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18 OPINION Current Debates Dr Kemal Ahson is the Managing Consultant of Lifeworld Ltd. For further information about economic development, supplier diversity and procurement he can be contacted on 020 7937 0919 or kemal@lifeworld.info Then there is the ‘chain of command’ within large organisations; that is, who actually makes the decision to award a contract? Understandably, perhaps, because of audit or cost control requirements, the decision making process for selecting suppliers may be drawn out. But what is never entirely certain is if the person being dealt with is a decision maker and can award a contract. In addition (and perhaps ironically) despite their resources, many large organisations work to short deadlines – an SME or entrepreneur, therefore, may have to work quickly and make sacrifices to meet short–term goals of clients rather than focusing on the medium–term development of their company or business concern. And then there is the issue of profit margins. Recently, a local authority has been cited as an example of ‘best practice’ in SD because of the way it has opened up its supply chains – it has awarded a master–vendor contract to a major supplier and compelled them to sub–contract work to local suppliers. Quite apart from the possibility that some local suppliers may have lost direct contracts with this local authority, what tends to be ignored is the fact that suppliers down the supply chain will invariably receive smaller margins than if they contract directly with the purchasing organisation. Naturally there are many benefits of working with large companies, such as improved cash flow, enhanced credibility with potential clients, and the ability to learn from the ‘best–in–class’. But there are many challenges too. For example, SMEs must avoid a broad brush approach to seeking these opportunities; indeed, there are marked differences between the public and private sectors with the former more able to accommodate wider social, economic and equality goals as part of their core business. The theme of this article may seem out–of–place here. And no doubt this ‘opinion’ can be challenged through case studies and testimonials of how SMEs have benefited from working with large organisations. But there is a simple point being made: SMEs must make a robust assessment of the benefits of working with large purchasing organisations, and recognise that ‘benefiting from SD’ may not necessarily be the most appropriate route to business development and growth. Leaving aside that qualification, then, what should an SME do as part of this robust assessment? Firstly, they must set realistic targets of what they can deliver, to whom, and how. Here an owner–manager or entrepreneur must be selective and manage their resources for pitching for work effectively (which may lead to only working with other SMEs). Second, research the organisations being targeted and identify and be sensitive to the different drivers that influence their procurement processes – from Gershon efficiencies in the public sector to outsourcing in large service sector companies, for instance. Third, SMEs must see beyond the goodwill of large organisations’ commitment to SD and the opening up of supply chains; that is, they must recognise that the awarding of contracts is ultimately a commercial decision and that core service and quality requirements will need to be met. And, finally, they should never give up! engage | uk ISSUE THREE 2007