As much as the fine wine market was gradually going digital, Covid-19 has made all businesses realise they need to adopt new technology with some urgency if they are to take any advantage of the boom there has been in e-commerce wine sales during lockdown. The pace of change has been so fast that some large wine businesses have been able to implement two year software plans in as little as two months, says Nick Martin, co-founder of Wine Owners, the fine wine sector-specific business software platform. Here he examines what thinking companies should be bringing into their business software investment decision making to improve their back office, business management, and sales.
If you’re manually keying product data and information into a website, tripping over unreconciled stock, using an accounting package to manage your inventory, or simply stuck on spreadsheets it’s time to invest in a computer system that can get your business motoring – but which one to go for? Wine Owners’ Nick Martin has some ideas…
In 2020 what makes a business software system effective? The ERP designs of the last 40 years are no longer fit for purpose, principally due to online being such a big driver of business growth. Business systems need to be more flexible and more connected. Enter the Digital Operating Platform (DOP), composed of integrated solutions on a single platform that provide the platform for a business’s growth – and are flexible enough to respond to new market opportunities and operating models.
But it is an investment you need to get right. What works for one of your competitors might not be the right solution for you. A good place to start is with good, independent advice. One of the best around is Forrester Research, the market research and advisory business, with a strong track record of identifying technology trends.
Before making a decision on your next business system it is well worth while reading its latest report entitled Look Beyond ERP: Introducing The DOP.
The report concludes that:
- Most current ERP aren’t fit for purpose in today’s world where online activity is increasing and a driver of business growth. Traditional ERPs fail to deliver the speed, flexibility, and intelligence necessary for today’s digital era.
- A new breed of ERP dubbed the Digital Operations Platform (DOP) is emerging, typically consisting of a series of integrated solutions.
- Approaches need to be more agile in responding to market opportunity or supporting a new line of business.
So why is it that classic ERP investments underwhelm so frequently?
Poor customer experience capabilities
Whilst the core of an ERP is designed to help a business become more efficient, that is simply the basic cost of market entry in the current state of the world – base competitiveness. ERPs lack the range of solutions that are designed to connect your clients to you. This may include, for example, providing customers with real time access to product and service data that relate to their relationship with you, along with actionable insights that can deepen engagement.
Lack of real time insights that can drive business decisions
This is hardly surprising since ERPs designed for all sectors rely on resellers to localise for a specific segment. Resellers are generally not information providers, and without the ability to intersect market data with a business’s activity data there is no insight. So for instance – a flag in a traditional ERP system indicating that a specific wine stock is not selling is useful, but not informative – informative would be to know that the wine is mis priced due to other less expensive offers in the market, and to calculate what the optimal price and margin should be to sell through. Without additional insights such as these, business decisions become hit and miss or opportunistic.
Drag down the business with unnecessary complexity
Experienced systems architects know that you should ‘develop for the specific with an eye to the generic’. The leading ERPs develop for the generic with an expectation that resellers will be able to adapt common frameworks to make an ERP specific to an industry segment’s purpose. They do, but end up having to build in far too much complexity in order to get there. Have you ever looked at a data input screen and wondered why a third of the fields are irrelevant or confusing? An early adopter of the Hub who migrated from a leading ERP had just that experience and it was a constant frustration. Unsuspecting businesses pay for that complexity twice over: once in a system that costs far too much to implement and maintain, and again in poor productivity hamstrung with illogical or difficult to adapt processes.
Lack of digital agility
When a business gains momentum and starts its growth trajectory, things can move really fast. That’s precisely the moment that a business operating system needs to be sufficiently agile to adapt. For example adding new sales and marketing channels, such as being able to send notifications to targeted customers about new offerings refined by the wines they have bought in the past, or hold today, or their current preferences. New features that enable businesses to create new revenue opportunities and that are integrated from the start.
What does a DOP for fine wine look like?
A DOP should provide the core business functionality of an ERP, and combines that with industry specific content and data standards, integrated key industry relationships, supplier and customer connectivity and enough functionality to enable a wine business to take advantage of market opportunities.
- Data mastering on the core ERP, supported by referential data and associated rich content makes the use of digital sales channels easily manageable to businesses of all sizes. That starts with a robust e-commerce offering. No need to master data in more than one system
- Integration of suppliers expands your sourcing/ inventory bench strength without having to tie up more cash in stock positions
- Integration with sales channels extends your ability to reach consumers and opens up B2B markets
- Integration with other platforms such as Liv-ex for offering, bidding and adding Liv-ex offers to your overall inventory position
- Additional services extend the possibilities for a wine business and make it easier to respond quickly to market opportunity. Additional services create engagement with clients and prompt an increase in spend through up-selling and cross-selling. Services include deeply integrated Webshops, information-rich collection management, private client reserves management, self directed brokerage (including price discovery) and consignment.
- A platform that knows wine data, has matching and migration tools that make data imports easy.
- Referential data and associated content such as key critics/ publisher. Fine wine referential data and embedded LWINs for accuracy and interoperability.
- Nick Martin is chief executive of Wine Owners, an industry-specific provider of Software as a Service (SaaS) platform solutions that are engineered from the ground up for the wine trade. The Hub is the newest platform release that delivers a full DOP; bringing econnecting a business with its customers, suppliers and stocks, buyers and trading partners. For further information https://business.wineowners.com and you contact Nick at email@example.com.