SupplyOn's biggest challenge comes from Tier 1 companies that build their own supply chain management portals, says Kevin Reale, automotive research director at AMR Research in Boston.
"It's basically a price game," Reale said. SupplyOn will be able to attract more Tier 1 suppliers to use the portal to reach their own supply base as long as it can show that it is adding value at a cost less than doing it in-house, he said.
AMR Research has found that companies are doubling their portal budgets in 2006, suggesting there is an opportunity for SupplyOn to grow, Reale said.
"SupplyOn has matured; it has grown based upon inputs from their current client base," Reale said.
In Europe, SupplyOn is a few steps ahead of its U.S. office. SupplyOn is courting automakers, additional Tier 1 suppliers and even companies outside the auto industry.
BMW AG, for example, is using SupplyOn in Europe for electronic data interchange with about 500 smaller suppliers that don't have the financial resources to install direct data connections with the automaker. SupplyOn is talking with BMW about other functions it could use, says Quicken.
Companies other than SupplyOn's founding members now are using SupplyOn in Europe. Some are in industries other than automotive. One is the Schindler Group, the elevator and escalator manufacturer, which is using SupplyOn for electronic invoicing with digital signatures.
"They are a different industry that wants to take advantage of the proven automotive processes," Quicken says.
The portal operates on a pay-as-you-go basis, so a Tier 1 supplier could use just one application, such as the supplier performance monitor, or use all of them, Quicken said.
Quicken said annual costs can range from about $50,000 annually for one application to as much as about $1 million for all applications implemented around the globe.
You may e-mail Ralph Kisiel at [email protected]