Small and Medium-Sized Enterprises (SMEs) are unique contributors in business and add significant value. But for large organisations, it is often hard to know how to get the best out of their relationships with SMEs.
Here at QinetiQ, we are proud of our engagement and collaborations with a variety of SMEs. As part of our SME series, they share their thoughts on what makes SMEs so distinctive, from their point of view and best practice when working together.
Our six participating SME representatives can be found below:
Q1: What makes SMEs unique to do business with? What are the advantages to being an SME over a larger company?
Maggie Scott, Principle One: For us, what has been unique is being able to build a distinct and supportive culture that we all want to be part of, where everyone knows they can get their voice heard. Like many other SMEs, there is a real passion that underpins everything that we do. SMEs can be flexible and responsive to new opportunities and challenges and this has been invaluable as we have moved to new ways of working over the last three months, such as remote working.
Matt Laverton, AACE: We are more adaptable to change, able to flex against ever changing requirements without a great impact to the business and are able to respond rapidly to many requirements due to less people in the approvals chain. The other real advantage of being an SME is the ‘family’ feel to the business. Fewer employees’ means each of which is able to make a large impact and to influence the business.
Scott Meller, Isotropic Systems: SMEs have few barriers to moving fast, and also have a crystal clear strategic focus. This makes connection between the work and the product more direct and engaging to collaboration partners as team member’s work is easily directly related to the end product and benefit to the market. SMEs are typically more open to sharing strategic business plans with collaborators to promote full engagement as part of the team.
Steve Borwell-Fox, Borwell: SMEs are unique as they are niche, focussed and passionate. The advantage of an SME is that the more you focus on one capability, the more specialist you become, and the more your reputation improves. Larger companies tend to have wider capabilities, but not in the depth of an SME. SMEs are typically leaner, more agile, and can adapt quickly to new challenges, new opportunities, new best practices, and adopt new technologies quickly.
Q2: In the global defence and security market, what role can SMEs play?
Tony Reeves, Level 7 Expertise: SMEs can play an enormous role in the global defence and security market; our adaptability and agility, combined with insight and incredible levels of expertise can make a difference far in excess of that you might expect from a small company. Going after the global market is beyond the budgets available for SMEs by themselves, and this is where the development of strong partnerships comes in. We also find that as an SME, prospective clients speak to you very differently than they might if you are a large, international defence and security prime contractor. Often, they will be far less guarded, and happy to talk through their challenges, aspirations, and future capability intentions.
Steve Borwell-Fox, Borwell: SMEs contain niche capabilities, skills and Intellectual Property mainly by way of Intellectual Expertise. Globally, UK SMEs already export security services and products globally. Language and geography are low barriers so SMEs can penetrate new markets quickly. UK SMEs are fortunate in that UK Security Products & Services are seen as world class, especially if you have an HMG Customer reference that you can use.
Maggie Scott, Principle One: As an SME, a key factor in our success has been a focused approach to what we do, and for us that has meant working with UK Law Enforcement. This local focus means we can offer deep domain understanding that our customers and larger partners, such as QinetiQ, can call on. SMEs are also well placed to bring innovation – whether it’s a fresh technology solution to an established problem or a unique approach to dealing with engineering complexity. This allows SMEs to have a far bigger impact that their size and scale of operations would often suggest.
Q3: How can working with large organisations, like QinetiQ, benefit SMEs?
Marc Brûlé-Walker, RED Scientific: Working with a Prime partner such as QinetiQ gives us access to new markets and important early sight of customer pipelines. It also presents opportunities for innovation and collaboration. We have found QinetiQ to be supportive and responsive and we are made to feel valued as a partner, being generous with their time and knowledge. A good partnership with a larger organisation provides SMEs with opportunities to deliver innovation and value for money on larger projects, programmes and organisational transformation, alongside the all-important knowledge sharing.
Matt Laverton, AACE: It can only benefit SMEs if the communication lines remain open. If there is a real drive by both large companies and SME to jointly meet the end customer requirements then the benefits are enormous and both type of companies can reap the rewards available. If there is a willingness to ‘share’ the work available and agree on open competition for the SME to provide their services, then by inviting SMEs ‘to the table’ the end customer will be the real winner in terms of value for money and achieving exactly what they asked for ‘on the tin’.
Tony Reeves, Level 7 Expertise: Working with large organisations brings significant benefits to SMEs. We manage our relationships, opportunities, and contracts on a “close partnership” basis, which has over the life of the business has proved very positive for our clients and for our business. As is always the case with opportunities, timing is key, and getting this right can lead to the rapid introduction of senior individuals and requests to support bids, extremely important to an SME company.
Scott Meller, Isotropic Systems: Larger organisations like QinetiQ has more depth in fields outside the core focus of an SME, but the SME needs that expertise in order to execute in the best way. A larger organisation also typically has more specialty equipment available for unique developments that an SME would otherwise not have access to. QinetiQ has significant materials expertise that contributes to Isotropic’s success in “transformational optics” beamforming lens technology.
Q4: What are the advantages of collaborative working?
Maggie Scott, Principle One: Collaborative working is essential to an SME’s success. Without being able to work effectively with large and small organisations, an SME will be hugely limited in their ability to tackle the complex customer problems that we are faced with in the National Security sector and the individual impact you can make will be far smaller. Multi supplier teams can lose direction, however, without strong collaboration tools as a basic hygiene factor and a clear consensus on ways of working and this is something we always seek to address when we mobilise new teams.
Tony Reeves, Level 7 Expertise: Collaborative working is an excellent principle but does require changes in behaviour and thinking by all concerned. Critical to success is the ability to put aside judgements and unconscious prejudices based on the relative or comparative sizes of the organisations involved; insights and critical thinking abilities are not based on scale but firmly on intellect and understanding. Of course, truly collaborative working requires the right tools, and the Covid-19 crisis has forced a number of new ways of working: increased reliance on remote working; screen sharing; collaborative video calls; and many other less obvious changes. Collaborative working is really down to how much value you can offer, despite size of company involved in the relationship.
Steve Borwell-Fox, Borwell: The advantages of collaborative working include pooling resources and expertise, avoiding duplication, and being able to win larger contracts. The prime contractor gains a key enabler, the SME may win a small work share, but for the SME this could be a considerable win economically, sustainably and allow them to recruit and scale their team with confidence.
Q5: What does the future look like for SME working?
Marc Brûlé-Walker, RED Scientific: The current UK Government target of 33% SME spend will certainly be increased. As contract size and value also increase, it will be essential for more large Prime organisations to treat SMEs as important partners, rather than a cheap mechanism for them to achieve government targets. There will likely be a requirement to deliver more for less; key SMEs will be required to help deliver this difficult but necessary change across a wide range of areas including the engineering function. This may be achieved through innovation; incorporating good practice and driving continual reduction of frictional cost.
Maggie Scott, Principle One: Covid-19 and the disruption it has caused across UK businesses has been magnified in the SME sector. Short-term disruption in cash flow and delays in projects have forced many SMEs into difficult decisions in furloughing staff – and it will be hard to pick up again. However, for those businesses that have been able to adapt to remote working and maintain momentum, the new normal does present new opportunities. Finding new customers without the ability to meet face to face is going to be tough but as we have found over the last few months, our existing relationships have helped us win new work and maintain growth.
Tony Reeves, Level 7 Expertise: There will be many opportunities for SMEs in the years ahead. The agility and speed of response you get from an SME are excellent attributes, often paired with swift and effective decision-making. I believe the general themes in the coming years will be more and improved collaborative working; increased capabilities to work remotely using technology tools to deliver; measured growth through key placements of staff and associates (rather than explosive growth); increasing visibility of SME track record and performance evidence in helping large defence system integrators.
Q6: Do you have any tips or advice for other SMEs or for organisations working with SMEs?
Matt Laverton, AACE: The biggest tip I can give is to maintain communication at all times and ‘share’ potential joint ventures or new skillsets acquired by the SME with the larger organisation, such as QinetiQ. For example, where the SME was a previous incumbent in a task then communication between the larger organisation (now looking to take on that task) may reap reward with a potential ‘seat at the table’ in that task.
Steve Borwell-Fox, Borwell: Large organisations should set the commercial requirements to SMEs fairly, e.g. ISO 9001, CES, proven experience. Be prepared to offer supplier development and involve the SME in the PQQ/ITT stage so they feel like they have skin in the game. As for SMEs, rather than diversifying into new areas, SMEs should stay focussed, be confident to stay in their niche, and scale their existing teams based on new business.
Marc Brûlé-Walker, RED Scientific: To get the best out of relationship with SME ‘Partners’ ensure early sight of customer requirement market intelligence and Pipeline to allow Innovation to shine. Embrace relationships with Niche suppliers and also with Academia. Recognise that for any relationship to thrive it needs to be nurtured and fed. Every large organisation should have a senior post of SME Champion to act at Board level to ensure that the organisation has the right culture and foresight to embrace collaboration.
Scott Meller, Isotropic Systems: For SMEs, know your market and how your product differentiates, and maintain laser focus on that. For organizations working with SMEs, engage at level in which you understand the key accelerators you can provide the SME, and what your long term role can be in participating in the success of the SME.
QinetiQ's Tom O'Byrne, Head of Supply Chain Development, concludes:
It is apparent that through collaboration, SMEs and large organisations can develop symbiotic relationships but it is the understanding of each other’s differences that together this relationship is strengthened, as we recognise each other’s offerings and how these may be best configured for the end customer.
Thank you to each of the companies who contributed to this article with some emerging themes and notable takeaways for both large organisations and SMEs to consider, take on board or adopt.
A short background of each of participating SME companies:
Aerospace & Airworthiness Consultancy Enterprises Ltd
AACE is a family run business with SME status, providing technical support to the MOD (predominantly) through frameworks such as EDP and to Industry partners in the Air, Land and Sea Domains. We specialise in Airworthiness, Safety and Certification, Through Life Technical Support, Quality Assurance, Airworthiness Training Delivery and Supply Chain Management.
Level 7 Expertise Ltd
Level 7 Expertise is a micro-SME based in East Northamptonshire, incorporated in 2016. We have a small employee footprint and a number of highly trusted associates. We primarily work in two areas: UK MoD Defence Intelligence Systems (Computing and Information Systems) forms the large majority of our work, and additionally we have an interest in providing training and workshops focussed on drones and countering drones. All of our delivery staff have high level security clearances and a unique set of skills. We are known for transitioning complex systems into service, and have a mix of engineering and project/programme management experience.
Principle One Ltd
Principle One works with the UK Law Enforcement and National Security community to address the challenges of technology and legislative change within communications intelligence and wider digital policing. We help our clients to keep pace with an increasingly complex core mission, enabling them to experiment, innovate, fail fast and continually improve their capabilities. We offer services including Enterprise Architecture and Systems Engineering, Business Consulting and Analysis, Prototype Development and Agile Delivery, Experimentation and Technical De-risk and Delivery Management.
Isotropic Systems Ltd
Isotropic Systems is a leading developer of transformational broadband terminal technologies that serve the GEO, LEO, and MEO satellite communications networks. Isotropic Systems’ revolutionary terminals, featuring patented beamforming lens technologies, provide the high throughput ground infrastructure required to unleash the full potential and capacity from multi-orbit constellations to meet the burgeoning and evolving demand for high-powered connectivity in government, defence, aerospace, maritime and telecoms markets.
Borwell helps systemise Customer’s operations. What this means is removing paper, spreadsheets and manual processes, and becoming more efficient, digital and scalable. The Borwell team is 30 strong and mainly consists of Software Engineers and Cyber Security/Network Engineers. Working in teams, they support Customers worldwide in a wide range of sectors.
RED Scientific Ltd
RED Scientific Limited is a long established, privately owned, independent UK consultancy. We provide technical, managerial and scientific support to a wide range of customers that include defence, industry and central government and its agencies. Some of RED’s current capabilities include Supportability Consulting & Integration Support, Safety and Environmental Management, Operational Analysis & Modelling, Systems Engineering & Software, Research Services including Autonomous Systems and Digital Services including Information Assurance. RED is currently delivering safety and environmental management support to three UK MoD DE&S delivery teams as part of the Engineering Delivery Programme (EDP) Partnership Network (PN).