Smaller organizations also typically are more constrained than large enterprises in the size of their information technology (IT) staff and the amount of capital that they can devote to IT projects, notes Paul Gilmartin, vice president of marketing with Aras Corp., a product lifecycle management (PLM) solution provider specializing in the mid-supply chain market. For that reason, a mid-tier company is more likely to favor low-risk technology projects that don't require lengthy implementations driven by extensive customization and complex integration, or a high level of maintenance after the deployment is complete. "They don't necessarily have the high overhead for supporting IT implementations," Gilmartin says, "They say, 'I just can't afford to have a busload of programmers come through my front door and take six months to look at my business process and write code to do what I need to do.'"

James R. Osman, vice president of marketing for Demand Management, the St. Louis-based developers of Demand Solutions forecasting and demand planning software, says that mid-market companies today often face a challenge in just finding the time to move beyond the daily blocking and tackling necessary for survival to think about how they can be more strategic in their application of technology. "In a price-conscious economy, mid-market companies feel the squeeze," Osman says. "The order of the day is putting out fires as they try to synchronize demand with offshore production sources or materials suppliers using manual, time-intensive processes."

Osman goes on to note that executives at mid-market companies often aren't even aware that solutions exist to address the supply and demand chain issues confronting their organizations. "The perception of the leadership of these companies is that capable supply chain management systems are out of their reach, costing more than $1 million and requiring 18 months of implementation and training." In reality, Osman asserts, the technology market today does include solutions providers that can provide flexible systems to these mid-market operations for a fraction of that cost and with implementation times of just a few months. Osman notes that while one quarter of Demand Management's customers are Fortune 500 companies, 64 percent of its customers have annual sales in the range of $70 million to $500 million.

In addition, Katherine Jones, managing director within the enterprise business applications practice at technology consultancy Aberdeen Group, points out in her 2003 report "The Small and Middle Market Enterprise: Addressing Today's Business Issues Through Technology" that mid-market companies are not particularly focused on technology itself but rather are more interested in how technology can address particular business pains. "[Mid-market enterprises (MMEs)] look at a business problem, not the technology behind it," Jones writes, "and certainly not technology in isolation. These are, in the main, not technology 'toy' or gadget people ... For the most part, an MME is more interested in flexibility than glitz."

Smaller, But More Agile

Michael Topolovac, CEO and co-founder of Arena Solutions, a PLM company formerly known as bom.com, agrees that mid-tier companies are very sensitive to the value proposition of any technology project they are considering. "They are all very focused on making sure that they're going to get value from whatever they're buying, both in terms of the return on investment and how quickly they get value from it." On the other hand, Topolovac says that mid-market companies often are able to act much more quickly than larger enterprises to deploy new technologies. "The advantage of the mid-tier guys is that they make their decisions a lot more quickly, a lot more efficiently than the large companies do," he says, adding that Arena's sales cycle with mid-market companies frequently wraps up in a couple months, as opposed to six months-plus for large-scale enterprises.

That ability to make decisions quickly may be a saving grace for mid-market companies, according to Navi Radjou, a vice president with technology advisory firm Forrester Research. Radjou believes that the No. 1 issue confronting mid-tier U.S. manufacturers today is the threat of losing business to lower-cost suppliers overseas. With that risk of being "offshored" hanging like a Sword of Damocles over their heads, mid-market companies may be tempted to try to compete primarily on cost, which, ultimately, is a losing proposition to Radjou's mind. "You have to get out of this cost-oriented obsession," the analyst says, "since most companies have already cut to the bone."