Substance over sizzle: Can Elcom replicate its success with Scotland? by Jon Hansen

Posted on October 17, 2013


As many of you already know, beyond this blog I have written 5 books in total – two of which were as a ghostwriter.  Remind me to tell you one day why I prefer the anonymity of assuming the ghostwriter persona.

In the meantime, I think that it is safe to say that I know a thing or two about the publishing business.  While there is little that surprises me I must admit that a comment from one publisher has, to this day, left me somewhat dumbfounded.

When I asked the publisher in question what they look for in a new book, she responded by telling me that the public  profile of the author is critical.  What about the content and more specifically the quality of the writing I inquired?  Well said the publisher, while it is nice to have quality content that is well written, it is secondary to the author’s celebrity.  In short, sizzle trumps substance.

It was an interesting revelation in that the procurement world – and in particular the selection of an eProcurement solution – seem to reflect a similar mindset.  After all, one cannot help but wonder why a prospective client would go with say an Oracle or an Ariba given their somewhat spotty track record of successful implementations.  As reflected in my earlier posts such as  “It’s the end of the world as we know it . . . at least for traditional analyst firms and bloggers,” and “Madison Avenue ooops . . . make that Gartner, names Oracle as a leader in supply chain planning,” the parties responsible for perpetuating this skewed view of the world is no secret.

But what are the consequences of this selective reporting?  More to the point, what impact has the “pay for praise” model within the procurement world had on the more technologically advanced smaller players?

I mean we are not exactly dealing with a true meritocracy here are we.  Giving these Emerging Titans as I have called them in the past a voice, is one of the reasons why our sponsorship fees are relative pennies compared to the more traditional industry blogs whose focus tended to be primarily on the big boys.

In my September 23rd, 2013 post “Welcome to the new era of configurable private label eProcurement solutions” I talk about one such enterprise; Elcom.  Here is an excerpt from that post:

Let’s take a trip across the pond to consider the Elcom story.

Elcom’s origins and continuing success is based upon their long-standing 12-year relationship with the Scottish Government, in which they have become the engine behind the highly successful eProcurement Scotland initiative.

While there is no doubt that the company’s solution has found its proverbial sweet spot with the Scottish Government in terms of showcasing the potential of its technology, one might be hard pressed to quantify similar results beyond the framework of this primary relationship.  This of course is the critical point.  Is Elcom’s solution scalable beyond a uniquely strong but limited partnership with a key client?

Even my own company, which I sold for $12 million back in the frenzied boom days, provides a lesson worth noting.  Specifically, our revenue stream was based on delivering an incredibly high level of needed service to a single, large government customer.  While we would eventually go on to land other accounts such as the New York City Transit Authority, in truth nothing came close to equaling our success through the original relationship in which our mark was made.

Once again, and in the case of both Elcom and my company, there is/was no question that we have/had the technological chops to leave a bigger footprint on the eProcurement marketplace landscape.  Technology was not the issue.  The real challenge was overcoming market perception based on the long-term tie with a single client, as well as overcoming the comfort factor that inevitably occurs when you become accustomed to a certain revenue stream.

Now some might suggest that the company’s challenges have more to do with scalability than it does with a lack of coverage on the part of industry journalists/analysts.  After all scalability beyond an initial success is a common obstacle to broader adoption.  But here is the thing, prior to today’s post, how many of you had ever heard of Elcom?  And this is my point.

Like MERX, Source One, Emptoris, Zycus, Coupa (about whom I will talk in an upcoming post) before them, Elcom  is a company that has perfected its offering in relative obscurity.  It is only after the aforementioned players – whom it is worth noting received their first significant coverage in this blog – attained a measure of success that made them impossible to ignore, that the old boys club started to acknowledge their existence in any meaningful way.  In fact, companies such as Coupa and Source One were at times subjected to dismissive commentaries by industry bloggers.  How times for these innovative players have changed.

I believe that a blog’s first and foremost responsibility is to become a source of new insights and information so as to better equip the end user market with a much needed and objective understanding of where the industry is heading and why.  This is why I am taking the time to introduce you to Elcom and inviting you to check them out.

Beyond this post, and as it was for the other companies to which I referred, it is up to them to impress you with their solution.  Given a fair chance, I think they should be able to accomplish this initial goal.

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Posted in: Commentary