Ariel Technologies, a leading IT solutions provider in southern Africa, has concluded an e-hub agreement with Infobank, which gives the information technology giant the rights to build and operate an e-commerce hub driven by Infobank Africa`s InTradeT e-hub. Infobank International is the leading European software vendor specialising in Business to Business e-commerce, and has recently chosen South Africa as its corporate headquarters for Africa.
In as little as three weeks, the hub, as yet unnamed, will be live and fully operational and ready to support its first client - the state-owned industrial conglomerate, Denel, which has a turnover of R3,5-billion. It has committed to run a pilot with two of its subsidiaries, Kentron and Irenco, thereby providing Ariel Technologies with the initial transaction base which will make it the largest hub in Africa yet.
Says Ariel Technologies CEO, Zeth Malele: "Our initial six months are expected to record transactions in excess of R500-million. Clearly as a greater number of client organisations join the hub, this figure will grow substantially. In the first two years it is quite possible that the transaction base will grow to as much as R5-billion a year.
"Ariel Technologies has been involved in e-commerce for some time and we have a thorough understanding of the needs of our clients. This is more than a shopfront, a static price list or an order taking system. This is a dynamic negotiating tool, which will enable companies to become fully e-enabling without having to develop in-house websites with full e-commerce capability.
"Furthermore, we have extensive experience in the integration of e-commerce with company systems and we will be using these skills and tools to offer direct delivery to applications without additional charges.
"We are already in advanced discussions with a number of organisations in a variety of different industry sectors and various niche portals will be established to serve these industries. The interest in joining the hub has been extremely positive and this can be attributed to the fact that it offers many unique benefits to the member organisations and suppliers alike.
"A key benefit for large member organisations is the ability to reduce procurement costs from a South African average of R480 handling cost per order to as low as R40 per order. In the UK Infobank has already demonstrated that it can reduce handling costs from lb75 to lb10."
Dr Douglas Boateng, CEO of Infobank Africa notes: "We have opted to partner with Ariel Technologies in this hub agreement because it has the size, capability and an established customer base to clearly reflect the substantial benefits of our systems and software. I have no doubt that this hub will prove to be extremely successful and one of the flagship hubs on the African continent."
Infobank International`s e-hub software supports over 100 currencies and more than 52 languages. An e-hub to support SME`s went "live" in Ireland on April 1 this year, funded by the European Economic Community (EEC). More hubs are being established in India and the United Kingdom, the latter to handle procurement for the UK Government`s Buying Agency worth an expected lb13-billion.
Says Pottie Potgieter, financial director of Denel: "We are hoping to achieve major financial benefits by reducing the costs involved in generating and processing orders. Running pilots with Kentron and Irenco will provide give us with an accurate assessment of the savings by which to measure the impact electronic procurement would have on the group. Should this reflect positively, B2B e-commerce would be rolled out to the rest of the group."
Says Malcolm Dunkeld, who will head up the hub: "Suppliers, particularly SMME`s, benefit from having access to e-commerce and often a global market at a minimal capital expenditure."
Key to the concept is that the software is free to suppliers, while catalogues and pricing are captured into the hub and can be modified and tailored depending on which client accesses the price lists. This is critical as it meets the very real need to be able to offer preferential pricing to larger clients.
The purchaser or member organisation signs a membership agreement and pays a form of subscription for access to the hub. Suppliers pay a "transaction tax" which is a percentage of each sale to the hub, which means that even small suppliers will find it cost-effective.
Furthermore, as hubs grow around the world each can link into the other, creating a global, competitive virtual market with the ability to offer dynamic pricing.
Says Mr Dunkeld: "We are already speaking to organisations in Africa and as agreements are concluded and these member organisations join the hub, it will offer many smaller suppliers easy access into Africa."
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