For several frustrating years, I felt like the lone voice in the wilderness," Paul McGonnigal deadpanned when asked about the beginning of TradeWind. "I must have held more than 50 presentations for venture capitalists, explaining the benefits of electronic marketplaces to streamline MRO procurement and supply chain management. But the replies I got were consistent: "Sorry, but we are investing in business-to-consumer and technology plays. Procurement and supply-chain management are service plays with no sex-appeal.’" Before applying the benefits of the Internet and electronic commerce to reduce friction in the procurement process, McGonnigal worked for an IT reseller where he ran a profit center. During that time he became an expert in brick-and-mortar supply chain management and channel structures. He also identified the challenges and possible remedies for the disproportionately high amount of administrative support required for each transaction.

"The aggregate profit margins hovered around 12 percent," he said. "And it took a lot of people in the back-office to support and run that business. Processes and rules were in place, but they failed to adequately deal with exceptions." Making a list of possible improvements, McGonnigal targets the reduction of administrative and processing costs, simplifying authorizations, keeping track of transactions and better use of a business' most important asset – its people.

Eventually, the market caught up with his business plan, and McGonnigal was forced to act before someone else would. His vision took shape as an electronic vertical market place for nearly 50,000 small and medium businesses that spend $2 million to $20 million annually on order processing for IT-related and office supply MRO goods, based on an estimated average purchase order processing cost of $200. After finding the right investors, technology development partner and forming the necessary relationships with premiere distributors, identifying the best e-commerce platform for DOTS became a priority. During his search for an integration partner, McGonnigal connected with KeyCommerce of Nashua, New Hampshire, which recommended Intershop enfinity. "Time-to-market and the flexibility to integrate with buyers' and suppliers' business systems were the key requirements that spoke for enfinity," said Mansoor Khan, CEO of KeyCommerce. "With enfinity we were able to include millions of products from catalogs that are provided by hundreds of suppliers."

In phase one of the three-tiered roll-out, TradeWind connects with vendors, establishes the flow of transactions and tailors the product merchandizing to the specific customer requirements. Phase two calls for increasing the buying power of TradeWind’s customer base, adding enterprise accounting software and more non-production goods and services. In the last stage, TradeWind plans to leverage its domain expertise to re-sell the self-branded DOTS to other markets. "It is true that as a marketplace organizer we have to integrate with the back-offices of suppliers and buyers alike to add value to the supply chain management," McGonnigal noted. "But it does not stop there. With Intershop enfinity we can do a lot more to help our customers save money and time by creating a system that enforces multiple and unique sets of business rules, while leaving enough room to amend them whenever required. By eliminating redundancies and streamlining the decision making process, we use enfinity to take procurement and purchasing to a strategic level."

Source: Intershop Communications, Inc.