Cyberlynx bets on big players, predicts $2b revenue

B2B e-marketplace operator Cyberlynx says it could potentially be managing sales of $2.2 billlion over the next year, defying the performance of floundering operators in Australia's e-procurement market.

The company is confident it will expand into more procurement categories like car hire, courier and media services over the next year, according to the company's chief executive Christopher Deane Backed by seven of Australia's large companies - Commonwealth Bank Group, Woolworths, Lion Nathan, EDSA, Telecom New Zealand Australia, Carter Holt Harvey and Royal Sun Alliance - Deane claims the company will manage $850 million worth of stakeholder's purchases by the end of the 2000 fiscal year, and pump another 100 suppliers into the marketplace.

Rather than the now maligned public exchange model, Cyberlynx instead sees itself as an outsourced procurement department, or if you like your acronyms short - a PSP - purchasing service departmentThere is an important qualification here though. The $850 million is the potential spend it will be managing. At least initially there are opt-out provisions for the buyers.

"We're aiming at the top 75 per cent of corporate Australia from industries like manufacturing, IT and services which spend $85 billion in indirect purchasing a year - companies that can see they get the benefits of aggregated buying."

However, the linchpin will be the Cyberlynx's ability to boost its catalogue of services with 16 more categories, bringing the number of categories to 20, and attracting new, non-shareholder customers for the extra service areas, Deane said. Additional services would include office supplies, IT, travel and fleet management, property services, professional services, telecommunications, energy, and cleaning and waste management.

"As the categories roll out, which will take around a year, we'll reach (a potential) indirect $2.2 billion, and our sales volume and fee aggregation will get bigger."

Over the next four months the company will attempt to capture market share in New Zealand in the IT, office supplies and travel management areas.

Cyberlynx says its competitive strength lies in aiding customers and suppliers with "strategic sourcing" or transaction management.

"Our whole vision is to be part of the initial purchase payment cycle. Customers and suppliers can talk to each other, and both sides get better payment record keeping, forecasting and financial event management than the client could do in-house," he said.

Deane says that customers can expect to save between 7 and 15 per cent in purchasing costs for all service categories.

"For the first time, customers can really see where their money is being spent."

The only barrier to Cyberlynx's expansion, he says, is where stakeholders have existing procurement suppliers - agreements that may delay their integration into the marketplace. However, he maintains: "They are all coming off those agreements."

* Siobhan Chapman contributed to this article.

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More about Carter Holt HarveyCommonwealth Bank of AustraliaCyberlynxEDSALion NathanRoyal Sun AllianceTelecom New ZealandWaste ManagementWoolworths

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