Small and Middle Market Spend Management Challenges

While it's really not fair to generalize the challenges that small and middle market companies face from a Spend Management perspective -- they typically vary tremendously by industry and by ownership structure and an owner's motivations and willingness to shake things up -- David Bush did a good job summarizing some of the SMB Spend Management challenges that Aberdeen recently reported on in a benchmark study. According to David's synopsis, Aberdeen found that "on average, half of all companies of this size have no eSourcing applications and 40% have no sourcing process compared to about 15% within large enterprises. Aberdeen's number one recommendation is to implement a standardized sourcing process."

But standardized sourcing processes will do nothing if small and middle market organizations don't have the talent to identify savings and make programs stick. I recently had the opportunity to interact with one executive from a middle market manufacturer on my trip to China. He was sharp as a knife and would have been at home running global sourcing and supply chain for any large organization (in fact, he came from Emerson). But talent like this is few and far between in too many middle-market where owners and executives still often treat procurement as a transactional function. If you're in this boat, don't just run out and buy a sourcing application or hire a consultant to come in and create a process for you -- think first about upgrading your team. It will make all the difference.

Jason Busch

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