Who do we buy from, what’s their price, how do we obtain bulk discounts and a range of otherquestions are the day-to-day reality of organisations’ buying requirements?
From the suppliers’ point of view, dealing with the right people and ensuring updated pricesand availability can be a nightmare in its own right.
The basis of Auckland-based Unimarket ’s online platform isin simplifying the often labyrinth-like complexities of corporate purchasing by linking buyinginquiries with suppliers.
“Our point of difference compared to our competitors in procurement is because ours sits in thecloud,” 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, thesuppliers, maintain it.”
She says other types of procurement software sit on the customers’ systems, and one on onelinks then have to be built between the (potential) purchaser and the supplier. Whenever a supplierchanges 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 itin a garage in late 2006. With background consultancy work in procure-to-pay systems, Blackwood sawthe potential of using the cloud to host the information, connections and management of a differenttype of procurement system, and in early 2007 started working with the University of Waikato to testthe 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 veryearly,” Lewis says, opening an office on the east coast in Annapolis where the company is focusedon the higher education market. There are 4500 universities and higher education facilities in thatpart of the States.
“We have found we haven’t had to do a lot of marketing,” Lewis says. “Our customers tendto sell it on our behalf by their own word of mouth.”
Unimarket’s New Zealand clients are again in higher education, including polytechnics, as wellas local government and medium to large companies. Anyone who has a decentralised purchasingarrangement is a natural target for the company.
Once a customer on the purchasing side of the equation says yes, Unimarket simply configures aportal for them, with no installs, no development necessary. “We set them up with a front end thatis their own, and from there they can connect to any supplier,” she says. The same system alsolinks back to the company’s accounting system.
Lewis says one advantage of Unimarket is ensuring purchase compliance with control contracts andthe centrally agreed procurement process.
“Suppliers love it for that reason,” she says. “In other situations, often they’ll winthe 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 totheir own and client feedback. Updates to the software are automatic, without the client necessarilybeing aware that changes have been made.
Unimarket has a patent pending on one particular piece of functionality within its system aroundthe idea of ‘bidding together’. This allows buying groups or suppliers, to get together and putout different prices based on a bulk purchase.
Most of its intellectual property protection is based on obtaining market penetration and makingthe purchasing and supply process easy and cost-effective, “which is going to make clients stickwith us,” she says.
The company aims to become the number one procurement software supplier in both the corporate andpublic sector in New Zealand within two years. Its American goals are not quite as lofty, though itis definitely aiming to be the dominant supplier in the higher education market.
The company is one of 10 finalists in the University of
If it wins a prize, it will even more strongly target growth in the USA market. “We’d havemore 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 hugepotential; to be able to be in New Zealand and give us a United States presence.”