Sydney-based IT consultancy and solutions company ICSGlobal has signed a deal with General Electric's ecommerce brand, GE ECXpress, that will "change the nature" of ICS's business.
ICS, which already provides services for GE ECXpress's ecommerce products, said the companies plan to develop a health industry exchange portal. ICS is investing $2 million in the initiative and will form a joint-venture company to build, own and operate the site. The companies also plan to sell equity in the site to joint-venture participants from the health industry.
Tim Murray, ICS's CEO, said the company is building an online business model that will "accelerate the uptake of ebusiness in Australia". He said ICS was in the process of signing deals with a number of health industry corporations and organisations such as private health funds and pharmaceutical companies.
Murray said financial institutions, including a major bank, have also shown an interest in building revenues from online transactions through the site, which he said was better described as an "online trading exchange". The company has also recently recruited senior health industry executives and established a special health division to drive the initiative, Murray said.
ICS chairman Dean Pritchard said the board was very confident about the future of the company, and in particular believed that the development of industry exchange portals offered great opportunities for growth.
"This development extends the company from reliance solely on consulting, with its inherently lumpy project income, to a share of an income stream based on business transactions through the portals, ASP income, advertising, call centre support and so on." Pritchard said. "We expect it to lead to increased profits in the future."
However, in the short term the investment means ICS will record its first loss in its 10 year history this financial year. The company, which announced it may not achieve its full year profit forecast in February, said the portal investment, and "reductions and delays in consulting income from GST and other areas", meant it would end the year in the red.
ICS, which raised $6 million through its listing in January this year, is also planning portals for the energy, mining, construction and aviation industries.
The company's share price was trading steadily at $1.71 in afternoon trading.