Andrey Mazurov has built a successful financial expert career in Moscow, Russia. Everything had changed when he got a message from a close friend who was struggling with developing the wine business in Marbella, Spain. Mazurov was enjoying his life in Thailand at that moment. Nonetheless, he has accepted the invitation to get on board as a CFO and help set the company up for success.
How he managed to solve this task, and why the right tools and business automation matter? Read our new story.
First steps: identifying core problems
In his first days within the company, Andrey Mazurov's main goal was to identify growth points and current limiting factors. It did not take him too long to understand that the then company's financial analytics and planning toolkit was outdated, redundant, and prone to errors.
The main problems were:
Excessive tools bundling – the data was dispersed throughout multiple tools, including Excel spreadsheets, which made it hard to collect it in one place for the proper analysis.
Manual labor – dealing with spreadsheets and the need to export and import data from multiple accounting programs led to mistakes, sometimes quite costly ones.
Lack of analytical and planning features – all tools used in the company offered almost no features for analytics and planning, making the decision-making process more complicated and gut-based, not data-driven.
Therefore, the key goals to solve using a new business automation platform were:
Creation of a unified business management system covering all business units, including several legal entities.
Implementation of automated assets accounting.
Analytical capabilities for better planning and earning/costs analysis.
Working towards success: determining essential requirements
The new automated business process workflow should be tailored to the company's needs. Also, Mazurov has analyzed well-known ERP implementation cases that did not lead to success. Based on that knowledge and the understanding of the current corporate infrastructure, the following requirements were formulated:
Everything in one place
One of the critical ideas of the overall development and implementation process was to fix current flaws and see fast results instantly. The D-Wine company had lots of tools and distributed data. This could lead to big problems, like the case of a Hershey's company. In the late 90s, this organization introduced a bundle of ERP and CRM systems along with supply chain applications that were poorly integrated. As a result, the company failed to deliver $100 million worth of Hershey Kisses and sweets during the Christmas season. This lead to lost profits and a stock dip of 8%.
The ERP software platform at D-Wine should be tailored to the tasks of the specific departments within the company (like sales, storage, HR, etc.), allow reducing manual labor and the number of associated mistakes, and it should provide all the necessary data in on place. No more unnecessary bundling!
The focus on analytics
Mazurov wanted to avoid situations like it was with Nike's ERP implementation in the early 2000s when the company had spent $400 million on the project of the new demand planning system. The ERP solution turned out to be too complicated and hard to test. As a result, these factors lead to $100 million in lost revenues and a 20% dip in stocks. The system worked wrong: instead of ordering best-selling items to boost incomes, the company was stocking low-selling sneakers unable to satisfy the high demand.
Poor analytics was an essential thing to avoid. The new business process automation solution should allow accessing smart insights on demand, managing stock balances, and tracking the inventory's parameters, including expiration dates.
Many companies had an unpleasant experience with the systems that were not scalable enough to boost growth. For example, a couple of years ago, the Revlon cosmetics had integrated a new ERP, which paralyzed its manufacturing facility in North Carolina, resulting in millions of dollars in lost sales. After a merger of Elizabeth Arden, Inc., the incident took place when the company needed to integrate its current infrastructure with one of the purchased company.
The D-Wine management team wanted to grow the business, which meant having multiple stores, restaurants, legal entities. So, the new business process automation application should be growth-ready and provide an opportunity to easily change the corporate structure while being in full compliance with European regulation.
High flexibility for better results
Another example of ERP implementation that leads to not so pleasant results is a story of Leaseplan. The company attempted to create its Core Leasing System (CLS) based on an ERP solution with a monolithic structure. This lead to a lack of flexibility and the business was not able to make incremental product and service improvements. As a result, $100 million of investments were written off.
D-Wine did not have a right for such costly mistakes. The company needed a solution that will be flexible enough to support changes. For example, as the core business deals with wine, it was expected that the number of bottles in stock would increase.
The result: 1C:ERP to the rescue
Andrey Mazurov had extended experience working with 1Ci solutions at his previous companies. He was aware of the high flexibility, scalability, and adaptability of the software. This is why the CFO managed to build the custom solution based on the 1C:ERP.
Business solution implementation allowed the company to collect the critical business data in one system, automate processes to reduce the amount of manual information entry errors, and shift the decision-making from to be more data-driven. The platform is flexible and allows changing everything from UX elements to functionality and adding more servers for higher load. Also, the ERP software system provides enough functionality to serve several legal entities.
The main advantage of 1C:ERP is the correct basis for this system. It is not organized around fancy UX elements, representation of a document, or set of documents. Instead, the platform revolves around transactions, which makes it easier to understand how things work.
Now, the D-Wine company is a rapidly growing business – the number of wine bottles in stock increased from 5,000 to 100,000 of 10,000 labels. The company launched two restaurants and wine supermarkets.