Nicole
Lindsay: Financial Review, September 10, 2002
The national push to move all levels of government to electronic
purchasing has gathered momentum with Victoria's peak association
for councils choosing a provider.
Adelaide-based procurement software developer
Strategic
Ecommerce beat multi-national IT companies to sign up
the Municipal Association of Victoria, a body covering 78
local councils.
The deal - still dependent on the success
of three pilot projects in Mildura, Whittlesea and Northern
Grampians - follows a similar contract signed in South Australia
where there are 68 councils.
The deals give Strategic Ecommerce potential
access to 35 per cent of the Australian local government sector.
The national sector turns over around $15
billion a year with half spent on labour and the remainder
on procurement, according to the MAV.
Strategic Ecommerce has signed the MAV as
a licensee for its StraightBUY
and StraightSELL
products, which individual councils can roll out.
The buy-side application, StraightBUY, is
used by councils, while StraightSELL is sold to suppliers.
StraightBUY can be fully integrated with councils' back-end
financial IT systems.
City of Whittlesea chief executive Graeme
Brennan said it was the ability to reduce purchasing costs
and the seamless integration of the StraightBUY software with
local government financial packages that made the contract
appealing.
"We had been looking for an e-procurement
solution following an analysis of our purchasing process that
showed a $56 processing cost per order," Mr Brennan said.
He said using the software had so far shaved
26 per cent off these processing costs.
Strategic Ecommerce is understood to have
beaten Oracle and GE to the contract, which is worth under
$1 million but will also include an annual subscription fee.
Whitehorse Strategic Group project manager
David Goble said many of the big multi-national systems were
too expensive for small Councils to even consider implementing.
" A lot of the suppliers just
do not understand the social and restricted financial resources
that some local councils operate under," Mr
Goble said.
He said some councils had budgets as small
as $8 million, scaling up to nearly $190 million for the City
of Melbourne.
Strategic Ecommerce software is operational
in about 12 different sites, with 30 councils actually signed
up.
The software is rolled out in about 12 of
68 councils in South Australia, including Whyalla, Port Adelaide
Enfield and Port Augusta.
Strategic Ecommerce chief executive Andrew
Sendy said the company had been successful because it had
carried out the work that allowed it to integrate its procurement
software with the councils' financial systems.
He said councils had specific financial
systems that accounted for land valuation, and rate payments
and without the integration work there would be very few savings
in either time or cost.
Nicole Lindsay - Financial Review, September 10, 2002
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