French President Jacques Chirac presented eu-supply.com with the first prize at this year’s Net Economy Congress meeting. The award judges the maturity, strategic dimension and transparency as well as the integrity and protection of private transaction data of ecommerce sites.
eu-supply was cited earlier this year by industry analysts Jupiter MMXI as one of the top 10 ecommerce platforms most likely to succeed in the rationalised dotcom market. The company is already working with leading construction companies throughout Europe, providing them with eprocurement capabilities for products and services.
Naomi Thomas, eu-supply UK managing director says, “This award further endorses the benefits e-procurement can bring to construction. The fragmented nature of the industry makes the adoption of internet based solutions an ideal procurement method for goods and services in this sector.”
“Over the last year, we have seen a marked change in attitudes of industry professionals at all levels to our service. Initially our proposition was met with confusion and scepticism. Having worked with many of these people over the last year, we have helped them to see how our services bring benefits to their organisations whilst delivering cost and process savings and adding value to the way they procure.” concludes Thomas.
eu-supply currently works with 60 of the top 200 contractors in Europe, whose annual procurement spend is at present worth €70billion. eu-supply predicts that a large proportion of this business could be transacted online. Conservatively speaking, if only 10 per cent of procurement spend was transacted online (eg. €7bn), this would generate revenues for eu-supply well in excess of €100m.
eu-supply has combined funding of €24million and is the largest investment in an e-commerce company in the European construction industry – by Internet Capital Group (ICG) a leading investor in successful e-ventures, who continues to support the eu-supply business model. The last round of financing was €20million raised in August 2000.
Main contractors traditionally operate on very low profit margins, at around 1.5%-2%, due to the competitive nature of tendering for contracts. Project management and organisational co-ordination are hindered by a lack of predictability – site locations and scope of work are constantly changing.
In the UK, house builders typically make higher margins, at around 10%, as they have greater control of their selling prices. Project management is typically more co-ordinated than for main contractors due to higher degree of predictability. House builders are typically seeking better ways to communicate with their supply chain and leverage their buying power with annual framework partnership agreements on key product categories.
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