COVID-19 has hit all sectors of the economy, but there's good reason to think that mid-size enterprises will be the key to recovery. According to the World Trade Organization, small and medium-sized enterprises (SMEs) make up the bulk of the economy, representing over 90% of the business population, 60-70% of employment and 55% of GDP in developed economies.
For a start, there's plenty of help around for mid-size enterprises in the form of government incentives, tax breaks, loans, business advice and coaching schemes. The European Union's SME Strategy, for example, helps medium-sized companies address things like sustainability, digitalization and improved access to finance.
But, as McKinsey has noted, what mid-size enterprises really need to fulfil their growth potential and power our economic recovery is "the ability to access foreign markets, increase operational efficiency and adopt growth-enabling technologies".
So, have our mid-size saviors got access to the growth-enabling technologies they need?
Wrong-size technology is holding them back
In most cases, the answer is unfortunately, no. Many mid-size firms are not using the kind of business technology that would help them grow quickly. They're either making do with basic tools they've outgrown, or they're being persuaded by vendors to use systems designed for much larger enterprises.
Software selection specialist, SelectHub, advises that traditional enterprise software is expensive to buy, slow to install and complex to use:
If you choose to invest in a traditional ERP system you could easily end up spending five figures for a single license. The implementation process can cost nearly four times as much.
These systems are usually installed on premise rather than in the cloud, so they're not easy to access from home and they don't work well on mobile devices. Traditional ERP systems were originally designed for manufacturing industry, so if you happen to be in a service or technology sector, their default design and configuration probably won't suit your operation.
Vendors and systems integrators can customize these systems for you, but this typically takes 18 months and leaves you dependent on their services if you want to change anything in future. Not a recipe for agility and rapid growth.
Right-size technology could make all the difference
Like Goldilocks' taste in porridge, mid-size businesses need solutions that are "just right" for them. Right in terms of size, customization, deployment, features and, critically, time and cost to implement.
Mid-size organizations need systems that are not so big as to be unwieldy, but capable of scaling up as they grow. They should be tailored to the company's particular sector — with pre-configured industry standard modules ready to go out of the box — but easy to customize as well.
Customization shouldn't have to be done by outside consultants writing code - that's too expensive and takes too long. It should be possible for in-house superusers to set up and change the software themselves, working from templates and menus. To be easily accessible to home workers, solutions also need to be cloud based and mobile friendly.
Just because they're middle-sized doesn't mean our heroes of economic recovery should have to manage without the advanced features large enterprises enjoy. Mid-size organizations need software that makes good use of AI to drive automation and natural language digital assistants to help users through their working day.
Perhaps most important of all, the midmarket needs software that's quick and cheap to implement compared to big on-premise ERP systems. The Software-as-a-Service (SaaS) model offers lower upfront costs, variable on-going usage charges directly related to business volumes and implementation timescales of less than 6 months.
Ian Sibbald, Director of Finance at Cranfield University, UK, puts it this way:
We didn't want to use legacy systems like Oracle because of the horrific cost and maintenance issues. The beauty of installing these solutions is that we can use our own internal implementation staff. We don't have to pay for the usual software vendor army of highly priced, external ERP consultants.
The right kind of partner is important too
The supplier should match the buyer in terms of size, industry, pragmatism and culture.
Mid-size companies don't want to be the smallest client of a global giant. Working with a mid-size partner that has experienced growing challenges and opportunities similar to their own is more likely to result in a working relationship of mutual understanding and respect because they understand each other's challenges.
It's essential to work with people who understand your industry. A good partner will have people who've worked in your industry all their careers and will add value when it comes to business process design. They will know, before they walk in, where the real drivers of value lie, what to prioritize and what can wait till later.
There needs to be a good cultural fit as well. Mid-size organizations in service sectors such as consultancy, education and nonprofit should work with partners who are like-minded. They should choose a partner who appreciates that it's the user's experience of the solution that will drive employee engagement and productivity.
With the right software and the right partner — rapid setup, easy to adapt, industry-specific and designed for growth — mid-sized enterprises can equip themselves to drive post-COVID economic recovery for all of us. And that's a good thing at a time when many businesses are wondering what to do next.
Register here for Unit4's upcoming global digital event, Experience4U, on October 14 & 15, to hear from customers and Unit4 executives about how they're redefining ERP for people-led organizations.