LATE last month, the Finance Mi- nistry made it compulsory for its 35,000 suppliers throughout the country to be ePerolehan-enabled or risk losing out on possible government-related business opportunities.
At first glance, it was a windfall for Commerce Dot Com Sdn Bhd (CDC), which was to implement and manage ePerolehan, an electronic procurement system developed under the Multimedia Super Corridor (MSC) e-government flagship application project.
Eight consortiums bidded for the e-government concession project in 1996, and CDC emerged as the winner. Its shareholders are Puncak Semangat (81%) and NTT Data (19%).
However, things did not turn out as expected.
The response from the suppliers was a far cry from the intended rush.
CDC has more than 35,000 government suppliers registered for ePerolehan but only a mere 6,000 suppliers are active users at the moment.
CDC chief executive Datuk Mohd Salleh Masduki has a tall order to fulfil. First, to make sure the suppliers are active users of ePerolehan. Second, ensuring CDC is profitable or at least break even within this year.
Salleh said that when the ministry issued the directive letter to the suppliers, he expected it would immediately pick up steam, and that suppliers would quickly make full use of ePerolehan.
Time and again, it has been noted that doing business on the Internet is inevitable and the ministry's urge to suppliers to leverage on the pervasive presence of the Internet sounded like a broken record.
Salleh, however, remained optimistic and would like to think otherwise.
He said it would take time for people to get used to and be comfortable around new technology.
We understand that the biggest challenge most suppliers face is unfamiliarity with new technology. However, in a rapidly evolving market whether global or domestic, measures have to be undertaken to maintain and hopefully increase our business communities competitive advantages, Salleh told StarBiz.
Salleh said the slow pick-up was also due to the long festive seasons at the beginning of the year and he was keeping his fingers crossed.
He reasoned that government suppliers who were already conducting business online via ePerolehan were reaping the benefits of doing business online.
According to Salleh, sooner or later, these suppliers will realise the significance of ePerolehan to ensure their survival.
Through ePerolehan, suppliers would not only become accessible to procurement centres nationwide but they now automatically qualify as worldwide suppliers. With an increased base of potential buyers domestically and globally, suppliers are set to enjoy enhanced revenue opportunities, he said.
At the moment, there are about 4,288 government procurement offices in peninsular Malaysia.
The company expects that there will be more than 200,000 users by the end of June this year.
It has identified about 513 government offices having procurement services, and by the middle of this year, CDC predicts the rest of the government offices in the country will be online to ePerolehan by the third quarter.
CDC has started work in Sabah and Sarawak and expects ePerolehan to be available by the end of June.
Once a government procuring office is online to ePerolehan, they can buy everything from pencils to office furniture to spare parts through ePerolehan. The only items we are not dealing with are items of national interest fighter planes, submarines and petroleum products.
Everything else whether through a central contract (the whole government buying from a single contract), direct purchase (items costing up to RM100,000 that are not handled by the central contracts), quotations (items costing between RM101,000 and RM200,000) and tenders (items costing in excess of RM201,000) are to be purchased through ePerolehan, Salleh said.
Clearly, CDCs profitability solely depends on the volume of transactions done at ePerolehan. It derives revenue of 0.8% or a ceiling price of RM9,600 from the total value of transactions done at ePerolehan.
CDC employs 252 workers and that, he said, required high level of skills to be able to run the business and replicate its expertise for its potential international market.
He also said that CDC would continue to look for other money-making avenues such as selling its expertise and experiences gained from ePerolehan to foreign governments.
For instance, the Myanmar government has expressed interest in the ePerolehan idea, and a memorandum of understanding was signed recently.
But, his priority still lies in ensuring that ePerolehan in Malaysia will move according to plan and will be widely accepted.
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