UK-based software vendor Virtual Supply Chain is using an unusual model for attacking the Australian market, whereby traditional logistics firms in vertical industries partner systems integrators and act as ASPs to other companies in their vertical.
Virtual Supply Chain intends to be a markedly different player to existing B2B vendors in the Australian market by concentrating on a three-tiered ASP model that leverages the existing relationships logistics companies have with their customers.
Rick Sibley, managing director of Virtual Supply Chain Australia, said B2B software vendors do not have enough history in supply-chain management and is not surprised recent attempts at hosting procurement solutions have not been successful in the Australian channel.
"You have ERP vendors trying to re-invent themselves as CRM experts or e-procurement experts," he said. "Then you have the open portal players at the top-end, like Ariba, Commerce One and Oracle, who want to control the relationship between suppliers and buyers. We find these players don't cater for fulfilment processes very effectively. Our focus is on reducing the cost of the supply chain, and providing visibility down the entire supply chain. We've been in supply-chain management for 22 years."
In its UK operations, Virtual Supply Chain owns its own channel arm, but internationally the vendor is looking to new channel relationships. So far the company has signed technology partnerships with Progress Software, IBM GSA, and Cable and Wireless Optus, and has announced its first Australian ASP partner in IT distributor Technology Trading House.
"No one partner or hosting organisation can cater for all of our potential customers' needs," Sibley said. "So we are organising multiple-tiers of hosting partners."
Virtual Supply Chain will work with those companies that have knowledge of supply chains in a particular vertical industry. Companies such as distribution or logistics firms will be supported by technical infrastructure providers, like IBM GSA, to act as ASPs to companies in their verticals. The logistics/distribution partner will concentrate on the sell and the customer relationship, while the technical partner will host the solution.
"What we're after are major distributors in particular verticals who wish to further penetrate their market, and wrap services around our product," said Sibley. "Logistics companies, for example, are trying to step outside the square and become inventory management organisations for customers and their customers' suppliers."Photograph: Rick Sibley, managing director Virtual Supply Chain Australia