Qualitative deep dive seeking insights faced by Small and Medium Businesses (SMBs)

Research Objectives

The primary objectives of this research were to:

Target Audience

The target respondents for this buyer interview guide were small and medium business leaders who are responsible for supplier management decisions. These included decision-makers from various sectors engaged in procurement and accounts payable activities. Respondents were selected to represent a cross-section of businesses with varying levels of engagement with suppliers and supplier technologies.

Research Methodology

A qualitative interview approach was used, with structured questions grouped into specific sections to capture comprehensive views of the participants:

1. Introduction and Role Definition 
   • Background Questions: Participants were asked to provide information about their roles, supplier engagement frequency, and the types of suppliers they work with.
      
2. Current State of Supplier Management 
   • Supplier Selection and Satisfaction: Explored how businesses select suppliers, their satisfaction with current suppliers, and the importance of credit account management processes.
   • Technology Use: Participants were asked about the technologies they use for managing suppliers, whether they use multiple technologies, and the effectiveness of these tools.
   • Supplier Credit: Insights were gathered on whether businesses use supplier/trade credit, the extent of its use, and satisfaction with the management of this area.
      
3. Challenges in Supplier Management 
   • Pain Points: The interview delved into the challenges SMBs face when managing suppliers, including onboarding difficulties, payment terms, and specific risks in the P2P process.
   • Remediation Strategies: Participants discussed measures to address these challenges and compared them to other business challenges.
      
4. Future of Supplier Management 
   • Prioritization of Supplier Management: Respondents shared how important supplier management will be moving forward, and whether they anticipate changes in the number of suppliers they engage with.
   • Solutions and Platforms: Focused on the potential impact of supplier-provided platforms (e.g., business buyer portals) to improve the management of supplier relationships.
   • Payment Preferences: Discussed what payment methods would be ideal for their business, and the features they would like to see in future solutions from suppliers.

5. Conclusion 

• The interview concluded with an open-ended prompt for respondents to share additional insights or thoughts not covered in the interview.

Key Insights and Findings

1. Supplier Selection and Satisfaction:
   • SMBs prioritize reliability, cost-effectiveness, and credit flexibility when selecting suppliers. Many businesses noted that credit account management plays a significant role in supplier decision-making.
   • Despite challenges, businesses were generally satisfied with their suppliers but emphasized the need for better communication and improved credit management processes.
      
2. Technology Use in Supplier Management:
   • A variety of technologies were being used to manage supplier relationships, with enterprise resource planning (ERP) systems and procurement platforms being most common.
   • However, many businesses reported using multiple technologies in an uncoordinated manner, which led to data silos and inefficiencies.
   • Automation and real-time tracking were highlighted as important features for improving supplier management.
      
3. Challenges in Supplier Management:
   • Onboarding delays, inefficient payment processes, and long payment terms were among the most common challenges faced by SMBs.
   • Remediation strategies included outsourcing certain supplier management tasks and leveraging technology to streamline payments and improve cash flow.
      
4. Future Outlook and Innovations:
   • Respondents indicated a growing interest in adopting digital platforms that streamline the procurement and payment processes.
   • There was a high demand for integrated supplier platforms that provide features like automated invoice management, real-time supplier communication, and easy integration with accounting systems.
      
5. Supplier Preferences:
   • Flexible payment terms were a significant factor in supplier selection, with many businesses indicating a preference for shorter payment cycles or dynamic payment terms.
   • Businesses also expressed interest in suppliers providing analytics and reporting tools to help them monitor and optimize supplier performance.

Conclusions and Recommendations

The findings suggest that SMBs face significant challenges in supplier management, particularly around onboarding, payment terms, and credit account management. Businesses expressed a growing need for integrated supplier platforms that provide automation, real-time tracking, and customized payment terms. These platforms would help businesses streamline procurement processes, improve cash flow management, and enhance overall supplier relationship management.

This research provides valuable insights for the client in developing a better approach to engage with SMBs, offering solutions that address their pain points in supplier management while enhancing the overall supplier experience.