Aregon. But Caughey expects this to change this year. Last year SupplyNet won a contract to provide e-procurement technology to NZI and the timber industry trading hub WoodNet.

Meanwhile, SupplyNet is moving ahead building e-procurement platforms and converting suppliers’ catalogues for Conexa and building a trading portal for GSB Supplycorp that’s due to be rolled out this year.

Conexa has partnered with about 27 suppliers including Liquor King, Corporate Express, Compaq, Clear Communications and New Zealand Couriers. However, not all of them are at the stage where they can conduct transactions online though the plan is to move them all that way during the year.

On the buyer side Conexa is taking the “communities of interest” approach — that is, targeting existing groups of small and medium-sized businesses.

Mitchell-Turner says users may pay a membership fee — it will depend on each case. “Obviously we want people to use it and will set up something that suits all parties,” he says.

So far Conexa’s customer list is based around the business tenants of three major property companies. One of them, Trans Tasman Properties, the owner of commercial property in Auckland, Wellington and Christchurch, for example, has a website for its tenants at giving tenants access to Conexa and its services. In the case of Trans Tasman Properties, TTP sponsors its tenants’ membership.

SupplyNet’s is 95% owned by Profession Service Brokers, a joint venture between Hong Kong-based SEA Holdings and National Equity, a New Zealand company owned primarily by businessman Charles St Clair Brown. Advantage maintains 2% and Eric Watson’s Calibre Group holds the remaining 3%.

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