Lack of volume forces school trustees to abandon STAbuy

By ADAM GIFFORD

The School Trustees Association has written off its $1 million STAbuy electronic marketplace and will transfer its catalogues and customers to GSB Supplycorp.

President Chris France said 750 of New Zealand's 2400 schools signed up for STAbuy, but too little volume was going through the site to make it pay.

"We need to provide a broader range of items at more competitive prices, which GSB Supplycorp can do for us," France said.

"It is a mindset shift for users to buy things online.

"It is taking longer than anyone predicted. This arrangement will give schools the opportunity to make that shift."

The failure of STAbuy casts further doubt over the planned GoProcure Government procurement service, which has the same technology and consulting partners, Oracle and Cap Gemini Ernst & Young.

Government agencies have been slow to sign up for GoProcure, and the Cabinet is yet to decide whether it will proceed with the $7.5 million project.

France said under the memorandum of understanding signed last week GSB Supplycorp would service schools at no charge to the association.

When STAbuy was initiated in 1999 there was considerable enthusiasm for the idea of electronic marketplaces.

The project was paid for out of reserves built up from contracts with clients such as the Ministry of Education, schools and Industry Training Organisations.STAbuy drew its revenue from a 1 per cent levy on suppliers.

It was supposed to be a joint venture with Cap Gemini Ernst & Young, but in March the consulting firm pulled out and invoked a guarantee under which the association was required to pay it the development costs of $775,000 plus GST.

The STAbuy venture drove the association into a $801,077 loss for the year.

PSB Group marketing manager Matt Caughey said GSB Supplycorp was a natural partner with the association because of its existing dealings with Government organisations, its investment in the SupplyNet electronic marketplace and its experience in supplier management.

"There is not room for two different marketplaces for schools.

"We are already dealing with 300 schools, and this will provide us with more focus in that area."