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Multinationals ‘putting squeeze on supply chain sector’

  • 14 January, 2008 14:02

<p>Supply chain organisations are being squeezed by the tactics of multinational software companies, according to Mid-Comp International CEO Steve Bridges.</p>
<p>He says a number of major vendors have been buying up competitors for their customer base rather than their solutions, or neutralising what they perceive as a potential future threat to their market share, and either immediately or gradually closing down the competitor. Clearly the multinationals’ tactics are squeezing supply chain organisations by reducing their choice of systems.”</p>
<p>“There are plenty of war stories of customers being pressured to migrate to the 'new' corporate solution at enormous expense for no genuine commercial gain, especially relevant when the replacement system requires a fundamental shift in technology platform. The financial implications can be crippling,” says Bridges.</p>
<p>“This is creating uncertainty and fear in the market place, with end users asking potential suppliers ‘will your company be swallowed up if I buy from you?’ Hostile takeovers have a negative ripple effect throughout the industry.”</p>
<p>He says: “Above all, customers want stability from their IT supplier. This extends to giving assurance that the technology platform currently running their business software is not at risk. Most have made a significant financial commitment to a particular vendor’s solution, and are not that keen on throwing out the baby with the bath water, although in some instances they are not given a choice … their existing software base and/or technology solution has simply been abandoned, decommissioned, is being phased out. Call it whatever you like, the result is the same: no ongoing support."</p>
<p>On the flip side, according to Bridges consolidation can also have a positive impact. Mergers of progressive, like-minded enterprises with common technologies can yield genuine benefits. Where products complement and enhance the overall offering, customers achieve new application functionality from such mergers, and can continue as normal along their chosen technology path.</p>
<p>“There can be no guarantees that an acquisition frenzy will lead to good or bad outcomes, but an important issue is ensuring that the customer base is kept well informed by means other than third hand rumour mill gossip.”</p>
<p>About Mid-Comp International</p>
<p>Mid-Comp International Pty Ltd (www.midcomp.com.au) is an Australian developer and supplier of business software solutions that encompass intelligent supply chain, managed availability and IBM systems management. Recently Elders Ltd chose the firm’s Odyssey intelligent supply chain solution in preference to systems from 100-plus vendors including SAP AG and Lawson Software. Odyssey is believed to be the worlds largest pure Java system. Stockman, Mid-Comp’s scaled down version of Odyssey, is targeted at SME supply chain customers. Both solutions are based on Internet delivered technology. Mid-Comp enjoys a strategic relationship with IBM, and supplies products and services to a client list that includes dominant Australian commercial enterprises. The company also supplies product to organisations in 26 countries, including many Fortune 500 companies.</p>
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<p>For more information</p>
<p>Steve Bridges,
CEO, Mid-Comp International Pty Ltd
Phone: (03) 9915 5200 or 0407 498 400
Email: steveb@midcomp.com.au</p>
<p>David Frost
PR Deadlines Pty Ltd
Phone: (02) 4341 5021</p>

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