SMEs and big companies – friends or foes?

There is little doubt that SMEs are one of the key drivers of the UK economy. HP believes we must recognise that the best outcomes arise from creating an ecosystem of small and large players working in collaboration.

99.9% of companies in the UK are SMEs, and their number has increased by 1.4 million since 2000. They employ over 14.4 million people and have a combined turnover of £1,600 billion1. Little surprise then that the government wants to better support their growth by enabling smaller providers to bid more effectively for public sector contracts.

Big businesses benefit from working with small businesses

Many larger businesses understand the benefits of having SMEs as their suppliers. Within the IT and technology sector, SMEs often provide niche solutions which help in the design of complex infrastructure and application solutions. SMEs also often bring expertise and experience in new methods and solutions and can provide a local solution which complements a global provider.

And small businesses benefit from working with big business

SMEs can also benefit from working with bigger companies. Being involved in bigger contracts which they may not be able to bid for in their own right is an obvious and immediate benefit. But larger companies also bring a greater depth of resources and experience. But we believe that larger companies need to be more structured in their interactions with SME partners rather than just managing each as a single transaction.

But it doesn’t just happen by chance!

This is why HP established a Small Business Office (SBO) to build SME relationships, simplify terms and conditions, and provide more information to SMEs with a view to, ultimately, driving up the amount of work and innovation from our SME suppliers.

HP has a number of complementary programs which make it easier to do business with HP and reward partners for growing with HP, and a programme to support the startup entrepreneurial community.

For example, see the HP Learning Initiative for Entrepreneurs (HP LIFE): http://www.life-global.org/en or HP PartnerONE programme: http://www8.hp.com/uk/en/hp-information/partnerone-program/overview.html

HP partnership with IASME (Information Assurance for SMEs)

A great example of creating mutual benefit for all parties is HP’s partnership with IASME (Information Assurance for SMEs). The IASME security standard provides companies, like HP, with the assurance that an SME can protect their IT systems from cyber threats. This IASME security standard provides automatic cyber liability insurance for UK companies with less than £20m turnover. Our support for this initiative opened up a market valued at up to £250,000 to IASME.

The margin on margin question

One of the usual objections by any size company to engaging third parties in your supply chain is the issue of margin – which is diluted if a prime contractor works with third parties. This is particularly relevant in large corporations but not the case when working with SMEs because the contractual risk and other liability issues are taken by the prime contractor. So the margin issue is something that needs to be considered and balanced against the innovation agenda so that the solution and risk are well balanced.

Creating an eco-system of small and large players

Says Dr Emma Philpott, CEO, IASME Consortium Ltd:

Small and large companies have very different ways of working and so can sometimes misunderstand each other. We have found that, if both sides engage with an open mind, it is often possible to find a working arrangement which can draw on the strengths of both large and small organisations”

The combination of large corporates and SMEs will not only unlock the potential of technology for our businesses and public services across the UK – it also supports the growth, talent and innovation needed to keep Britain’s economy strong.

 

1 Source of figures: Department for Business, Innovation & Skills; published 26 Nov 2014 https://www.gov.uk/government/statistics/business-population-estimates-2014

Susan Bowen is Chief of Staff for HP’s business in the UK & Ireland and has been with HP since 1999. In this role, Susan leads HP’s cross company strategy on behalf of the UK and Ireland Managing Director. She also leads HP’s programme to transform its relationship with SMEs in the UK, which includes bringing their skills, innovation and entrepreneurial spirit to benefit HP’s public and private sector customers.

 


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