The gap between what technology vendors are selling into the mid-market and what mid-market companies are equipped to absorb has widened, materially, in the last several years. The cause is not, principally, a failure of the mid-market customer's ambition. The cause is a structural mismatch between the vendor's product, pricing, and implementation model — calibrated to enterprise customers — and the mid-market customer's organizational reality.
The mid-market customer's reality is shaped by three constraints. The first is organizational depth: the mid-market company has a thinner technology bench than its enterprise counterparts, and the leaders responsible for technology adoption are typically also responsible for technology operations, security, and the day-to-day support of the business. The second is the cost of internal disruption: a mid-market company that takes its operational technology offline for a transition is, in nearly every case, more exposed than the enterprise customer with redundant systems and dedicated transition staff. The third is the cost of the program itself: the technology program that costs the enterprise a small share of its operating budget often costs the mid-market company a significant share of its operating budget, and the executives responsible for it are accountable to the board for the spend in a way that the enterprise CIO is rarely accountable for any single program.
The vendor's structural problem
The vendor's structural problem, as I have observed it from inside both the vendor environment and the customer one, is that the mid-market customer is being sold the enterprise product. The product was not designed for the mid-market constraints I have just described, and the implementation model that accompanies it was not designed for them either. The vendor is, in many cases, aware of this. The vendor's response has typically been to package the enterprise product at a discount and to offer implementation services that are scaled down from the enterprise version. The result is the enterprise program at a lower price, and the lower price is rarely low enough to compensate the mid-market customer for the cost of attempting to implement an enterprise program with mid-market organizational depth.
The responsible response
The responsible response, for the mid-market executive making technology decisions, is to be honest about the constraints and to design the program around them rather than around the vendor's reference architecture. This is rarely the program the vendor recommends. It is, in our experience, the program that succeeds.
Concretely, the responsible mid-market technology program has a few distinguishing characteristics. The scope is narrower than the vendor proposes — only the modules and capabilities the business will actually use in the first eighteen months. The implementation is sequenced rather than concurrent — a single domain in production before the next is contemplated. The internal organizational investment is at least equal to the external technology investment — adoption is treated as a project of similar weight to the technology itself. And the business's existing operating model is the starting point for the design of the future state, not an obstacle to be replaced wholesale by the vendor's reference operating model.
The outcomes that follow from this discipline are, in our experience, both better and less rhetorically impressive than the outcomes the vendor's program would have produced in its initial proposal. The mid-market companies that have adopted this discipline have found, with surprising consistency, that they are running on better-fit technology, with higher adoption, at meaningfully lower total cost of ownership, than the mid-market companies who have attempted the enterprise program at a discount.