SMEs: The Right and Wrong About a Short List of One

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A few weeks ago, Paul Fremantle of WSO2 told me, in a discussion on SOA and enterprise services buses, that IT changes are leveling the playing field for SMEs and larger companies. I was reminded of Paul's comments when reading Andrew K. Burger's recent interesting two-part series about enterprise software at E-Commerce Times. Burger's point is that SMEs should not leave the

"...the likes of IBM, SAP, and Oracle as well as less well-known providers (but typically thought of as aimed at large enterprises)..." off their short lists.

By the way, larger enterprises are typically an SME's customers and suppliers rather than his or her competitors.


What struck me in reading the Burger article was that most SMEs have a very short list when it comes to enterprise software. It probably has only one vendor on it -- and no, I am not going to say it's Microsoft. I mean "one vendor" generically -- that is, SMEs have one vendor whoever it is (and as often as it is Microsoft, it's also just as often an IBM partner such as Lawson).


SMEs don't go through the short-list process with the procurement rigor of a company that can afford to have its own purchasing and legal organizations. Often this is a restriction of their own IT staffing (or executive time). So they turn to a local consultant/SI who in turn is basically locked in to one enterprise software supplier. If that's the case, follow Burger's advice in terms of questions to ask and the idea of getting a second opinion, and even talking to the big boys.


But just as often, it is an industry issue. A lot of SMEs lock into industry associations to choose their enterprise software and IT because the associations can provide purchasing power and legal protection. As often as not, there is no competitive advantage in your having better or different enterprise software as the insurance agency or widget maker down the street. If that's the case, I suggest you still read Burger's article to understand some of the underlying issues, but don't be worried about a short list of one.


(Note: Franchisees are often in the same positive situation as those SMEs that look for their enterprise software through industry associations but probably have no flexibility of choice under their franchise agreement.)