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Wine is made (also) with algorithms

The Banfi winery needed to integrate the information available. So it focused on a real-time reporting and control system, with advantages for financial planning and credit management

Interview with Gabriele Mazzi, CFO and CIO of Banfi

Credit: Gabriele Perrone, redazione Sistemi&Impresa, September 2020


 

The richness of the nature of the soil and the privileged microclimatic position make Brunello di Montalcino one of the jewels of Italian wine production. We are among the hills of the province of Siena, in Tuscany, where in 1978 the Italian-American brothers John and Harry Mariani created Banfi, a winery of excellence in the production of this wine. Not only that: the winemaking activity is accompanied by the hotel and hospitality business of Castello Banfi - Il Borgo, at the Castello di Poggio alle Mura, also in Montalcino. The world of wine is usually conservative, in the sense that it has longer business transformation times than other sectors, precisely because it follows the rhythms of nature. But a company that serves 94 markets around the world and has such an extensive partner ecosystem as Banfi understands how digitalization is necessary in this system too, especially for the economic solidity of the company. For this reason, for over 40 years the Tuscan winery has combined the winemaking tradition with the innovation of mechanisms and work processes. In a sector like the agricultural one, strictly dependent on external factors, the ability to forecast and analyze is fundamental. This is even more true in light of the uncertainty generated by the covid-19 pandemic which makes these activities even more important, capable of 'reading' the future and acting to anticipate changes. “Today it is increasingly necessary to work on the quality control of the information present within company databases”, explains Gabriele Mazzi, Chief Financial Officer (CFO) and Chief Information Officer (CIO) of Banfi. “A critical factor for us has always been to understand as soon as possible how we can integrate the enormous existing database into our systems”. To meet this need, since 2014 Banfi has relied on Hubble, produced and distributed by Insightsoftware and present in our country since 2012 through Insightsoftware.com Italia, as a real-time operational reporting system specific for Enterprise resource planning (ERP) of Oracle (JD Edwards, E-Business suite and ERP Cloud). The two macro areas of intervention were: financial planning and cash flow with Hubble by Insightsoftware, in concert with the software house Piteco; credit management with integration of Cerved data (external to the company ERP). The latter have been unified with the company ones and made available through Hubble, making it possible to predict credit trends, manage commercial relationships and intervene promptly to support suppliers and customers, so as to "extend the strength of agency"



Control of the variables that lead to the result

The use of algorithms and variables allows you to transfer information and carry out best and worst scenario analyzes for areas such as credit and debt, which are critical in this delicate historical period, but also for integration of the different departments of the company. By receiving a 'clusterisation' of customers and suppliers from the system, "we can apply algorithms to better manage credit based on the situations of our interlocutors", says Mazzi, who in his dual role oversees both the financial and IT areas, a symptom of the The importance of the link between information and business according to Banfi's vision. From economic planning we then tried to move on to the integration of the various functions within the company to create "a common corporate culture of data". For the Tuscan winery, the advantages of the partnership with Insightsoftware do not just stop at financial planning and credit management. “Every evolutionary request and every proposal put on the table has always been taken care of with enthusiasm. We have also obtained a competitive advantage in terms of awareness of integration of thought and fluidity of planning", states the CFO and CIO, underlining the importance of "controlling not so much the result, but the variables that determine it". The next step achieved was to go beyond the boundaries of the company and the data of the ERP system, integrating the different company functions. In this uncertain period for all companies, having what Mazzi defines as "serenity of analysis" is very important to face new scenarios. The transition is from forecasting to foresight: from forecasts based on historical data to a vision capable of anticipating changes. For example, today Banfi is already able to precisely estimate the amount of payments just three months later and has already forecast 2020 revenues in relation to scenarios linked to covid-19. This leads to achieving business sustainability which is accompanied by environmental sustainability (among other things, the company also relies on the data processed by Hubble to prepare its sustainability report)


Value-added reporting

Hubble is a real-time, self-service reporting, planning and analytics tool on Oracle ERP (JD Edwards, E-Business Suite, ERP Cloud). It connects directly to all ERP data respecting its structure, tables, security and the user is faced with an intuitive tool with content relevant to their daily activity. Creating reports is a matter of minutes and without tackling any technical project. The tool also offers Analytics for tabular representations and graphical displays and Budget & Planning for managing the financial budget and operational planning, also useful for month-end management activities and for the creation and maintenance of a management control system designed and managed directly by the users themselves with access to all ERP data



Real-time data processing

Carrying out a precise revenue forecast and keeping spending under control are two possible actions thanks to technology that allows a different approach to the wine business, usually 'archaic' on the digital front. Banfi also uses Hubble to manage reports from the hospitality area, thus keeping the situation of the hotel, restaurant and wine shop under control and integrating the data from the hospitality business with that from the winery: “We wanted to think like a company that used a 'dictionary 'unique: with Hubble we have found not only a technical tool, but also a system capable of making us speak a common language." From a more practical point of view, an important advantage is the real-time processing of data, with immediate updates which are fundamental for speeding up some procedures. “Real-time information has now become a crucial part of the decision-making process,” says Mazzi. “In this way we can feel adequate to reality and we can have a consistency of information available to us that we have never had before.” Furthermore, the tool is managed directly by users who have previously received special training from Insightsoftware experts, who "have always made the technologies available and taught how to use the systems in a four-handed process" with the colleagues from Banfi. Finally, the monthly flash report allows you to provide company management, from the United States to Italy, with fast and precise information regarding the Key Performance Indicators (KPIs) on each company area (Finance, Logistics, Commercial, Production, etc.) . “This way we can quickly tell the respective managers what is happening in the various departments. Thus, in addition to the tax aspects, we are moving towards an evolution of the Finance area at a consultancy level understood as Knowledge management, i.e. a more in-depth knowledge of the processes in relation to company objectives". Going beyond the ERP data and beyond the company's limits, giving an advanced analysis capacity to the information collected, integrating the different company functions and increasing the quality of the decision-making process represent the great successes achieved by Banfi's innovation path. All this goes in the direction traced at the end of the 70s by the two Mariani brothers when they founded the company envisaging a large-scale project that would integrate traditional, high-quality wine production with a modern and innovative cellar.

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