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SMBs and Collaboration: How to Play with the Big Boys

By Thomas Wailgum

February 01, 2006 — CIO —

It takes two to tango, two to speak truth (said Thoreau) and two to get one in trouble (said Mae West). Here’s another thing two people can do: run the IT operations for a company with more than 300 employees, revenue of about $65 million, and a 175,000-square-foot warehouse that runs three shifts seven days a week and ships more than 20,000 cases of snack food per day to stores such as Wal-Mart and Target.

Snak King’s IT director, Brad McClave, who is one of those two people, uses time-tested technologies such as Web-based EDI applications, firewall and antivirus software, and warehouse management systems to get his company’s products onto the shelves of much larger, extremely demanding customers. In conjunction with judiciously chosen IT service providers, these basic technologies have enabled the company to quickly grow to the largest snack food manufacturer on the West Coast—without all of the traditional IT overhead. When it comes to a big staff and expensive systems, McClave says, "I don’t have the time and money to do that."

Small companies, and even many midsize companies, can’t afford gargantuan ERP, CRM and supply chain management systems that take large IT staffs many months to install and cost millions. Yet the established behemoths demand electronic data transfer, purchase orders and invoices, as well as other digital shipping requirements. To do business with the big boys, the deal is simple and clear: "If you don’t cut it, the next person is in. You’re out," McClave says.

But the opportunity is too good to pass up; a small company can quickly become a big one by working with industry giants. If you want to get in the game with the likes of Wal-Mart, Travelocity and Nordstrom, it can be done—with tried-and-true technologies and some help from outside IT services providers.

Just ask Emily Harrow, who started a cosmetics company two years ago in her parents’ home and now sells her Mixed Emotions line of bath and beauty products on the Home Shopping Network and in several large retailers. She has no IT staff whatsoever and uses a Web-based EDI product to transact with the giant retailers.

"It would not have been possible to work with these larger companies without [EDI]," Harrow says. As for the technology’s ease of use: "It doesn’t take a brain surgeon," she says.

EDI, for one, certainly isn’t leading-edge technology, "but it’s low-cost, low-tech, stable and not going anywhere," says Ken Vollmer, a principal analyst at Forrester Research. As a result, EDI transaction volumes have been increasing by 5 percent to 10 percent every year, Vollmer says, driven in part by smaller companies such as Snak King and Mixed Emotions that are turning their big dreams into realities.

 

 

 

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