[ ASP news ] [ publications ] [ forum ] [ about us ] [ directory ]
[ ASP news ] [ publications ] [ forum ] [ about us ] [ directory ]
|
NEWS
Mar 11th 2000: E-procurement vendors are forming ASP alliances to reach small-to-medium-size businesses, aiming to speed their progress to all-important critical mass through shorter decision and implementation cycles. Among those stepping up their ASP-aided efforts to win smaller business customers in recent weeks have been Concur Technologies, Paramount Techologies and SupplierMarket.com. With business to business e-commerce still in its infancy, all face a classic chicken-and-egg dilemma: without suppliers will the buyers bite? Redmond, WA-based Concur won $35m backing for its efforts from Nortel Networks and US financial services giant Safeco, along with marketing and technical support from Microsoft. In a strategic alliance announced Feb 23rd, Concur unveiled its Business Advantage supplier marketplace for small and medium-size businesses (SMBs), accessed through the hosted Concur eWorkplace application suite. Nortel has packaged the solution as a hosted offering that it will market through its 15,000-strong network of value-added resellers, while Safeco claims to reach over 17,000 insurance agents and investment advisors, creating a breadth of reach into the SMB market that Concur hopes will prove irresistible to suppliers. �Concur has a vision of creating the largest and most heavily-trafficked e-commerce trading network,� according to chairman and CEO Steve Singh. �Buyers now have the leveraged buying power of multi-billion dollar companies, and suppliers gain a highly efficient, low-cost distribution channel.� To achieve that vision, Concur has retooled its Web-based e-commerce trading network to bring it within reach of small and mid-sized businesses, giving these companies access to price discounts that they couldn�t receive on their own. "We had to make the product standardised enough to sell to hundreds of thousands of businesses. That required development,� Bruce Chatterley, president of Concur's small and middle enterprise market division, told ASP News Review this week. Industry analysts estimate that automated procurement systems can reduce the cost of processing business purchases by as much as 75 percent, through a combination of reduced errors, increased vendor discounts and shorter processing cycles. But until recently, e-procurement systems have been expensive, custom-built solutions aimed exclusively at large enterprises. �We made a decision a while ago to take the application down market, to companies with between 100 to 1000 employees. We have customers that have as few as 30," said Chatterley. Concur levies a one-time setup charge of $3,000 for its business process automation suite, plus a per user fee starting at $10 per month, and has signed up over 60 customers. But the key to success for its e-procurement offering - which just seven of the 60 have so far adopted - will be the breadth of buying choice, admitted Chatterley: "Technology is 40 percent of the deal. The majority of success is in the operations." For Southfield MI-based Paramount Technologies, ASP alliances will play a vital role in expanding the market penetration of its e-procurement package, which launched in a new ASP-enabled version Monday (Mar 6th). �Economies of scale govern the economics for the software vendor. A good relationship with an ASP enables us to aggregate new users into the community, thereby facilitating the growth of our subscriber base," company co-founder and VP Christopher Cameron told ASP News Review. The service - currently available through Paramount�s Web site, but soon to be offered through ASP partners such as Futurelink - costs from $1,000 to $4,000 to install, plus a monthly rental fee for the service and ongoing software upgrades. �Emerging market companies want to have the same functionality [as larger organisations] but they do not have the same eligibility from the infrastructure or resource standpoint,� said Cameron. �We are embracing the challenge of how to deploy an applicable ASP model that provides portable technology that can be deployed and used in a relatively short order.� Speedy deployment will help Paramount maintain its standing in its favoured midmarket terrority, where vendors such as Concur are moving in as they scale down to compete for SMB business. "We were unique in targeting to the middle market. Most opportunities and products in this area were geared to the Fortune 1000,� explained Cameron. �We separated ourselves from the beginning by catering to a larger suite of features required by the middle market customers.� In addition to the e-procurement package, which includes modules for vendor catalogue management, purchase requisition management, and purchase order and inventory control, Paramount also offers a project cost management applcation. Both are available in either intranet or ASP versions. SupplierMarket.com announced Feb 23rd a deal with high-profile startup Surebridge to integrate its Internet-based marketplace platform for sourcing manufacturing parts with the ASP's enterprise resource planning (ERP) applications from vendors such as Baan, Peoplesoft and Great Plains. When the ERP software signals that it's time to source replacement parts, the SupplierMarket.com system routes the necessary orders across the Internet to find a qualified supplier. �The ERP software fits our vision of integration between buyer and suppliers,� SupplierMarket.com CEO John Burgstone told ASP News Review. "With Surebridge, there is a seamless interaction that is completely electronic. It supplies the missing link. Without Surebridge�s solution our customers have to manually enter information on needed materials.� Cambridge MA-based Surebridge, which claims more than 2,000 existing ASP users, formally launched as a pureplay ASP last month with a $36m new round of funding from backers including Spectrum Equity Investors and The Goldman Sachs Group. Report by Lisa Paul
|
LINKS
|
