This skill/knowledge/experience is acquired over many years, and must be demonstrable and documented, which means the SME must be qualified in the competencies they practice.
Here's a staggering statistic: Research from the Project Management Institute reveals that 60% of project failures can be attributed to the lack of qualified leadership and expertise, particularly in areas where skilled professionals excel. Meanwhile, organizations are grappling with an unprecedented knowledge crisis—when a Subject Matter Expert (SME) leaves, they take irreplaceable expertise with them.
The SME acronym stands for Subject Matter Expert—a professional with deep, specialized knowledge in a specific field or domain. But these aren't just any experts; they're the go-to authorities whose knowledge becomes mission-critical for organizational success.
The demand surge isn't coincidental. According to McKinsey research, organizations that excel at decision making report the ability to make high-quality decisions fast and see better financial results, with respondents at winning organizations twice as likely to report superior returns from their decisions. This speed and accuracy increasingly depends on accessible SME knowledge.
Growing business complexity has amplified this need. McKinsey research on internal operations shows that the process insights approach is about augmenting the knowledge and intuition of frontline personnel and subject matter experts, with growing complexity of services requiring coordinating multiple functions in nonlinear ways making expertise more critical than ever.
Organizations with accessible SME knowledge report dramatically faster decision-making cycles. When teams can tap into expert insights quickly—rather than waiting days for an overloaded SME to respond—they maintain momentum on critical projects and proposals.
SME stands for Subject Matter Expert—someone with deep expertise in a specific field or domain. But the definition goes much deeper than surface-level knowledge.
Research from ResearchGate provides a comprehensive definition: "A subject-matter expert has specialist skills, knowledge, and experience in a particular field. This skill/knowledge/experience is acquired over many years, and must be demonstrable and documented, which means the SME must be qualified in the competencies they practice. The SME will be continuously learning, and have their expertise recognised by their industry and peers, which gives further support to their credibility."
SMEs possess both theoretical knowledge and practical experience in their specialty area. The term applies across industries: technical SMEs who understand complex product architectures, legal SMEs who navigate regulatory requirements, compliance SMEs who ensure adherence to industry standards, and product SMEs who understand every nuance of functionality and positioning.
According to research by Expert Beacon, "According to a study by the Project Management Institute, organizations that effectively utilize SMEs in their project teams are able to mitigate risks and deliver projects on time and within budget at a 21% higher rate compared to those that don't. Research by McKinsey & Company suggests that organizations that make data-driven decisions are 23 times more likely to acquire customers, 6 times as likely to retain those customers, when leveraging SMEs who bring their deep knowledge and analytical skills to bear on complex data sets and business challenges."
SMEs are recognized authorities whose knowledge is sought for critical decisions. Regular experts have competency; SMEs have mastery and are often final decision points on complex questions in their domain.
According to research on expert development, "Research shows that even the most gifted performers need a minimum of ten years (or 10,000 hours) of intense training before they win international competitions. What consistently distinguished elite surgeons, chess players, writers, athletes, pianists, and other experts was the habit of engaging in 'deliberate' practice--a sustained focus on tasks that they couldn't do before."
SMEs typically have 7-10+ years of focused experience in their domain, but more importantly, they're the people others turn to when facing their most challenging questions. They don't just know the answers—they understand the nuances, exceptions, and context that makes their guidance invaluable.
SMEs wear multiple hats, but their core activities center on knowledge sharing and validation. They review and validate technical content in proposals, RFPs, and documentation—ensuring accuracy and compelling positioning. They provide authoritative answers to complex customer and internal questions that could make or break deals.
Research from NCBI shows that "Subject matter experts participate in elicitation of knowledge and training programs, where they provide guidance and share expertise with practitioners." On average, SMEs spend 25-40% of their time on knowledge-sharing activities, from formal training sessions to impromptu consultations.
SMEs train teams, develop best practices, and ensure accuracy in external communications. They're often the final checkpoint before customer-facing content goes out the door.
SMEs are essential for crafting accurate, compelling technical responses. They validate claims, provide supporting data, and ensure compliance with requirements. In complex B2B sales cycles, SME input often determines whether a proposal wins or loses.
However, SME bottlenecks are the #1 cause of RFP deadline pressure in enterprise organizations. Teams often wait days for SME input, creating stress and risking deadlines. This is why organizations are increasingly looking for ways to capture and scale SME knowledge through technology.
SMEs contribute to product development consultation and feature validation, ensuring new capabilities align with market needs and technical feasibility. They handle customer success escalations and technical support, particularly for complex issues that require deep expertise.
They also create content for marketing and sales enablement, translating complex technical concepts into compelling business value propositions. According to systematic literature review research, "Knowledge sharing and transfer activities have positive impact on efficiency and innovativeness of SMEs' working behavior and methods, with rising interest in knowledge transfer topics."
The challenge of scaling SME knowledge represents one of the most significant operational bottlenecks facing organizations today. According to PR Newswire research, "42 percent of institutional knowledge is unique to the individual - when combined with average cost calculations, this yields knowledge loss costs of $42.5 million in annual productivity loss and $4.5 million in inefficient onboarding per large enterprise."
SMEs are frequently overburdened, creating response bottlenecks across the organization. Traditional documentation methods capture only a fraction of nuanced SME expertise—the contextual understanding, edge cases, and practical insights that make their knowledge so valuable.
Research on knowledge loss from turnover reveals the scope of this challenge: "Systematic literature review of 91 empirical studies on knowledge loss induced by organizational member turnover (KLT) reveals broad scope of KLT effects at organizational and unit level, with departing employees taking subject-matter expertise, routines explaining decisions, and awareness about work practices."
High-performing SMEs become single points of failure for critical processes. Proposal teams often wait days for SME input, risking deadlines and deal momentum. This creates a vicious cycle: SME burnout leads to decreased quality and increased turnover, which amplifies the knowledge loss problem.
Research on knowledge barriers explains that "The act of transforming implicit-to-explicit knowledge through 'externalization' faces significant barriers, with knowledge managers' inability to catalog internal barriers to knowledge exchange being a significant organizational barrier. Traditional methods struggle to capture tacit knowledge effectively due to its contextual and experiential nature."
AI-powered platforms can learn from SME responses and suggest accurate answers for routine questions. Arphie's approach uses AI to capture and scale SME knowledge across proposal workflows, learning organizational voice and technical accuracy from SME inputs.
Teams using Arphie see a 70%+ reduction in time spent on RFPs and security questionnaires, shifting from tedious, manual workflows toward being able to focus on strategic, high-impact activities. Intelligent content libraries reduce repetitive SME inquiries by up to 70%, freeing SMEs to focus on novel, high-value questions that truly require their expertise.
According to Gartner research on knowledge management, "Successful knowledge management programs must support four foundational activities: converse, capture, curate and circulate." Organizations need systems that make SME knowledge accessible without overwhelming the experts themselves.
Creating centralized knowledge repositories that capture SME-approved responses is essential. But static documentation isn't enough—organizations need dynamic systems that learn from SME patterns and reduce redundant questions.
Forrester research on AI in knowledge workflows shows that "AI acts as a cognitive partner, speeding up analysis and generating new insights while enabling cocreation of knowledge with subject-matter experts via a generated first draft."
A single source of truth reduces conflicting information and repeat questions. Version control ensures SME updates propagate across all content, while search functionality allows teams to self-serve before escalating to SMEs.
Arphie connects directly with SME sources—Google Drive, SharePoint, Confluence, and other repositories—to use the latest information in RFPs and suggest answer updates and improvements. This eliminates the constant chase for updated information while ensuring accuracy.
AI can draft responses based on historical SME-approved content, learning from patterns and preferences. Arphie's AI learns organizational voice and technical accuracy from SME inputs, providing transparency by showing the source, confidence level, and AI thought process for each answer.
Smart routing ensures only novel questions reach SMEs, maximizing their impact on truly challenging, strategic work. McKinsey research on automation found that "Activities that account for 10% to 15% of the marketing executive's time can be automated by adapting currently demonstrated technology, freeing up time for more strategic work like developing new strategies and collaborating with other functional areas."
Technology and SaaS companies need SMEs for complex product positioning and technical differentiation. Healthcare and life sciences require SMEs for regulatory compliance and accuracy—McKinsey research on life sciences emphasizes that "Successful scaling requires business leaders, technology teams, and risk management professionals to communicate from the outset; the absence of such collaboration can lead to issues being raised late in the game, when they are much more difficult to fix."
Financial services depend on SMEs for risk assessment and compliance documentation, where accuracy isn't just important—it's legally required. Gartner research on risk assessment notes that "GRAM enables security teams to complete risk assessments quickly and effectively for wider coverage, without being disruptive to business personnel. It involves subject matter experts for objectivity and can be used at a high level for risk profiling or at a granular level for specific resources."
Government contractors rely heavily on SMEs for technical proposal responses. According to FDIC guidance on government contracting, "Your technical proposal will generally be evaluated by a technical evaluation panel separate from the subject matter experts (SMEs) who are deliberately not shown the costs. The final contract awards are made by others (including the Contracting Officer) who consider both technical quality and cost in an effort to find the proposal that offers the best value to the government."
The path to SME status requires deep specialization over 5-10 years in a specific domain. Research from Study.com shows that "Overall, subject matter experts are more likely to have long experience in a field than they are to have formal academic training in that field. However, particularly in fast-changing industries, subject expertise must be maintained through the persistent study of new developments."
Continuous learning and staying current with industry developments is non-negotiable. Building a reputation through thought leadership, publications, or presentations helps establish credibility. Gartner research on thought leadership explains that "Thought leadership marketing (TLM) can differentiate and establish credibility in competitive markets, and effective thought leadership requires more than communicating a point of view: it requires ideas that shape customer consideration and action."
Research on SME selection criteria found that "The three factors rated highest were depth of knowledge, availability, and attitude." Practical application of knowledge to solve real business problems ultimately distinguishes true SMEs from academic experts.
AI will augment, not replace, SME capabilities. McKinsey research on AI agents suggests that "Organizations might consider how they can capture subject matter expertise, which will be used to instruct agents in natural language, thus streamlining complex processes. This makes it easier to integrate subject matter expertise, grants wider access to gen AI and AI tools, and eases collaboration between technical and nontechnical teams."
SMEs will shift from routine knowledge delivery to strategic insight and innovation. McKinsey research on industrial AI notes that "Providing AI assistance to such SMEs can help maximize the impact of AI solutions. With a wealth of historical data and existing subject matter expertise, processing plants are well positioned to create new opportunities."
Organizations that effectively capture and scale SME knowledge will have competitive advantages. According to Forrester research on knowledge management, "Effective management of knowledge assets is essential for maintaining an edge in innovation and responsiveness. Knowledge management solutions play a pivotal role by enabling businesses to capture, store, and share internal know-how."
Tools like Arphie help preserve SME knowledge while reducing operational burden, enabling organizations to scale expertise without scaling headcount. The future belongs to organizations that can democratize access to SME knowledge while protecting and amplifying the strategic impact of their most valuable experts.
What does SME stand for in business?
SME stands for Subject Matter Expert—a professional with deep, specialized knowledge and experience in a specific field or domain, recognized as an authority by peers and organizations.
What is the difference between an SME and a consultant?
SMEs are typically internal experts with deep institutional knowledge, while consultants are external advisors. SMEs understand organizational context and long-term implications, whereas consultants provide fresh perspective and specialized project expertise.
How do you identify subject matter experts in your organization?
Look for individuals who consistently field complex questions in their domain, have 7+ years of specialized experience, are sought out by colleagues for guidance, and whose departure would create significant knowledge gaps.
How can AI help reduce SME bottlenecks in the RFP process?
AI platforms like Arphie can learn from SME-approved responses to suggest accurate answers for routine questions, automatically update content from connected sources, and route only novel questions to SMEs—reducing their workload by 70% while maintaining accuracy and expertise.
Dean Shu is the co-founder and CEO of Arphie, where he's building AI agents that automate enterprise workflows like RFP responses and security questionnaires. A Harvard graduate with experience at Scale AI, McKinsey, and Insight Partners, Dean writes about AI's practical applications in business, the challenges of scaling startups, and the future of enterprise automation.
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