Mid-market companies are characterized by ambitious growth trajectories and untapped potential. Procurement has a great opportunity to make an outsized impact on growth-oriented organizations of this size.
We recently discussed the potential of mid-market success with Claus Gruenewald, Global Head Partner Business SAP Intelligent Spend Solutions, and Conor Mullaney, Co-Founder and Brand Ambassador at excelerateds2p in a podcast episode “Building Future Profitability with Mid-market Business Ecosystems.”
Here are some key takeaways and actionable strategies inspired by our conversation that procurement teams in mid-market companies can use to have a positive impact on the business and position themselves as a mission-critical partner in growth.
Defining the Mid-Market:
To establish a baseline, mid-market companies typically have annual revenue between $1.3 and 1.5 Billion. However, this figure may vary depending on the country and other factors like market maturity and employment levels.
Mid-market enterprises are also – hopefully – characterized by their rapid growth trajectory. One defining feature that sets mid-market companies apart from their smaller counterparts is the fact that they must face unique challenges inherent in scaling operations. Procurement managers in mid-market companies understand that growth comes with its own set of hurdles. Rather than shying away from them, they should leverage business ecosystems to proactively tackle these obstacles head-on.
Embracing the Power of Business Ecosystems:
Business ecosystems give mid-market companies opportunities to access resources, knowledge, and partnerships that fuel growth. Building strong relationships within these ecosystems empowers procurement to thrive amid fierce competition, even when operating on limited budgets and navigating volatility or risk.
Key Benefits of Business Ecosystems for Mid-Market Companies:
Business ecosystems enable mid-market companies to level the playing field against their larger competitors. By leveraging collaborative partnerships, procurement can access the expertise and capabilities required to drive innovation, improve operational efficiency, and enhance customer and stakeholder experiences.
The support and shared resources offered within business ecosystems provide procurement teams in mid-market companies with a safety net. This mitigates the risks associated with scaling operations and ensures continuity even in turbulent market conditions. Collaborative efforts within the ecosystem can help address challenges, minimize costs, and foster resilience.
Procurement Strategies for Mid-Market Success:
- Cultivate Strategic Partnerships: Identify key players within your provider ecosystem and establish mutually beneficial partnerships. Collaborate with complementary businesses to leverage each other’s strengths and expand your market presence. By fostering strong relationships, procurement can collectively create value for stakeholders and drive growth for the business.
- Embrace Digital Transformation: Leverage technology to streamline procurement operations and enhance efficiency. Invest in scalable solutions that automate processes, optimize supply chain management, and enable data-driven decision-making. Embracing digital transformation enables mid-market procurement teams to compete on a larger scale while maintaining cost-efficiency.
- Focus on Customer Experience: Prioritize customer-centricity and deliver exceptional experiences to all stakeholders. By understanding internal and external stakeholder needs, preferences, and pain points, mid-market procurement teams can differentiate their organizations in the market and build strong supplier relationships that will scale well as the business grows. Procurement should also leverage customer feedback and data analytics to refine their offerings, personalize interactions, and build long-lasting relationships throughout the business ecosystem.
- Foster a Culture of Innovation: Encourage a culture of creativity and innovation within your procurement team. Embrace an entrepreneurial mindset that values experimentation, risk-taking, and continuous improvement. Encourage cross-functional collaboration and focus on positioning procurement as a strategic partner in the business as it scales.
The mid-market’s future is everyone’s future, and everyone wins when they compete effectively with large enterprises. Procurement can play a critical role in that growth journey since every dollar carried to the bottom line becomes an opportunity for reinvestment and growth.