Elcom & Scotland – the lowest profile e-Procurement exemplar in the world?

This week we're going to be featuring a number of solution providers that we haven't covered before - part of our New Year's resolutions for Spend Matters to get out and about a bit more! We'll start with a mystery firm...

 

Let’s imagine you’re a investment banker, or private equity firm, advising or considering acquisition of a software firm.

  • They’ve got a supplier network with many thousands of participants, offering marketplaces and catalogues to enable buyer / seller interaction.
  • Their offering is SaaS “software as a service”, a 100% “cloud” based platform – and has been for some years, so it has proven robustness and integrity.
  • There are billions of dollars / pounds / Euros going through their buyer / seller network every year.
  • There’s a core customer who is using the software in a manner that is globally leading-edge.

This all sounds brilliant! Absolutely 2012 – very cool and sexy from an investor or venture capital standpoint.

“Hey guys,” you say, addressing the Board of this firm. (That’s how we private equity people talk, you know).

“ Let me just give IBM, SAP and Oracle a call, drop an email to a few people I know... This time next year you’ll all be millionaires!”

So let’s get more specific. Here is a buyer / supplier network that on some measures is one of the largest and most active in the world. Over £5B ($8B) was transacted through it last year. It has over 100,000 active suppliers within the network. There are over 145,000 live “catalogues” and 1500 cXML punch-out connections in place. It is totally cloud based and has been so for 10 years, and there are over 100,000 regular users.

And their largest customer provides possibly the best example in the world today of a particular strategic approach to procurement - one that is relevant to pretty much every country in the world..

Well, the mystery firm is Elcom.

And unless you’re in the Scottish public sector, or various schools districts in the USA, you may well not know the name. But their main claim to fame is that they power the Scottish Government e-Procurement platform, which is one of the few truly national, collaborative and successful public sector procurement platforms I’m aware of anywhere.

Back to Scotland - if we look 10 years ago, “you would find that councils for instance – even somewhere like the Orkney Isles which is obviously very self contained - didn’t talk to the local health people, or the police, about procurement matters”.

That’s Ian Burdon speaking, now Elcom’s Director of Business Development – but until last year, one of the key people developing and leading the initiative within the Scottish Government.

Now there is a structured approach to collaborative procurement, with very strong buy-in from all sorts of public bodies around Scotland. There are around a dozen spend categories purchased at national level, a further range managed regionally, then more locally. The e-Procurement platform supports the buying process at any of these levels, highlighting national contracts for instance where they exist. This is arguably “the world’s most successful public-sector e-Procurement programme”.

Why is Elcom so low-key then, given what appears to be a great success story? It may have something to do with some corporate and ownership changes over the years – it has been quoted on the US markets despite its mainly European client base, with an HQ and data centre in Boston. But with a new sales head, David Morton, on board, as well as Burdon, there is clearly a desire now to expand their horizons.

In part 2 of this series we’ll look in more detail at the Scottish programme, and see if there are lessons that can be drawn, particularly around encouraging collaboration – something that is relevant in the public sector and even for large and complex private sector firms.

Voices (6)

  1. D J Scott:

    Am looking forward to part 2. I also reiterate Mr. Riamondi’s “when is Elcom going to start reporting?” inquiry.

  2. Gregg Raimondi:

    Is Elcom still involved with visa international?what other governments are we involved with?when is Elcom going to start reporting ?

  3. Ian Burdon:

    Hi Joe – drop me a line at ian.burdon@elcom.com and I’ll be happy to chat.

  4. joe winkler:

    what are the backgrounds on david morton and ian burton ?

    why is elcom’s buisness model so successful?

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