Five of Australia's largest corporations have combined to create a new online procurement buying hub, to be called Cyberlynx.
Commonwealth Bank Group, Woolworths, Lion Nathan, EDS Australia and the conglomerated Telecom New Zealand Group and AAPT have signed a heads of agreement to build the exchange, which is likely to compete with the likes of corProcure in magnitude.
The newly formed partnership, known as Cyberlynx Procurement Services, will be funded by Commonwealth Bank (29 per cent), Woolworths (29 per cent), Lion Nathan (19.4 per cent), Telecom NZ/AAPT (16.1 per cent) and EDS (6.5 per cent) and will build a common procurement platform around the Ariba B2B Commerce platform. There is also a possibility that more players will become involved at a later date.
Several of the members already use the Ariba Commerce platform for electronic procurement, and Rod Hirst, Ariba's Australia/NZ managing director, is confident the others will be convinced to follow suit. A source from Lion Nathan has indicated this may not necessarily be the case for all members, as Lion Nathan already has a comprehensive ERP system in place which is compliant enough with the Ariba platform not to need a full-blown buy-side implementation.
AT Kearney has been contracted to negotiate with suppliers on the members' behalf, who expect to save around 7 per cent on sourcing indirect supplies through the exchange, which will cost around $20 million to develop.
Hirst suggests members of the exchange will be free to choose their own system integrators for the project, but not all of the members have yet indicated who they will contract for the job, "although the obvious choice for EDS would be to use their own people", he said.
EDS will also be integrating the buy-side systems at the Commonwealth Bank, as well as playing a large role in the implementation for Telecom New Zealand (TCNZ). Ongoing hosting of the Ariba platform at TCNZ will be managed by the eSolutions alliance (Telecom, EDS and Microsoft). The systems integration project for TCNZ will be carried out by EDS and Telegroup.
AAPT's platform will be delivered and hosted by its own subsidiary, Connect.com, with some help from Hewlett-Packard. Lion Nathan has not yet chosen its systems integration plan, while Woolworths was unavailable for comment.
Barry Scott has been appointed as acting chief executive officer for Cyberlynx, and expects the exchange to offer opportunities to a wide variety of Australian businesses.
"Its facilities and services will enable Australian businesses to participate in leading-edge Internet-based procurement with cost and speed-to-market efficiencies," he said. "It is proposed to offer cross-market Internet purchasing opportunities."