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IMI Hopes Vivaldi Plays Well for Reverse Auctioneer

Written By: Steve McVey
Published On: May 4 2000

IMI Hopes Vivaldi Plays Well for Reverse Auctioneer
S. McVey - May 4, 2000

Event Summary

Industri-Matematik, the $75 million vendor of advanced order management, CRM, and warehouse management applications recently announced the sale of its e-fulfillment solution to CoShopper.com, a reverse auctioneer with operations in Norway and Singapore.

CoShopper entered the Asian market by acquiring BuyItTogether.com, a reverse auction site in the vein of U.S.-based Mercata. Reverse auction sites like CoShopper, which link product price to demand in a sort of real-time volume discount, offer an attractive alternative to online superstores and traditional auction sites for certain goods.

CoShopper has licensed IMI's eFulfillment applications to help it manage the distribution and delivery of items to successful bidders in a rapidly expanding geographic area that will include eight additional European countries before August 2000 and another seven countries by year end.

Market Impact

Though CoShopper.com is a relatively small contender amid the multitude of online auction houses, the deal has the potential to make or break Stockholm-based IMI's ability to sell in Asia. All evidence suggests that IMI has taken the proper steps to ensure a successful experience at CoShopper.

First, IMI will deliver its advanced order management application, the most mature of its products, in release since 1997. The stability of the product coupled with IMI's extensive implementation experience greatly improves its chances for a smooth conversion at CoShopper, an event that could be critical for earning the confidence of other Asian firms.

Second, the move aligns well with IMI's stated goal of penetrating into Asian markets to bolster its revenues, which fell by nearly ten percent from 1998 to 1999. IMI derives 97% of its revenues from clients in Europe and North America, with the remainder from Australia.

The opportunity for IMI to demonstrate proficiency in enabling global distribution provides another strong incentive for the company to succeed, as this will place it on a par with competitors such as Canada-based, Descartes Systems Group, who derives 80% of its revenues from e-commerce-related businesses. Global logistics is becoming a hot area for software companies, and both supply chain management mainstays and startup companies are launching applications to address this space. i2 Technologies plans to add global logistics features to its FreightMatrix technology and a new firm, Global Logistics International, focuses entirely on software providing these capabilities.

In spite of the potential for the deal, success in Singapore may be easier to achieve that in other parts of Asia. The Singaporean government has passed legislation to foster growth of the Internet economy, though some barriers to entrepreneurs still exist, including restrictions on land use and building controls. Singapore's somewhat atypically high level of Internet adoption limits its value as a proving ground for IMI in Asia, but still offers a foothold opportunity. Countries like China (without Hong Kong) and even Japan will prove more challenging, although each has strong potential for B2C due to their high populations.

User Recommendations

Users who sell products to consumers over the Internet, such as auction sites or e-tailers, should review their ability to deliver products to customers in a timely manner and maintain updated online product inventories. IMI and other supply chain management companies offer applications that can provide visibility to product inventories and plan distribution and delivery to consumers as well as support online order querying. Users should be cautious in selecting a partner to ensure that its back-end fulfillment applications can be integrated successfully with their Internet store fronts. Many vendors, including IMI, have only recently assumed roles as "e-business enablers."

IMI trains and certifies third party consulting firms in the U.S. and Europe (e.g., Cap Gemini and Andersen Consulting) and maintains a customer support center in Australia, but does not have an appreciable service and support network in Asia, an issue that may present a problem for some businesses in the region.

IMI does support double-byte characters in its AOM product, but has not yet extended this functionality to its WMS and CRM applications. The company is working to homogenize the multi-language capabilities of its suite and is also adopting the Unicode standard for code internationalization.

Editor's Note:
This article has been modified from its original form since the original publication date.

 
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