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Prisco moving into procurement

Rukmini Priyadarshini

BANGALORE, Aug. 15

PROCUREMENT infrastructure company, Prisco, is moving away from offering online auctions to procurement services. It expects to bag inventory management outsourcing deals from manufacturing companies in India, US and the UK.

``We offer inventory management, material quality inspection and delivery as well as vendor management services to the engineering and manufacturing sector,'' says Mr Dhruva Talwalkar, Managing Director.

With about 300 vendors in India, Korea, Taiwan, Malaysia, Sri Lanka and South Africa, Prisco expects to close inventory management outsourcing deals in the UK and US shortly. It also has several large and small buyers in India - ranging from the eight co mpanies in the Kirloskar fold to KG Khosla, according to Mr Talwalkar.

Moving away from online auctions is dictated by the need to ensure sustained revenues in the future, says Mr Talwalkar. Its business model is not unprofitable: The former dotcom has been cash positive from day 1, has broken even in the first quarter, and has exceeded revenue targets by 55 per cent, according to Mr Talwalkar.

The shift and repositioning has been because ``we could not offer existing customers the same 15 per cent savings year on year - especially after we had done some vendor management as well,'' says Mr Virupaksha Gowda, President and CEO.

``So, either Prisco would have had to keep looking for new customers - an expensive proposition - or increase the range and bandwidth of high value services to a smaller group,'' Mr he says.

``We see that the `kitting', logistics and inventory management business will be our breadwinner in the future,'' according to Mr Gowda. ``For an engineering company, inventory management is necessary but hardly a core competence. It makes sense to let u s handle it for them while letting them put their resources to better use,'' says Mr Gowda.

The online auction will continue to earn revenues - about 10 per cent of total revenues, down from 80 per cent now, says Mr gowda. But Prisco is focussed on procurement infrastructure services - it is setting up procurement, quality inspection and wareho using facilities in Pune, Belgaum and other centres. ``We are close to signing several inventory outsourcing deals,'' said Mr Talwalkar.

Demand aggregation through its portal also accounts for 10 per cent of Prisco's revenues - and that share will hold steady, he says.

The thrust of the business will be on ``expanding out role to develop vendors as well as improve buyers' operational efficiencies, Mr Gowda says. Many organisations have implemented ERP tools in their organisations but these look at transactional efficie ncies according to him: ``We aim for a direct bottomline benefit by offering savings on input costs,'' he adds.