In the U.S. midmarket companies constitute a unique and highly fruitful business realm. Many midsized firms are purposefully not on a trajectory to become large enterprises. These firms are finding continuous success because they know how to operate well as midsized companies, and have advantages not available to much larger organizations. Lighter on their feet than larger enterprises, midsized companies can more quickly adapt to change and opportunities. And unlike small companies, the midmarket has stronger finances to fund growth and weather down times. Growth for the midmarket often comes from organic expansion – and understanding what it takes to engender it, including business model innovation and re-invention.
Midsized companies are much more in touch with customers and their own employees. They are truly interested in nurturing both of these relationships because they know that the right employees foster distinctive and positive interactions with customers. Midsized companies offer talented employees a better chance to stand out and drive innovative efforts, both for offerings and for how the business is run.
The most recent performance data from the National Center for the Middle Market provides more insight into the success of midmarket companies over time:
Consistent with the past 12 months, a solid majority (63%) of middle market leaders continue to report improved overall company performance versus one year ago.
- Companies have sustained the rate of increase in year-over-year revenue growth as reported in the last quarter, with a mean total revenue growth of 6.6% for Q2 2014.
- While the proportion of middle market firms experiencing revenue growth consistently outpaces the proportion that added workers in the past year, middle market firms have maintained the significant increase in hiring reported in the first quarter of 2014. For Q2 2014, more than 40% of firms report increased employment compared to one year ago.
- Middle market leaders from all revenue segments continue to express higher levels of confidence in the global, U.S., and local economies. The percentage of respondents expressing some level of confidence in the local and regional economy is an impressive 77%.
A final statistic: 63% of midmarket companies plan to continue to invest in the growth of their companies. This last statistic is interesting since part of that investment continues to flow into the implementation of cutting edge technologies such as advanced analytics (including big data analytics) to help fuel growth, innovation and competitive advantage. There has been a steady increase in analytics solutions that are a good fit for the midmarket, as well as providing better access for less technical business users.
Analytics are not limited to the functions of operational performance, financial and risk management, and supply chain optimization. Midsized companies are especially interested in analytics in support of improved marketing and sales, with customer insight as a top priority. Midsized companies have competitive advantage over larger organizations when it comes to more quickly implementing the results of analytics processes, through decision-making processes and actions.
Analytics options that currently appeal to midsized organizations include reports and data visualizations that help all levels in the business make good use of data to recognize patterns of change, as well as new trends that impact target customers and markets, products and services, and revenue. Predictive analytics help midsized companies pull in new kinds of data to go beyond traditional BI to anticipate future and unexpected trends and changes. Big data analytics provide the means to use large datasets and non-relational data sources to improve and expand intelligence initiatives.
Midmarket companies seek many of the same outcomes that larger organizations want:
Faster, more informed analysis for making better decisions, identifying compelling opportunities, and spotting market changes (good or bad)
Continuous customer intelligence to improve customer experiences and relationships
Timely insight for the development of products and services
Business model innovation
- Operational improvement and reduction of risk
Image source: National Center for the Middle Market
(a collaboration between The Ohio State University Fisher College of Business and GE Capital)
This post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM's Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.
About the author: Julie Hunt understands the overlap and convergence of many business processes and software solutions that once were thought of as "separate" – and how this impacts software Vendors and Buyers, as well as the strategies that enterprises implement for how technology supports the business and its customers. Julie shares her takes on the software industry via her blog Highly Competitiveand on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective