The success of SMEs in winning Government and private sector contracts hinges on collaboration with larger firms a new report reveals today, with just six percent of SME owners believing it has become easier to win these contracts independently in the last two years.
The Collaboration Nation report, commissioned by Fujitsu and drawing on the views of around 500 UK SMEs, reveals that smaller businesses are still struggling to secure direct business from government, and many want to collaborate with larger suppliers and see doing so as the most viable route to winning large contracts.
Last month the Office of Fair Trading (OFT) called for an investigation into the supply of ICT goods and services into the public sector amid concerns that smaller suppliers weren’t getting their fair share of opportunities in the sector.
The Fujitsu study shows that just six percent of SMEs have found it easier to win government business direct in the past two years and 50 percent noted that there had been “no change” in their ability to win government work.
“SMEs have much to offer customers both in large enterprise and within government – they provide the kind of agility, innovation and flexibility that can deliver great results for their customers,” says Duncan Tait, CEO of Fujitsu UK & Ireland.
“What we hear from SMEs though is that there are three main barriers to winning contracts directly from Government and large enterprises – the complex bidding processes; the cost of bidding and the risks involved.
“The steps the Government has recently announced to ease the bidding process for smaller suppliers are incredibly positive; but Fujitsu believes that the other two barriers – the costs in bidding and the risk issue – can only be mitigated by working in collaboration with a larger partner who is better equipped to absorb them. Together, government, large enterprise and SMEs need to come together to make that relationship work for the long-term benefit of the UK.”
58 percent of SMEs believe that smaller and larger suppliers should collaborate to win large contracts – but 43 percent warn that in their experience it rarely happens. When collaboration does occur, SMEs reveal that it helps them reap significant rewards. 70 percent who have won business this way believe that they couldn’t have done so without the support of a larger partner; 62 percent say that they believe this kind of partnership is a good idea and 80 percent of those who have worked with big companies to win business keen to do so again.
“There can be little doubt that collaboration between large and small business has profound implications for growth in the UK,” comments John Cridland, director-general of the CBI. “We are blessed with a buoyant and energetic SME sector, and one which clearly understands the benefits that can be achieved by working collaboratively with larger counterparts. The clear imperative from this report is to tackle, in any way possible, the barriers that stand in the way of those partnerships.”
“What is clear here is that this is not about trying to make it easier or more appealing for SMEs to tender directly for commercial or governmental work,” adds Tait. “The big wins for the UK economy are in enabling and incentivising SME and large partners to work together for the benefit of all.”
