Medium-sized organisations are often overlooked in the global economy, yet they are the unsung hero of many economies.
In the United Kingdom, for example, medium-sized businesses employed 7.6 million people in 2019 compared to 6.9 million employees working for FTSE 350 firms and 1.6 million in smaller enterprises.
With this number, it is easy to see how medium-sized businesses play a significant role in the economy. But COVID-19 has exacerbated the challenges these organisations face.
The challenges of the medium-sized organisation
Following COVID-19, medium organisations face several problems. Not all will face each of these issues to the same extent, and there will be differences in how they can be addressed.
What are these challenges?
The difficult period following the pandemic has been a watershed moment for digitalisation, as organisations that had previously been hesitant to embrace technology realised the benefits of resilience, flexibility, scalability, and cost.
In reality, many medium-sized businesses lack the expertise to effectively select, implement and use digital technologies. Many medium-sized firms may have a question mark over their prospects because they are still using outdated technology.
The spread of “software as a service” (SaaS) and cloud systems has made things much easier for these organisations, allowing them to better take advantage of scale and digital adaptability as their competition.
There are difficulties for mid-sized businesses in that they require a higher degree of formality than smaller organisations, yet they don’t have the complexity of larger firms, which means that they may frequently be ill-served by current technology solutions.
Many mid-sized businesses utilise multiple technologies as resources don’t always allow for all-in-one software. A fragmented technology stack brings with it its own challenges.
Compliance and reporting challenges
Compliance and regulations are becoming more complex with new ones emerging all the time.
Organisations of all sizes have been struggling to keep up, but the challenge is particularly acute for medium-sized businesses.
COVID-19 has added a new level of complexity to an already difficult situation.
Many regulatory obligations are waived in the case of smaller businesses: as they grow, mid-size firms confront the same regulations as large corporations but without the resources to support dedicated compliance teams or advisory support.
And this is going to rise: for example, in March 2021 the UK’s Department for Business, Energy & Industrial Strategy (BEIS) published its consultation whitepaper Restoring Trust in Audit and Corporate Governance (BEIS 2021), setting out its proposals for a UK version of Sarbanes–Oxley (SOX) legislation.
This will have an impact on internal management in medium-sized businesses and make compliance more expensive.
The challenges of managing people
Many mid-level firms outgrow the small company’s personal management approach, necessitating the adoption of formal HR procedures and the hiring of HR personnel.
The challenge is to provide a solid basis for future development while avoiding bureaucracy’s stifling effect – and to do so with limited resources.
The use of data made available by digitisation is critical for the post-pandemic survival of medium-sized enterprises.
Many medium-sized businesses have grown fragmentally and, as a result, have neglected to link and integrate their disparate systems and governance models, which leads to a crucial weakness in obtaining and using data.
Moving to a data architecture in which data can be aggregated and analysed is necessary, even if organisations continue to utilise a variety of systems.
Having access to data and tools, on the other hand, is not enough. Mid-tier firms may struggle with a lack of data handling expertise and skills. This requires addressing through reskilling programmes and more widespread adoption of a continuous learning environment.
To prevent becoming obsolete, firms must cease fighting with systems that are no longer fit for purpose and transition to systems that enable efficiencies at scale.
What can medium-sized businesses do to overcome these challenges?
Given the current economic and geopolitical environment, you’d be forgiven for forgetting about the fallout of COVID-19.
The good news is that the challenges for medium-sized businesses post COVID-19 are daunting but not insurmountable.
The COVID-19 pandemic has placed unprecedented stress on businesses of all sizes.
Medium-sized businesses must confront regulatory obligations typically faced by larger companies, manage a remote workforce, and find ways to make use of data while navigating a lack of data handling expertise.
Despite these challenges, with the right planning and execution, medium-sized businesses can thrive and build a foundation for sustainable growth.
There are a number of things that medium-sized businesses can do to overcome the challenges:
- Review and update their business continuity plans
- Make sure that their employees are adequately trained on remote working tools and systems
- Ensure that their data is properly managed and secured
- Develop a strategy for managing regulatory compliance
- Provide reskilling programmes for employees to keep up with the latest technologies and trends
- Take advantage of modern financial and business management systems such as NetSuite and SunSystems built to scale with businesses as they grow.
Need help with overcoming these challenges for your medium-sized business post-COVID-19? Get in touch with our team of experts today.