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Who do we buy from, what’s their price, how do we obtain bulk discounts and a range of other questions are the day-to-day reality of organisations’ buying requirements?

From the suppliers’ point of view, dealing with the right people and ensuring updated prices and availability can be a nightmare in its own right.

The basis of Auckland-based Unimarket’s online platform is in simplifying the often labyrinth-like complexities of corporate purchasing by linking buying inquiries with suppliers.

“Our point of difference compared to our competitors in procurement is because ours sits in the cloud,” says Hilary Lewis, Unimarket’s chief financial officer.

“Under our platform, there’s only one version of the truth, and the owners of the data, the suppliers, maintain it.”

She says other types of procurement software sit on the customers’ systems, and one on one links then have to be built between the (potential) purchaser and the supplier. Whenever a supplier changes as price, the company has to individually change all its individual links.

Unimarket’s come a long way since founder and global chief executive Scott Blackwood started it in a garage in late 2006. With background consultancy work in procure-to-pay systems, Blackwood saw the potential of using the cloud to host the information, connections and management of a different type of procurement system, and in early 2007 started working with the University of Waikato to test the conceptual model before launching to the world late that year.

“We could see that the market potential was in the United States, so we went there very early,” Lewis says, opening an office on the east coast in Annapolis where the company is focused on the higher education market. There are 4500 universities and higher education facilities in that part of the States.

“We have found we haven’t had to do a lot of marketing,” Lewis says. “Our customers tend to sell it on our behalf by their own word of mouth.”

Unimarket’s New Zealand clients are again in higher education, including polytechnics, as well as local government and medium to large companies. Anyone who has a decentralised purchasing arrangement is a natural target for the company.

Once a customer on the purchasing side of the equation says yes, Unimarket simply configures a portal for them, with no installs, no development necessary. “We set them up with a front end that is their own, and from there they can connect to any supplier,” she says. The same system also links back to the company’s accounting system.

Lewis says one advantage of Unimarket is ensuring purchase compliance with control contracts and the centrally agreed procurement process.

“Suppliers love it for that reason,” she says. “In other situations, often they’ll win the deal, put a price up and find that all the purchasing doesn’t go through them. With Unimarket, they get all the purchasing of that organization.”

The company has a small team of three developers constantly improving the product according to their own and client feedback. Updates to the software are automatic, without the client necessarily being aware that changes have been made.

Unimarket has a patent pending on one particular piece of functionality within its system around the idea of ‘bidding together’. This allows buying groups or suppliers, to get together and put out different prices based on a bulk purchase.

Most of its intellectual property protection is based on obtaining market penetration and making the purchasing and supply process easy and cost-effective, “which is going to make clients stick with us,” she says.

The company aims to become the number one procurement software supplier in both the corporate and public sector in New Zealand within two years. Its American goals are not quite as lofty, though it is definitely aiming to be the dominant supplier in the higher education market.

The company is one of 10 finalists in the University of Auckland Business School’s Entrepreneurs’ Challenge.

If it wins a prize, it will even more strongly target growth in the USA market. “We’d have more people selling, getting more customers up and running,” she says.

Cloud computing is a way to take New Zealand to the world Lewis says. “It offers us huge potential; to be able to be in New Zealand and give us a United States presence.”

Cloud operation provides 'one truth' for procurement

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