THE Central Purchasing Company and the Danish purchasing company Dansk Indkoeb recently formed a joint venture, SMARTbuy Uganda to offer procurement services to local companies. Cyprian Musoke spoke to Steen Egsdal, the business development director.
QUESTION: How does SMARTtbuy operate?
It is a client service operation, where we assist our clients in obtaining common user goods and services. The company links its clients to suppliers through a unique ICT platform to pre-negotiated framework contracts.
How do you do that?
- By combining purchasing power of our clients, then go to the market with this power, negotiating for products which we then make available to our clients through our internet network.
Thatâ€™s our structure. Itâ€™s a fixed fee-based structure where our client pays a fixed fee.
How often does the client have to pay this fee?
- It is annual, and itâ€™s so small as compared to the savings and benefits clients get. Small organisations pay a small fee; larger organisations pay a larger fee.
What is your target clientele in Uganda?
- Our target clientele is the top 1,000 organisations in Uganda.
How many have you attained so far?
- We have received expressions of interest from over 94, and we are building up the supplier base amongst high esteemed suppliers because our clients are the top range 1,000.
Do you intend to use local or foreign suppliers?
- We focus on attracting local suppliers on the Ugandan market.
But when the suppliers here are not in line with the market price we envisaged, we shall procure from neighbouring countries or the rest of the world because our job is to serve our clients the very best the market offers. If we have much more attractive prices outside, we will go for that.
What is the reception from the Ugandan market?
- What surprised us a little was the time it takes to seal a contract both on the sides of clients and suppliers.
It seemed to take a little longer than elsewhere, reason being most negotiations concerning common user goods and services; most of the Ugandan managers would like to have such agreement co-signed by someone higher than them, who is often outside Uganda or on a business trip.
Why is this so?
- It seems the general manager, or one running operations here often does not have power to sign, and may have to send to some one at the head office to sign which takes time. Because we are a 100% computer-based entity, power load-shedding is severely affecting.
Internet access here is too slow, and very highly priced, so profitability of connecting to the internet services is limited.
What surprised when you started operations?
- Some people have been handling the procurement of common user items look at the concept as â€œsomething which will take away their bread.â€
What benefits do you bring to the Ugandan consumer?
- There are two main advantages. First, is saving, by bringing a transparent market price to our client. Secondly, we save the clientsâ€™ time by helping them avoid all the process of managing the supplier base.
SMARTbuy to revolutionalise procurement