SupplyNet pilot lands NZI deal

By ADAM GIFFORD

New Zealand Insurance will install SupplyNet's Enterprise Buyer Desktop (EBD) electronic procurement system, developed by Commerce One and SAPMarkets, in its offices throughout the country.

SupplyNet's chief operating officer, Carl Mitchell-Turner, said it had taken potential customers a while to figure out the value of e-procurement to their business.

"NZI is just the first of our enterprise customers to move beyond pilot.

"We have five more pilots going now and a couple of promising demonstrations."

NZI's accounting and administration manager, Tim Griffith, said the company used the three-month pilot to see whether EBD could improve efficiency, savings and procurement processes.

The company spends about $20 million a year on office supplies, furniture and other indirect costs.

For the pilot, procurement staff in NZI's Auckland office went to three of SupplyNet's 61 suppliers - Cafe Express, Corporate Express and Liquorland - which already account for about $1 million of NZI's spending.

"We want to rationalise the number of suppliers we use," said Mr Griffith.

"When a company is in a lot of locations, e-procurement means you can bring the spending under one contract with each supplier."

NZI also wanted to test whether the system would cut the time, money and paperwork associated with ordering goods and services by fax or phone, and whether it would simplify authorisation processes and give better oversight of purchasing expenditure.

"We also see the system has the potential to be extended into claims purchasing," said Mr Griffith.

The insurer spends about $200 million a year on claims, including cash reimbursements.

More than 30 offices will get the system.

NZI had settled on SupplyNet because of its origins in the procurement-oriented Professional Service Brokers and the Government Stores Board.

"They have a pedigree of people doing purchasing, rather than being at the core an IT provider," said Mr Griffith.

It was too early yet to estimate savings.

In the longer term, NZI wants to integrate EBD with its financial systems to reduce manual invoice matching and payment.

Mr Mitchell-Turner said that while NZI had bought a full enterprise licence, other companies may be more comfortable with SupplyNet's new EBDXpress model, which links a limited number of users with a small number of suppliers for about $500 a month plus initial consulting fees and continuing data fees.