Cloudy With a Chance of Rain-Making

One of the biggest hassles in exporting goods to a foreign land has long been getting paid. For years, small and medium-sized exporters tried to obtain letters of credit from U.S. banks guaranteeing they would get paid on a timely basis, but it was expensive and time-consuming—and precious few banks wanted to be in that low-margin business. Many exporters made the gut-wrenching decision to just ship their goods and simply hope they would get paid quickly.

Avery Brewing, a 21-year-old maker of craft beers based in Boulder, Colorado, has solved that payment problem by taking advantage of cloud computing, the poorly defined but hugely powerful notion of placing much of a company’s IT infrastructure and software needs in the hands of large providers ranging from SAP and IBM to Amazon.com, Salesforce.com and NetSuite.

Avery did created an Enterprise-Resource Planning (ERP) system in the cloud, relying on SAP software customized by Orchestra Software, a specialist in the brewing industry. That system was aimed at running the overall business—not exporting. However, it has come in handy when selling brewskies to the Japanese and Swedish markets—and even a scientific research station in Antarctica. “One of the big features that our ERP system will allow us to do to expand our global footprint is a customer web portal that our international customers use to place orders directly,” explains Conner Helton, the company’s assistant controller and architect of its IT systems. “They can track the status of their shipment, see if there are any changes and also make payment through that system. Getting international payment within a week’s time is almost unheard of.”

The Next Frontier
Welcome to the next chapter of how small- and medium-sized enterprises (SMEs) can compete globally. Just as the fax machine transformed doing business internationally and then email transformed it again, a new wave of technologies is giving smaller companies the ability to go places and do things they would never have dared before. Some of the new tools are not cloud-related. Avery Brewing, for example, relies on Google Translate to help communicate with non-English-speaking customers and Google Earth to study how specialty malt crops are growing in Canada. Social media tools, meanwhile, allow small companies to reach distant customers and lure them to their websites. Data-mining tools provide new insights into what customers want.

However, the cloud does appear to be at the center of growing competitiveness among small and medium-sized firms. Being able to expand a company’s IT infrastructure quickly and to cherrypick precisely which functions are needed allows CEOs to take on global risks they might not have once contemplated. Flexibility in “scaling” is particularly important for smaller companies because they can’t always anticipate a surge in orders. Using the cloud, “you can scale within hours, not months,” says John Mason, IBM’s general manager of the midmarket.