Information technology and the wine trade
Publish Date: October 1, 2008
We’ve convened a panel of Australian technology suppliers to tell us what wineries need to know about technology solutions that fast-track sales, record-keeping, compliance and customer service.
Can you remember working life without email? Spam has become the curse of the computer age, but most people will all happily keep hitting ‘delete’ as they trawl through the inbox, provided our connection to the internet stays true and our server just keeps on keeping on. But there’s more to an IT solution than email and internet.
More and more, technology is providing solutions that help us operate faster, respond to customers’ needs, identify and fill a niche, and comply with paperwork and record-keeping.
With so many IT consultants and providers in play in the Australian and New Zealand wine industries, we’ve asked a panel of experts to share their tips on the business of technology in the wine industry.
Stephen Blacketer is the business owner and principal consultant of Morton Blacketer, an Adelaide-based company which provides IT consultancy and software development services to the wine industry. Morton Blacketer is the developer of CellarDoorMETRICS ® and VineAccess®.
The directors of Ezy Systems, Nick Cugura and Peter Ellis, started the business in 1993 as a result of wineries in Griffith wanting to streamline their operations and meet the AWBC LIP requirements being introduced at the time. Previously, Cugura was an Oracle consultant working as a project leader for large accounting, banking and petroleum companies in Australia and North America, while Peter was a senior programmer/analyst for 6 years specialising in accounting systems.
Brian Riordan established GrowData Developments 11 years ago. Initially his focus was on developing an easy-to-use management program for orchards. Two years later he was asked to create a similar system for vineyards. GrowData supplies horticultural management software throughout Australia and its reputation is rapidly expanding to New Zealand and beyond.
Can you explain the key services your company offers the wine industry?
Stephen Blacketer: We supply two products at opposite ends of the supply chain. VineAccess and CellarDoorMETRICS. VineAccess is an online supply chain management system for wineries and growers to communicate and share viticultural information during the course of vintage. CellarDoorMETRICS allows winery cellar doors to track their sales and visitor numbers, measuring their performance over time and also benchmarking their results with others in their region, state or nationally. This year we launched the system in New Zealand so that data is now building up and cellar doors from both countries can see how they compare on an international basis.
Nick Cugura: We provide a powerful, totally integrated software package called EzyWine. EzyWine streamlines all your vineyard, winemaking, bottling and financial procedures into one comprehensive package. Our services include on-site training and consultation, “hotline” phone support, web knowledge base, comprehensive training notes, software enhancements and upgrades.
Brian Riordan: GrowData Developments is an Australian-owned company which specialises in management software for the horticultural industry.
How does your service make wineries more efficient operators?
Stephen Blacketer: VineAccess is all about making information available immediately to all members of the supply chain and reducing duplication of data entry. We found that large amounts of time was spent keying, re-keying and collating information which was communicated multiple times in different forms; so the primary goal of VineAccess is to ‘enter data once’ and share it, as necessary, along the supply chain. These activities take up a lot of time from skilled people, which can now be used more productively.
CellarDoorMETRICS is all about tracking and improving performance, identifying benchmarks and using this analysis to operate more effectively and become more profitable. One of the key benefits is that it allows you to compare your performance with others, which then raised questions like “why are they able to operate at a certain level when I can’t?”
Nick Cugura: Our service empowers decision-makers with real-time reports that highlight revenue leakage. Our 300 customers no longer need to run separate packages for accounting, bottling, payroll, vineyard, asset register, marketing, distribution, budgeting, mail order, winemaking, Point of Sale (POS), preventative maintenance, warehouse management and CRM, removing the inaccuracies and costs associated with double entry.
Brian Riordan: GrowData enables growers to easily track chemical applications, labour and machinery costs down to block and variety level, which is a primary management tool in understanding all the components which go towards the cost of production.
Do you deal with IT in industries other than wine/grapes?
Stephen Blacketer: Yes. We predominantly focus on database-driven web applications for a range of clients. For example, we have developed and run a sales benchmarking tool for the Ford Motor Company that is used across Asia-Pacific and Africa. We are also developing systems for production management in the pharmaceutical industry. Over the years, we have worked in wool, irrigation, cereals and grape production, so have developed an agribusiness focus.
Nick Cugura: We specialise in the winery industry and are the largest supplier of Enterprise Resource Planning solutions in the world.
Brian Riordan: GrowData are major suppliers of management software to the orchard industry.
In your opinion, do the Australian and the New Zealand wine industries use technology to best effect?
Stephen Blacketer: Some clients identify the technology to use, get the training and infrastructure right, appropriately resource implementation and operations internally, and use the technology to the best effect. Others don’t. The most significant problem is in wineries not having faith in growers’ ability to use technology.
Nick Cugura: Wineries are utilising technology to increase profit margins and track costs. When technology is installed, training is generally provided. However, when staff leave, knowledge leaves. So to use technology to best effect, there has to be an available resource of knowledge to draw from. This is not always available, especially in remote areas. Technology does not run itself, and garbage in = garbage out. Therefore, suitable qualified and experienced staff are paramount to maximising technology. Ongoing training and support is essential to ensure that technology is continually utilised by your staff. This is why Ezy Systems provides a help desk, onsite training, training notes, newsletters and regional seminars.
Brian Riordan: There are many that appreciate the importance of recording and measuring cost inputs, especially the larger vineyards. Unfortunately they tend to use spreadsheets as a method of capturing data, which can be cumbersome to record and difficult to extract meaningful reports.
In which area would you say (generally) wineries/vineyards are most advanced with their IT?
Stephen Blacketer: Their winemaking systems.
Nick Cugura: Controllers to run winemaking equipment efficiently.
And in which areas would you say (generally) wineries/vineyards are least advanced with their IT?
Stephen Blacketer: Viticultural systems.
Nick Cugura: Wineries are not utilising advancements in network technology to track stock and maximise sales.
Brian Riordan: Spray diaries, chemical inventory management and the tracking of fertiliser applications.
When you are asked to consult or quote to a wine company…what is the major thing you see wineries ‘doing wrong’… or something that indicates to you wineries are ‘missing out on’ because of their IT solution?
Stephen Blacketer: Understanding the values of easily accessible and accurate information, and what is necessary to entrench a new system as part of your operations.
Nick Cugura: Not a single client has an accurate handle on the true wine cost. Prior to purchasing EzyWine, the client did not have accurate costs and are often surprised when they discover that some products are being sold at a loss.
Brian Riordan: Generally the type of grower interested in looking at a database management tool such as GrowData tends to be management-oriented anyway and is interested in refining their data gathering and reporting process. They tend to have multiple spreadsheets which are cumbersome to use, and restrict their ability to draw information together into meaningful reports.
What quality assurance do you offer wineries/vineyards that an IT solution you provide will be delivered on time and do the job required?
Stephen Blacketer: For custom projects, we have a documented process of specification, design, software development, testing and quality assurance internally before pre-releasing for user acceptance testing. Once any issues arising are addressed, the software will be promoted into production. We use the same process for our wine industry products. We will commit to ‘service level agreements’ with clients where service standards (such as response and resolutions times) are defined and adhered to or penalties may apply.
Nick Cugura: We have an extensive installation schedule that includes the conversion and loading of the clients’ reference data (such as customers) and balances (such as aged customer trial balance) backed up by support staff. Extensive testing is performed prior to every six-monthly upgrade.
Brian Riordan: Personal testimonials from clients is the best guarantee that the software and support will exceed the client’s expectations.
How does IT solution/service pricing work? Can ‘basic’ IT solutions be purchased and ‘added on’ or is it better to go for the maximum software/solution you can afford from the outset rather than add-on?
Stephen Blacketer: VineAccess and CellarDoorMETRICS are provided by subscription. Growers can use the online VineAccess Spray Diary free of charge. They are able to upgrade their subscription to use the spray planning and chemical shed inventory management system for as little as $299 pa. So the basic solution is free of charge and ‘add ons’ can be purchased for an expanded software suite.
CellarDoorMETRICS was developed in co-operation with the Winemakers’ Federation of Australia, with Foundation Partners including the Australian Government, and state and national tourist bodies. The subscription for Australian cellar doors is subsidised by these bodies to make it very affordable.
For custom projects we provide clients with an initial estimate. Upon completion of a detailed specification, we can provide either a more accurate estimate or a fixed price. For different types of work there are both advantages and disadvantages of fixed price and time, and materials engagement.
Nick Cugura: EzyWine Full System is priced from $28,000; EzyCellar Vineyard, Weighbridge, Winemaking, Bottling and Plant Servicing starts from $18,000; EzyAccounts Accounting starts from $18,000; and Enterprise SQL version of EzyWine begins at $100K.
Brian Riordan: GrowData has been designed to expand with the addition of modules as required. The spray diary module is $1500 and modules can be added to suit the needs of the client.
What about customised models versus the ease of ‘off-the-shelf’ solutions?
Stephen Blacketer: There are pros and cons to off-the-shelf and customised solutions. The advantages of custom software are you can have whatever you like:
· You can specify your exact requirements and then have the system built to satisfy those requirements.
· You can change the system continuously as your business requirements change.
· You make your IT solution fit your business.
The disadvantages are:
· You have to bear the full cost of software development.
· You need to have internal resources prepared to spend time specifying the system, working with the developers to ensure what was specified was delivered and testing to ensure that what is being delivered will satisfy your business requirements.
· There is an ongoing maintenance requirement for custom software – as technology changes, the business requirements change, the business processes change, the business environment changes (e.g. legislation) and you have to be prepared to bear the cost of keeping your application current.
· Delivery time can be significant.
With off-the-shelf software, there is a different set of compromises. On the upside, the advantages are:
· Immediate delivery of a product.
· You don’t bear the cost of software development (unless you request changes that you are prepared to pay for).
· You don’t have to do any testing of the product (as you have an expectation that it is fit for the purpose).
· You have gained a collective knowledge of the industry by virtue of the processes used by other industry parties being built into the system.
· Depending on how widely adopted the software is, you can find that when you recruit staff, they already know how to use the system.
On the downside:
· You should probably only aim for an 80% fit and accept that you will have to change your business to suit the software that you buy. For some businesses, this can be an unacceptably high price to pay. For others, it is not a problem.
· You end up with a series of ‘islands’ of information – so that you have a winery system, a lab system, a viticulture system, a point of sale system. an accounting system…that don’t talk to one another very well, or at all. This means that reporting is often difficult and flow of information through a business can be disjointed.
· You don’t control your own destiny. You only get to use the features that the software vendor decides to deliver. Vendors often have pre-determined delivery schedules, so that even if they decide to implement your change, you may not receive it for months (until the next release cycle.
· You can get ‘locked in’ to a vendor and be held hostage. Any change requests that you make might have an exorbitant price.
· Vendors might decline to make changes that you require if it doesn’t fit their strategy.
· Vendors might make changes for other customers that you don’t want, as it will make it more difficult to run your business.
· Another significant problem to the wine industry at the moment is that most solutions in this industry are built on old technology - which are, in an IT-sense, obsolete. This is an issue because, as IT environments become more connected and capable, old technology does not deliver the benefits of that capability. This is particularly apparent when linking disparate systems to exchange data seamlessly. When using older technology, this becomes difficult.
Nick Cugura: Every production cost is captured so as to ensure the true cost is reported to management. There are hundreds of system parameters that allow the customer to customise EzyWine to meet their specific business requirements such as contract winemaking and bottling. Ezy Systems has a free change policy with contributions from thousands of users from several countries ensuring the system keeps up with world’s best practices, meets your requirements as your business grows and does not become obsolete. For example, the client can customise the POS buttons to meet their requirements.
Brian Riordan: The modulised method on adding to the GrowData Management System allows growers to add functionality as required. This ensures that the system is kept as simple as possible for the client, which makes it an easier program for growers to manage. Most additional requirements of the large growers have already been developed and are available as a module, but we are happy to create a function to suit the specific needs of a client.
How do you think the IT industry has changed for the better, in terms of provision of services to the wine industry today versus a decade ago?
Stephen Blacketer: We have been working in the wine industry for around five years now, so it is hard for us to say.
Nick Cugura: The most notable change in the IT industry is that expensive mainframe computers and large IT departments are no longer required, saving the winery industry millions and allowing them to focus on making and selling wine. Also portable devices, such as a mobile phone, can be utilised to record a sale or check vessel composition.
Brian Riordan: The advances have been significant in relation to the ‘usability’ of the software and also the ease of communication. Web-based conferencing has made demonstrating the software and providing support and training a breeze.
Is the IT industry a difficult one?
Stephen Blacketer: The key challenge in the IT industry is the constantly changing technology. This impacts on maintenance of current skills and can mean that products you have spent years developing can become technologically obsolete (in a relatively short time) and difficult to support, even though they still perform the function they were intended to. At some point, you may have to rewrite a perfectly good application into the current technology to ensure its ongoing maintainability and compatibility.
Another issue is keeping abreast of the current technology and seeing how you might be able to use that technology to deliver better service to customers - without being caught going down ‘blind alleys’. We try to monitor technology developments and try to choose the right time to adopt those technologies. We try to avoid the ‘bleeding edge’ and adopt technologies that are becoming a mainstream standard.
Nick Cugura: Not at all… keep it simple. Don’t keep up with the latest version of Windows if your network is running fine.
Brian Riordan: It’s only as difficulty as IT people choose to make it. Good design is a rare commodity in the software business. Well-designed software makes even the most complicated process easy to manage.
I’m sure you’ve heard about the environment arguments in regard to ‘food miles’ and ‘carbon footprints’. What are some of the environmental benefits that wineries can access through IT?
Stephen Blacketer: If you can’t measure it, you can’t manage it. IT systems provide a basis for recording and comparing all kinds of information. This is equally applicable in environmental management. VineAccess can record and provide information for environmental management in your vineyard. With the recent release of our vineyard planning module, vineyard managers are alerted to inappropriate chemical applications prior to spraying. This not only increases food safety but also supports environmental protection. It also uses electronic communications, reducing the paper trail between wineries and growers.
Nick Cugura: Transactions recorded in EzyWine do not have to be printed, sent or stored. Documents, dockets and reports can be emailed. For example, statements can be electronically sent to every customer. EFT payments remove the need to write and post cheques to growers, employees or creditors.
Brian Riordan: Certainly the transfer of data electronically saves time and resources. GrowData’s ability to track all activities also lends it to providing similar traceability to carbon footprints within a vineyard.
What do you see in the future for your business in the wine industry?
Stephen Blacketer: We will continue to provide products and services to our winery and grower customers and develop products to help them manage information and their businesses more efficiently, as we see opportunities to support them.
Nick Cugura: More customers will utilise mobile technology to access EzyWine remotely through the global network. Utilise barcodes to streamline winery production, stock control and warehouse logistics.
Brian Riordan: GrowData is continually expanding the functionality of its software with new modules. Recent additions include the use of touch screens for employees to enter their start/stop times, as well as the activities undertaken for the day and the blocks involved. This data can then be directly uploaded into payroll and accounting software without administration staff having to manually enter timesheets.
Water budgeting to block and shift level will also save growers many hours of spreadsheet time in calculating water allocation.
Grapegrower & Winemaker thanks Stephen Blacketer, Nick Cugura and Brian Riordan for participating in our forum.