The Power is in the hands of the SMEs

There has been a seismic shift from large corporates having the upper hand in their relationship with small and medium enterprises (SMEs) over the last 36 months.  I would now suggest the power is significantly in the hands of the SMEs.

If we look back only 3 years ago, we saw large corporates winning government contracts only on the proviso that 10% of the delivery is by supply chain SMEs.  In the tech space this meant the corporate would win the work with some suitable rhetoric and then use a few ‘bodyshopping’ SMEs to deliver code.  Payment terms would be whenever the corporate fancied and SME innovation was non-existent.

However, now the situation looks entirely different.  Corporates are now vying for smaller, disaggregated contracts with the SMEs they once sub-contracted.  In doing so they need to be agile, innovative and competitively priced.  In this situation corporates now have to rely on SME ‘partners’ rather than SME subcontractors to win business in a competitive market place.

Yes, there are still some big government contracts out there but even these have break-points and require agility to pivot.  In such cases the big corporates are bringing in the SME – on their terms – to support contract delivery and project decision making.

But what about the corporates that don’t deliver government tech contracts?  Such companies are engaging tech SMEs to drive their corporate innovation.  Why? because these SMEs are by definition innovative, agile and on the bleeding-edge of tech. Working with as many of the pioneering tech SMEs as possible is inevitably a good way to support internal corporate progression.