Based on my conversation earlier this morning with Elcom’s Executive VP Finance David Elliot, I could not help but wonder if we should seriously consider broadening the definition of a start-up business.
I have of course written about Elcom in the past, including my reference to the company in my September 23rd, 2013 post “Welcome to the new era of configurable private label eProcurement solutions (Part 1 of 2)“. Specifically, I used them as an example of a company that has to a certain extent become a victim of its overwhelming success with a single first client – the Scottish Government.
As the industry has seen companies such as Coupa, Nipendo and Emptoris successfully carve out their indelible place in the emerging cloud-based market, Elcom has yet to experience similar results. In fact, by Elliot’s own admission, Elcom is stuck in a kind of limbo between what I call unlimited possibility and unrealized potential.
The issue isn’t with their technology, because there is no question that their solution has over the years delivered tremendous value to the Scottish Government. It is more a question of positioning or branding.
As the window of opportunity to become part of the new wave of influential vendors offering cloud-based solutions closes, there is a chance that Elcom might find itself on the outside looking in. A boutique company whose fortunes will be forever tied to a single client.
The question is simply this . . . what can the company do to avoid what is at least at this point, an inevitable future?
One strategy that Elliot shared with me is their focus on expanding the Elcom service offering to include supplier finance. As I had indicated in my October 2013 post regarding Tradeshift’s decision to incorporate a factoring element into its platform, this is both a smart and necessary strategy. However, whether or not it helps to create scalable traction remains to be seen.
So where does this leave Elcom – a company with a sound technological platform that has of today remains hidden from mainstream industry consciousness?
Once again, and rather than focusing on an internal change to their offering, they need to focus on redefining themselves as “the oldest new company on the block.” Or to put it another way, and similar to what MERX has had to go through after losing their biggest client in the Government of Canada, they have to redefine the meaning of the word start-up. This means that in pursuing new business, they have to forget about their past success and focus on building a new model as if they had never heard of the Scottish Government.
In short, they have to ask themselves the following question; if I were introducing the Elcom solution to the market for the first time today, how would I have to position it to demonstrate its value?
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Procurement Insights 
piblogger
April 1, 2014
Reblogged this on Procurement Insights EU Edition and commented:
Editor’s Note: Even though UK-based Elcom’s technology is solid, why is the company still struggling to gain scalable traction within the general market?
David Elliott
April 8, 2014
Jon, what vendor is truly satisfied with their market penetration? Despite having a strong and growing client list (both in the US and Europe) our point is that we do not want to be viewed as a one trick company as there is so much more we have to offer.
piblogger
April 8, 2014
Thank you for your thoughtful and succinct response David. I am inclined to agree with you in terms of the fact that Elcom does indeed have more to offer. That is perhaps the great disconnect. The question is how do you bridge that gap between actual platform capability and market awareness and acceptance? How do you gain the scalability that is so important to moving beyond the gilded cage of initial and significant success with a single client?
So here is the question – and given that your platform is solid as demonstrated by the successful implementations to which you refer – how many innovative companies such as Elcom are not where they could be or should be relative to market share? Is the issue tied to the fact that the company came into existence at a time when ERPs were central to an organization’s operations and as such did not receive the necessary coverage from what was once a closed club of industry journalists and analysts?
Alternatively, is the lack of warranted traction the result of what Rob Spiegel, the author of Net Strategy (Dearborn) and The Shoestring Entrepreneur’s Guide to Internet Start-ups (St. Martin’s Press), believed regarding companies that never realized their full potential. Specifically that “Many of the technology ideas were brilliant,” but that it means very little at the end of the day “unless you can demonstrate a need that is getting met by these products, technology and ideas.”
Perhaps it is a combination of both?
That said it is my hope in raising these questions that perhaps the market will take a second look at vendors such as Elcom, but this time through the present day lens that is no longer clouded by the belt with suspenders “no one ever got fired for buying IBM” mindset that led to organizations going with a familiar brand as opposed to the best possible solution.