Mid-Market Companies Gaining Ground with Procurement Optimization
June 30, 2014
Over the past two years, we have seen a significant uptick in software implementation engagements at Shelby with mid-market companies across a variety of industries. This growth coincides directly with the growth of our strategic relationship with Coupa, recently given the top score for eProcurement software by Forrester. But something bigger is happening. A larger trend is unfolding as best practices in procurement move down market.
Unlike larger enterprises that have traditionally spent millions customizing on-premise software, our mid-market clients–despite their differences in industry and corporate culture–are focused on procurement fundamentals. They are interested in leveraging the cloud to move quickly from disjointed procurement practices to standardized Procure-to-Pay (P2P) processes in order to simplify operations and improve their bottom lines.
What’s driving the trend?
Gone are the days when only Fortune 1000 companies could afford to implement enterprise-wide standards for procurement optimization.
Best-in-class cloud software solutions like Coupa enable smaller companies to quickly and affordably adopt procurement best practices and configure software to meet their unique business needs.
Cloud software solutions allow the procurement function to play a more influential role when it comes to decision making, implementation timings, and impacts. This is due to the smaller support role IT assumes with the existence of the platform in the cloud rather than behind a company’s firewall.
As a result, software is no longer a driver but a support mechanism to help companies achieve the spend visibility they need to effectively control their finances.
Engines for innovation and economic growth
After spending the past decade working on procurement issues with some of the largest and most respected global brands, it’s been particularly rewarding to work with growing companies that realize procurement can play a vital role in improving profitability and growth. What they may lack in size, access to capital and market awareness, the best mid-market companies make up in agility, passion, and the desire to become market leaders.
Our work with companies in the fields of hospitality, private equity, distribution, retail and manufacturing has given me a new sense of optimism about the long-term outlook for economic recovery. Much of the media attention has been focused on tech start-ups that achieve multi-billion dollar valuations based on their potential to drive the “next big thing.” I have had the opportunity to work with companies in a sector that economists see as a key enabler for economic recovery. Mid-market companies deliver the goods and services, which are the backbone of American enterprise.
The end game
Mid-market companies include firms with 100 to 999 employees or annual revenues above $50M. They account for one-third of employment and one-third GDP in the U.S. These companies can now use cloud-based eProcurement software to more effectively manage sourcing contracts, expenses, vendors, and cash flow. As a result, they are achieving the ability to gain consistencies, efficiencies, and visibility across their enterprise in one location. Benchmarking also empowers mid-market firms to see how they stack up against other companies in driving innovation and change.
A flexible array of modules and deployment options permit companies to customize their adoption of P2P processes. Whether it’s coding spend or unique spend approval workflows, cloud-based solutions offer companies the flexibility to ensure unique business needs don’t have to be sacrificed in the adoption of best practices.
Most importantly, a growing number of smaller companies are seeing the real business results they need to compete with larger players. Processes are more consistent, efficient, and effective. Compliance is greater and companies are recognizing direct savings along with a quick ROI. By any measure, this is good for everyone.
For more information about Procurement Optimization for mid-market companies, contact us at email@example.com.
Manager, Procurement Optimization
The Shelby Group