Elemica is one of the Philly area's best-kept tech secrets
Tom Paine
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Elemica is one of the Philly area's best-kept tech secrets. From its Wayne headquarters, Elemica manages real-time supply chain and market data for some of the World's leading companies.
Founded in 2000, Elemica refers to itself as "the leading Digital Supply Network for Chemical and other Process Manufacturers." It originally was a consortium, and the partners were owners as well as customers. Original partners included Dow, DuPont, BASF, Shell Chemicals, Bayer, Atofina, BP and Rohm and Haas. The initial funding was $100 million, provided by the consortium members themselves.
Its location near SAP's North American headquarters was likely no coincidence, as most of its members were large SAP ERP customers. Elemica customer applications exchange data at various points with SAP ERP, may be integrated with SAP Ariba, or generate output which can be analyzed more deeply with BI tools on SAP HANA. Elemica does not view SAP Ariba as a competitor, but as a complementary provider.
Elemica's original location was in Center City before moving to Wayne. It has a satellite office in Atlanta where some of its tech leadership is located.
Elemica is what is called a "networked" supply chain system, meaning that each customer is not isolated within the system, but can interact with others on the network to share information and do transactions. This is important because Elemica customers frequently buy from each other at different levels of the supply chain.
The original business model was effective to the point that the format worked, but with limitations. Since the principal customers were also owners, Elemica was managed more like a shared cost center rather than a market-driven business. In addition, Elemica needed new capital to modernize and expand, find new customers and new ways to use the data it its customers generate.
So in 2016, Elemica was sold to the highly respected (by most) enterprise tech oriented PE firm Thoma Bravo . Terms were not disclosed.
“The goal remains to grow Elemica’s business network into a multi-trillion-dollar commerce engine annually,” said John Blyzinskyj, CEO of Elemica, at the time of the Thoma Bravo deal. "This acquisition will accelerate the time to market for solutions that automate and orchestrate mission critical supply chain processes across a global community of buyers, suppliers and logistics providers. Thoma Bravo’s exceptional track record and proven expertise in our industry will enable Elemica to further capitalize on its growth and leadership."
With the original ownership structure removed, Elemica could now concentrate more on broadly on the market it serves and price and allocate resources in a way that better reflected market needs. It also presumably gained the funds needed to become more state-of-the-art technologically.
Under Thoma Bravo ownership, Elemica has worked on improving its external communication, improving the depth of supply chain visibility, and completing an overall digital.transformation, Elemica Director of Product Marketing David Cahn told me in an interview. (Dave, a Villanova grad, has been in every corner of the enterprise software world.) Another use case for Elemica to explore is the value of its customers aggregate data. For example, since it has such a strong position in the chemical industry, the aggregate of its customers' supply chain data might paint a more complete picture of what's happening in that market.
Also, Elemica is conducting a blockchain pilot with a major customer and a third-party software firm.
Elemica hosts its cloud on Amazon Web Services, with in-memory capabilities.
A recent challenge has been adjusting to changes resulting from the Dow / DuPont merger.
Supply Chain networks have changed with new technology. Supply chain planning in the past was typically based on semi-static or out of date information, and scenario testing took up considerable compute time and thus was difficult to modify. Now, with in-memory processing and other technological advances, supply chain planning is a nearly real time exercise and the market for supply chain software has been reinvigorated.
Dave discussed the difficulties of moving a business from a service bureau mentality to a digital mode.
Elemica now has revenue in the $50 million range (though I don't know what it sees as its addressable market) and is growing at 10% annually. It has around 200 employees.
