Another e-procurement hub sees the light of day

Johannesburg, 21 Aug 2000

Miraculum, a business-to-business (B2B) e-procurement company consolidating the strengths of Dimension Data, Nedcor, Old Mutual and J&J, a services and e-commerce company founded by Jay Naidoo and Jayendra Naidoo, has been launched.

Miraculum is touted as SA`s largest e-procurement marketplace company, and targets its promise of significant cost savings and purchasing efficiencies to corporate and small and medium enterprise (SME) clients, as well as to government and empowerment initiatives.

The three listed groups will be the initial participants creating a multi-billion rand electronic marketplace, while J&J will provide access to a complementary customer base. The primary focus, according to the company, will be on materials, repairs and operations spend.

"Combining a technology company with the purchasing critical mass of Old Mutual and Nedcor will make this the largest B2B initiative launched thus far in SA," says Miraculum MD Brandon Spear.

"Miraculum electronically brings buyers and sellers together, facilitating the flow of information and procurement orders. Subscribers to the service can maximise supplier leverage and minimise processing costs."

According to Spear, major SA corporates spend tens of millions each year on procuring non-core products and services such as office supplies, PCs, copiers, travel and insurance. Industry benchmarks show an organisation can save up to 20% of its procurement costs by implementing an e-procurement system.

Vic Lumby, Old Mutual CIO, says the strength of the joint venture will ensure Miraculum`s success. "The groups involved will benefit from the significant saving in their own procurement costs by joining this electronic marketplace as anchor tenants."

Barry Hore, Nedcor executive director of technology and operations, says the launch of Miraculum is an important milestone in Nedcor`s e-commerce strategy.

"E-procurement is an integral component of our e-commerce solution, and being an initial participant gives us the advantage of offering a 'tried and tested` e-procurement service to our clients," he adds. Nedcor will be the preferred payments provider for Miraculum.

J&J executive director, Jayendra Naidoo, believes the benefits of implementing an e-procurement solution apply not only to corporates but also to government departments, parastatals and SMEs.

"E-procurement portals in the public sector would aggregate demand across different departments and divisions and will reduce unauthorised expenditure. This will result in reduced costs, increased efficiencies, and will facilitate tighter financial control of the government procurement process," he explains.

Naidoo says Miraculum will make e-procurement practices and facilities available to SMEs. "By aggregating their buying power, SMEs can access value-added services at a reduced rate. As importantly, Miraculum will give SMEs access to new buyers and markets and in this way stimulate economic activity."

The announcement comes shortly after the launch of several similar initiatives. TradeWorld, the Johnnic B2B portal, recently announced a joint venture with Denel subsidiary Ariel Technologies to create an e-procurement hub known as Hub-21.

Spear notes that while there`s likely to be a proliferation of e-procurement service providers in the future, "a major differentiator is that our solution is a combined exercise between procurement and technology specialists".

OmniLink/IS, jointly owned by Dimension Data, Nedcor and Old Mutual, launched its online trading environment, GoZone, in July. It`s expected that Miraculum will leverage off this skills base, incorporating expertise in both the quality-of-service virtual private network (VPN) and Internet arenas represented.

"This is backed by the know-how of experts from the Nedcor and Old Mutual buying departments. Nedcor`s head of procurement, Rod Ward, who has been seconded to Miraculum, understands the complexities of negotiating and managing procurement contracts and supplier-customer relationships," says Spear.

In line with Dimension Data`s recently announced e-business alliance with Oracle, Miraculum will be powered by Oracle`s B2B exchange platform and technology that will enable online auctioning, reverse auctioning, contract and spot buying capabilities. It will also facilitate collaborative supply chain planning and product design functionality allowing accurate capacity and demand planning for participating suppliers.

Spear says the e-procurement service will be targeted at the current 70 corporate users of the OmniLink VPN as well as the 1 700 corporate and business clients of IS. The service is currently in beta testing phase.