Taking control of business is easy

Publish Date: July 1, 2005
Author: Cindie Smart

 

Only efficient wine businesses are likely to survive the current period of consolidation, competition and tight margins. But, more than most other companies, wineries are destined to be challenged by the complexities of business when “business’ includes being a primary producer, a wholesaler, a manufacturer, a distributor and sometimes a bed and breakfast operator and a restaurateur, among other things.

Wineries generally have a different management system for each of these facets of business, which doesn’t make much sense from an efficiency perspective. An Australian company called Ezy Systems recognized this as an issue more than 10 years ago.

Ezy who? If you’re not a member of the wine industry you’ve probably never heard of it, but this small company from Bendigo, Victoria, is now exporting to five countries and has developed software in partnership with major Australian wine companies including Peter Lehmann and McGuigan Simeon Wines.

Its creation, EzyWine, is an integration of all the software packages needed to run a wine business into the one program. It means wineries no longer need to run separate accounting, bottling, payroll, vineyard, asset register, marketing, distribution, budgeting, mail order, wine making, cellar doors sales and preventative maintenance packages, removing the inaccuracies and costs associated with double-entry.

Believe it or not, there is no other product like it in the world.

Peter Ellis and Nick Cugura started the company in 1993. “We wanted to start a software company and were approached by Miranda Wines and, what was then, Rossetto Wines to develop integrated software for the wine industry,” Nick said. “I ended up living in Griffith with Shayne Cunningham, who was chief winemaker for Miranda at the time, and I spent my days at the wineries studying how they ran, from accounting to bottling to maintenance to marketing. Kevin Rossetto showed me what happens behind the scenes, from maintaining the bottling line to servicing tractors.”

This led to the development of five software modules to cover all areas of the wine business: plant servicing, accounting, vineyard management, winemaking and bottling.

It took Nick and Peter eight months to complete their research, working seven days a week, before a prototype of EzyWine could be developed.

Three wineries paid a nominal fee to purchase the software prior to vintage 1994 - Miranda, Rossetto and Australian Vintage (now part of McGuigan Simeon). “When we released it at this stage, we thought we were 80 to 90% there, but to our shock we discovered we were only 60% of the way there in terms of offering a fully integrated software package,” Nick said. “so we decided that when a winery discovered an issue with the software, we’d address it for free.” For example, there was no extra cost to any client when Y2K and GST enhancements were introduced in 2000.

Surprisingly more than 10 years later, Ezy is still offering a free change service to clients and has no plans to stop. This, from a software company? Difficult to believe, but true.

“We realized that the free change policy was good for the software and it was obviously good for the clients. We’re probably the only software company in the world with a policy like it” Nick said.

As changes were being suggested at a rapid rate, Nick introduced a regular newsletter to keep the three clients at that time informed. This service has also continued.

EzyWine was officially launched in 1995 and 30 wineries jumped on board.

Nick credits this ‘overnight success’ to word of mouth and sales seminars to introduce Australian winemakers to the product. Nick ran seminars around Australia from 1994 to 2000 where he would invite a handful of wineries to a conference venue and demonstrate the software. “I think we had, on average, four wineries that would attend a seminar, but three would buy straight away and the fourth would buy after a few months. So we had a very high success rate,” he said. “In the past four and a half years or so, our sales have solely been based on word of mouth. Developing clients in Bulgaria, Chile, Argentina and Georgia was based on EzyWine’s growing reputation.”

Initial moves to export occurred early in EzyWine’s life. Nick started running sales seminars in New Zealand - the country chosen due to its accessibility. One of Ezy’s first Kiwi clients was Villa Maria, which was an impressive way of entering the market. Ezy now has more than 25 sites in the country and a local distributor.

Entry to the South African market was initiated by a meeting at an Australian Wine Industry Technical Conference in Adelaide. A South African named Gerrie Wagner from Boschendal Wines (the largest private winery in South Africa), invited Nick to demonstrate the EzyWine software at his winery. “I went over and presented it and sure enough they went with it. Again, we were lucky because Boschendal is very well respected in that market so we now have about 60 sites in South Africa,” Nick said.

Ezy now has international distributors in New Zealand, South Africa and South America. In Australia, Ezy employs 14 people, including six qualified accountants who receive about 70 phone calls a day from wineries. Ezy Systems does not employ a sales or marketing representative and Nick says the company’s success is based on three factors. One, the product is comprehensive and removes all double entry, making it an effective management tool. Two, the product has been well received by respected wineries around the world, so word has spread. And three, the free change policy ensures the software cannot become obsolete.

For those in the IT know, EzyWine has recently been adapted to suit SQL platforms. This new version is called EzyWine Enterprise, and Peter Lehmann and McGuigan Simeon worked with Ezy Systems and helped fund the development of the program. EzyWine Enterprise is now being used by wineries around the world, including Casella in Australia and DGB in South Africa.

Nick said EzyWine Enterprise was suited to large wineries and would operate on a variety of SQL platforms while EzyWine was suited to small to medium wineries and would operate on all MS Windows products.

There are now more than 250 wineries using Ezy Systems products around the world and about 3,000 individual users. Nick said it was rewarding to think of the rapid uptake of EzyWine and now EzyWine Enterprise, but the biggest thrill was the feedback he received from wineries. “In the last few years we’ve seen wineries paying more attention to their margins. We know that they want better stock control and it’s because winemaking is now so competitive,” he said. “The feedback I often get is that, prior to Ezy going in, management had identified products that they thought were making money which, after they installed Ezy, they discovered were actually losing money.”

“And conversely, some products they thought were time wasters, were actually making them a profit. This was simply a result of defining real costs - if you know your costs, you can identify which products are performing and which ones aren’t. To the shock of many accountants, they are finding their Rose is actually the money spinner while the reserve Shiraz is losing money! This has a huge impact on product offering, efficiency and profitability.”

 

Source: Australia's Wine Business Magazine

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