Executive Synthesis Design for a Wine Industry Foresight and Business Intelligence Service 2007

South African Wine Industry Business Foresight Project: Executive Synthesis Design for a Wine Industry Foresight and Business Intelligence Service 2007 PH Spies August 2007 0

Preface The work described in this Executive Synthesis and in two other reports 1 represents the completion of the Wine Industry Foresight (WIF) project - see the project work breakdown sheet ( WBS ) on the next page. The Executive Synthesis provides a design for a wine industry foresight and business intelligence service, including proposals for overall project implementation. Reporting on the progress and activities of the WIF project was done through regular meetings with the Project Review Board and in two interim reports the first in June 2006 and the second in December 2006. The minutes of the meetings (including their PowerPoint presentations) and the two interim reports form part of project outcomes reporting and should be considered in their collective. Terms of Reference Project objectives The objectives of the WIF project as accepted at the first WIF Project Review Board meeting in January 2006 are the following: 1. It must provide support for an adaptable, robust, globally competitive and profitable SA wine industry through industry information management. 2. Industry information management must build an industry alignment - affecting more than 5000 SA wine industry decision makers - around a business logic of competitive market-matched product offerings, and 3. It must also develop the industry structures and processes to support this alignment throughout the wine industry clusters and supply chain from vendors to the farm and cellar and from the vineyard to the table - in an effective and efficient manner. Generally, the objective is to develop with the fullest participation of wine industry stakeholders a practical and desirable wine industry foresight information service, and to specify the industry themes, programmes, processes, practices, attitudes, actions and structures that will ensure the successful implementation of this design. Deliverables: 1. A strategic long term foresight service, Wine Industry Foresight, which covers long term trends and foresight in the global and national business, social, technological, institutional, political and natural resources decision making environments of the South African wine industry. This includes a process to update an annual Wine Industry Foresight publication 2. A supply and demand chain based ICP-system (Information Communication Protocol) that will enhance the awareness of all industry stakeholders with 1 Framework for the Design of a Wine Industry Foresight and Business Intelligence Service with Appendices, August 2007 and ICP-SLA Framework May 2007. 1

respect to their responsibilities in information exchange. A wine industry SLAsystem (Service Level Agreement) that will support the recommended ICPsystem. 3. An IED-system (Information Exchange Development) that will promote foresight and information systems alignment within the South African wine industry. These will aim to align existing information service providers in the wine industry with the industry foresight service Wine industry Futures, with the proposed ICP-SLA systems, to build industry networks that will promote effective information exchange, and to link IED with wine industry education, training and extension processes. 4. An alignment between wine industry stakeholder information needs and the vendors of industry information - including, (inter alia) Winetech, VinPro, SAWIS, WOSA and IT-based management systems - with respect to the above mentioned. Scoping market and industry long term environment Scanning and collating trends and patterns Wine Industry Foresight ICP System SLA System IED System Stakeholder scoping Stakeholder info-designs Info and RTD needs Scope information service providers (ISP) ISP process-designs ISP structure design 1-6 months. Report in June 2006 6-12 months. Report in December 2006 12-18 months. Final report in June 2007 How to Read this Report This report presents a design for the development and implementation of a South African wine industry foresight and business intelligence service. Foresight should be aimed at strategic learning and an adaptable business intelligence service. Such a service must be interactive, which means that its content and application must follow the needs of a transforming, developing wine industry. It is not about building information banks but about building awareness, understanding and insight. Less data may in fact mean better information and better intelligence if the process is managed well. 2

The aim of the report titled: Framework for the Design of a Wine Industry Foresight and Business Intelligence Service, was on developing guiding rules for the design of a foresight and business intelligence capability in the South African wine industry. These rules will be applied in this report. The report covers 3 steps: 1. The Vision for an Ideal Service; 2. Objectives and Functions of the Nexus and Nodes 3. A Design for Implementation This report should be read in conjunction with the Framework for the Design and WIF ICP-SLA reports. 3

Contents Preface 1 The Vision for an Ideal Service 5 o The Requirements 5 o The Ideal 6 Responsibilitie and Functions of the Nexus and Nodes 9 o Cores Structures 9 o Nodal Structures 10 A Design for Implementation 11 o Possible obstructions 11 o Short, medium, long term implementation 12 Appendix I Collaborative Xchange Appendix II Centre for Wine Marketing and Product Development Appendix III Natural Resources Node 4

A Vision for an Ideal Service The Requirements The design for the foresight and business intelligence service should firstly recognize the WIF project requirements and secondly the criteria for such a service that were presented in the Framework for the Design of a Wine Industry Foresight and Business Intelligence Service report. The WIF project requirements for the design are: that it should provide for: 1. A strategic long term foresight service, that can cover long term trends and foresight in the global and national business, social, technological, institutional, political and natural resources decision making environments of the South African wine industry. A process to update an annual Wine Industry Foresight publication was mooted, but in terms of the Framework report this should preferably be an interactive electronic (search engine) service to the industry. 2. A supply and demand chain based ICP-SLA design was presented in another report. The Foresight and Business Intelligence design should be clear on how to integrate the recommendations of the ICP-SLA report. 3. An IED-system (Information Exchange Development) that will promote information systems alignment within the South African wine industry, showing how to build industry networks that will promote effective information exchange, and to link it with wine industry education, training and extension processes. 4. An alignment between wine industry stakeholder information needs and the vendors of industry information. The Framework report provided the following design requirements in terms of its defence of an appropriate approach to foresight and business intelligence development: 1. Such a service must be interactive, which means that its content and application must follow the needs of a transforming, developing wine industry. In this respect the service must be able to lead, and be relevant for, the developmental and transformation needs of the industry i.e., it must be transformational. 2. Information that supports a keen market-directed focus must be more than just a compilation and analysis of market and other statistics. Understanding the context and learning about the processes that drive market and global trade patterns are prerequisites for correct interpretation. A learning design must be integrated with the information design. 3. Competitiveness is essential for survival and it is therefore also essential to develop a monitoring system that can measure the evolving competitive situation of the South African wine industry compared to the rest of the wine producing world - on a yearly basis. 4. A technology monitoring service should be part of wine business intelligence gathering 5. The wine industry is in essence a primary industry which implies that good information on natural resources and environmental trends is important for industry planning and development and also for benchmarking. 5

6. The service must complement alliances and networking: Competitive adaptability implies that at least part of global business strategy will be based on designing (economy of scale enhancing) alliances and networking with others - whether it is in a complementary design of strategic alliances, or whether in the design of cooperative ventures with competitors. 7. Information should support the whole wine industry supply chain. Competition is between supply chains (not firms), i.e., managing the team-effectiveness and efficiency of all players in the chain from the producer to the market (goods, services, information) - and value management of all the players in the demand chain from the market to the producer, are essential for a competitive industry. A general requirement for information systems design is that any new wine industry information service system should not infringe on intellectual property rights in information dissemination, should not centralise all foresight and business intelligence collation activities and should preferably align existing wine industry institutions into the information systems design i.e., rather than creating a totally new structure. It should thus support and improve foresight and business intelligence development in the wine industry by enhancing existing capabilities. The Ideal The ideal is to create a market-directed foresight and business intelligence service that enhances wine industry and wine business competence in specific facets of its market development strategy (see Figure 1) while improving itself continuously through a well designed and co-ordinated industry learning process. Figure 1: Six desirable outcomes of product, service and market development in the South African wine industry 6

The six desirable outcomes for market-matched wine style and service development, as outlined in Figure 1, are universal requirements for market development, well understood and generally accepted in business. The foresight and business intelligence service to support such outcomes must necessarily focus on both managerial ability to identify, in good time, what is required in the market and also managerial ability to plan and implement the product development, production systems and service systems that will enable a wine business to supply to the market what is required, where it is required and when it is required. This is especially crucial for the wine industry where life cycles of more than 20 years (for vineyard and wine cellar development) require that decision makers act with good understanding and foresight and not to react on price swings and good-bad news stories. Development and management of market foresight and production systems thus require short term (e.g., monitoring and traceability), medium term and long term foresight and business intelligence 2. It is just as important to manage the current business well as it is to develop the future business with good foresight. Linked to this are developmental and learning processes to develop decision maker awareness, understanding and insight - and also the capability and competence, to act effectively and efficiently when necessary. First concepts of a design for such an integrated learning system were discussed at a number of PRB and WEIN Committee meetings. It is summarised in Figure 2. Industry Learning Cycle Figure 2: Elements of an interactive learning design for foresight and business intelligence development in the wine industry 2 See Exhibit 1 in the discussion on collaborative information design in the Framework for the Design of a Wine Industry Foresight and Business Intelligence Service 7

Industry leadership and wine business management (including producers) are the receivers of the foresight and business intelligence service. The central information management IT 3 platform, proposed to be established at SAWIS, is the custodian and sender, or provider, of the service Interactive learning for foresight and business intelligence development occurs at two levels. At the outer (conceptual) level learning and development occur between the nodes responsible for researching and developing specific aspects of foresight and business intelligence information, to education, training and extension services. At the implementation (inner) level there is a similar learning process where the quality of service improves the quality of decision making, and the quality of decision making affects the quality of requests for information. Winetech is identified as the SA wine industry institution that logically should be responsible for co-ordinating this process because the activities described here link with (or are logical extensions of) its current programmes. Figure 3 applies this logic in a vision for an integrated foresight and business intelligence service for the South African wine industry. Figure 3: A vision for an integrated foresight and business intelligence system for the South African wine industry Three categories of service providers are identified in Figure 3: 1. The nexus or nerve centre of the service proposed to be established at the location of the current SAWIS library. A nexus is defined as an interactive IT platform for a group of highly connected individuals or entities in diverse locations 3 IT=Information technology. 8

collaborating together towards common objectives. With collaboration is meant IT-based collaboration that is aimed at collaborative learning and information sharing with the help of integrated IT systems. 2. The proposed information service nodes will be institutions or entities: a. with the assigned responsibility to manage specific aspects of wine industry foresight and intelligence development, b. where information and business intelligence on these aspects available at other sources will be networked into the information base of the node, and c. Where information and insights on the relevant subject area will be collated, analysed, transformed into useful information and interactively communicated to the nexus. 3. Information support service providers are entities or institutions that provide (foresight) essential, or at least very useful, specialised information services that are already fully operational in the market (i.e., no conceptual development is necessary) competencies that therefore ought not to be developed from scratch at either the nexus or the nodes of the wine industry s foresight and business intelligence system. Four such service providers are noted: a. WOSA in marketing promotion information; b. Business management systems such as Ezywine, WineMS and Donkerhoek Data, c. Collaborative XChange, specialising in developing information exchange nexuses as a support for what will be required over time at SAWIS, and d. Statistical Analytical System (SAS), a company that specialises in analytical support services for business intelligence development. The objectives and functions of this visualised system are discussed next. Responsibilities and Functions of the Nexus and Nodes For the sake of abbreviation the proposed system will be denoted as SA Wine Business Intelligence (or SA WBI in short). Core structures Two divisional institutions of the South African Wine Council (SAWC), SAWIS and Winetech, should play central roles in the establishment, development and evolution of the proposed SA-WBI. Their proposed responsibilities and functions are as follows: Winetech: o Responsible, firstly, for providing initialising leadership in the structuring of the nodes and their supportive structures and, secondly, for orchestrating co-ordination and interactive learning between the nodes until they are fully functional (later the responsibility for managing ongoing co-ordination may shift to SAWIS); 9

o The functions of Winetech will be to collectively, with the nodes, plan and develop a service design that will allow for eventual self-governance of the node s contribution to the other nodes and to the nexus. SAWIS: o Responsible for establishing the nexus (as defined earlier) o The initial function of SAWIS will be to link with Winetech in the development to manage the nexus (one highly-qualified and experienced IT professional should be appointed to complement the existing personnel at the SAWIS Library ) and to develop the systems to interact effectively with the clients of SA WBI. In order to complement the abovementioned functions of SAWIS it is proposed that it sources specialised services from the following IT information vendors: Collaborative Xchange or similar organisation: Support for the collaborative exchange of information between different participants (clients, nodes, international agencies, etc) in order to improve real-time delivery of data and other information. A design example by Collaborative Xchange, based on the collaborative requirements inherent in ICP-SLA management, is attached (Appendix I). Business information system service providers such as Ezywine and WineMS: Integration with SAWIS s existing information collation activities with producers and cellars (as already initiated) inter alia, utilizing the capabilities by a collaborative exchange capability. Statistical Analytical Systems (SAS): Analytical interpretation business intelligence support at a later stage in the SA WBI development process i.e., only when the client base is sufficiently sophisticated and a demand for this kind of service becomes apparent. Nodal structures The Centre for Wine Marketing and Product Development: Documentation on the establishment of this centre art the University of Stellenbosch is attached. This centre is a crucial component of this design which is a market-directed design (see Appendix II) The natural resources node should be situated at the Department of Agriculture Western Cape, Elsenburg (see Appendix III). Initial focus should be on land and water resources, but issues covering climatic change should be phased in. Winetech should take the responsibility for developing a foresight-directed wine industry technoscan capability. The objective is to link macro technology change with applied technology in the global and South African wine industry. The Institute for Futures Research, University of Stellenbosch, could facilitate in developing such a capability. There is a need for a more contextual scoping and scanning capability in accordance with the proposals in the Framework for Design report. The Institute for Futures Research, University of Stellenbosch should be considered in this respect. Policy impact evaluation should be allocated to the BFAP programme, which is the primary strength of the BFAP model i.e., it is not a forecasting model but can be useful to build scenarios to evaluate the possible implications of, for 10

example, certain industry initiatives, trade developments and government policy shifts. In terms of the principles for transformational information management, as was discussed in the Framework for Design report, it would be necessary to initialise a well-conceived and- designed research programme on decision maker profiling in the wine industry. Such studies could be topics for the technical reports of MBA candidates at the US and UCT Business Schools and perhaps also for Ph.D. Dissertations in Social and Industrial Psychology. Benchmarking and general competitive analysis is essential for planning educational, training and technological development programmes in the wine industry. Such information can make significant contributions to creating awareness, understanding and insight in the wine industry regarding the most important strengths of and obstructions in the industry thus helping to steer policy, development strategy and technology development. However, such benchmarking and competitive analysis must be based on well-conceived and well- designed programme, based on original research on the most relevant parameters for evaluation. Most important, it must cover the full wine industry supply chain and its supportive clusters. VinPro and the Universities should be partners in developing the parameters which can then be contracted out to auditing firms for implementation. The implementation of supply chain and traceability management processes was discussed in the ICP-SLA report. It is suggested that Wine Online should become involved in developing the proposed systems of flow (through-put) management as discussed in the ICP-SLA report - which can then be complemented with collaborative exchange management systems to support systems integration. Implementation The starting point for implementing the SA-WBI design discussed in this and in the other two completion reports (with their appendices) is acceptance. Not only acceptance by the contracting institution (SAWC and Winetech) agency and its committees, but also by the people who will ultimately be responsible for its implementation (as discussed above) and the users of the information - the producers, cellar management, industry leadership, etc. A key aspect of acceptance is the ability to align conceptually with what is proposed. It is therefore necessary to briefly touch on one key conceptual aspect in this design: Transformational information management Possible obstructions Firstly, the SA-WBI design is aimed at transformational information management (see the Meadows hierarchy in the Framework for Design report) and it is therefore primarily aimed at a South African Wine industry that should be not only at the industry as it is now. This could create a conceptual obstruction to implementation because decision makers tend to favour solutions to problems they are facing now rather than emerging problems that could become a major issue some five or 10 years from the present. Therefore, an information service that favours the long term to the exclusion of the 11

problems of the short term does not make practical sense. Any implementation design should accommodate this qualification: There is no long term if you cannot survive the short term. Secondly, there is a conceptual blockage to see the need for something that you do not understand and especially if it is aimed at emerging problems that you are not aware of. This blockage presents a typical hen-and egg dilemma: Where should you start - with extension and education, or with compiling and presenting the evidence to convince decision makers a sort of prophetic act? All evidence suggests that this blockage can only be transcended with the help of far-sighted visionary entrepreneurs. Implementation of something new and exciting, but risky, is an entrepreneurial act. Thirdly, proposals such as the mooted SA-WBI requires co-operation it is an initiative in the commons. For an industry facing a tight-squeeze - an over-supplied market and low profitability a communal spirit is a luxury. Survival is important. The commons is a problem in the best of circumstances because of the free-rider problem under the current circumstances it is even a bigger problem. Lastly, an industry, such as the wine industry, does not exist like a cow. It is a mental construct denoting some or other communality of interests which is often based on the wrong assumptions. You do not have permanent industry interests, only permanent business interests. If the permanent interests of especially powerful business entities deviate from perceived industry interests, the first will dominate. Thus a proposal such as this must make keen business sense. This author believes it does in a far-sighted way because much of what is proposed here is already available in other wine industries of the world. They are our competitors. Short, medium and long term implementation In the Meadows hierarchy ( Framework for Design report) reference was made to a need to manage the present. Nothing that was proposed in this and in the other reports argues that the present information services should be changed. It is for example, in a bulk wine producing industry, such as ours, extremely important to have a good monitoring service for the stocks and flows situation wine stocks, production shifts, new plantings, up-rooting, etc. In fact, this is the rule rather than the exception for all the wine industries of the world. Demand and supply is important. The current SAWIS ( Blue Book ) service should be maintained, and improved where possible. Contained in the in the SA-WBI design are two proposals that can make a contribution: Collaborative exchange designs where the current IT-based management information service providers aggregate their information into the current SAWIS data base, for example. In fact, SAWIS management already initiated some preliminary planning in order to discover what can be gained from such a link-up. Moving beyond supply and demand, the SA-WBI can make an immediate impact on the current marketing needs of producer-controlled wine cellars by focusing its initial attention on strategies for the bulk wine market. An extensive global survey of this author indicated a shortage of information in this respect, and an industry need for a good understanding of this market. 12

A crucial initiative for good market-directed information management is the proposal for establishing a teaching, research and extension Centre for Wine Marketing and Product Development at the University of Stellenbosch. If nothing else is now implemented, the establishment of this centre could become the catalyst out of which the other initiatives in the SA-WBI design can evolve. There is already a wide-spread enthusiasm for the natural resources node at Elsenburg therefore this should also be one of the initiating steps for SA-WBI implementation. Another initiative that could proof to be an exciting kick-start for establishing an interactive IT-based information platform at SAWIS is to develop a Vinipedia in line with highly successful global Wikipedia interactive internet service. This is a learning information search design where the best minds make contributions in specific subject areas. It evolves and improves with the contributions of professionals becoming ever more legitimate as a search engine for initial inquiries. Such a South African Vinipedia could form the basis for a strategic overview service that is always up to date - professional and legitimate. To conclude, in support of the three key initiatives above, the following actions to initiate the SA-WBI programme are proposed: Make a decision and organise and drive commitment to the decision; Install the core structures, as described above; Appoint an IT professional at SAWIS to support its current search engine services and to initiate the Vinipedia ; Initiate training workshops around a PowerPoint presentation on SA Wine Industry futures, involving VinPro and Winetech initially an initial PowerPoint to be provided out of this project; Initiate discussions with Wine Online and Collaborative Xchange; Then plan and install systematically the other actions time will reveal their relevance and need. 13

Appendix I Collaborative Xchange 14

AppendixII The Establishment of a Multidisciplinary Centre for Wine Marketing and Product Development at the Faculty of AgriSciences, University of Stellenbosch BACKGROUND: Next to the technical competencies and ability of the SA wine industry to consistently produce quality wines comes industry competence in finding markets for such wine, in developing and producing wines of quality in terms of market needs and in servicing the target markets effectively and efficiently in the long run. The survival and prosperity of the South African wine industry depend on its international competitiveness in this respect. AIM: To develop and institutionalise a learning and research centre in wine marketing and sales management, wine market and brand development, and product development within the Faculty of AgriSciences at the University of Stellenbosch. COLLABORATING INSTITUTIONS: The School of Marketing, University of Southern Australia (Tony Spawton and Larry Lockshin are the principle contacts) collaboration in teaching and research; WOSA, collaboration in teaching and marketing intelligence, and market information scanning and collation; Within the University of Stellenbosch, multidisciplinary collaboration in research and teaching between the Departments of Viticulture and Oenology, Institute for Wine Biotechnology, Agricultural Economics, Food Science, (all of the Faculty of AgriSciences), and the US Graduate School of Business and Department of Business Management (both from the Faculty of Economic and Management Sciences); Cape Institute for Agricultural Training (Elsenburg), support for training courses in wine marketing and sales management, wine market and brand development, and product development for oenology and viticulture. Winetech, Paarl as the industry node for market-directed R&D. VinPro, Paarl, as the industry institution responsible for the transfer of knowledge and technology to the primary and secondary wine industry. WCSA as possibly the most important stakeholder in developing wine industry competencies in market-directed product and brand development in South Africa. TARGET GROUP AND FOCUS OF COURSE AND RESEARCH PROGRAMME: 15

Table 1 and Figure 1 summarises a possible course and research structure for the proposed (post-graduate) multidisciplinary Centre for Wine Marketing and Product Development. Table 1: Possible structure of training and research programme Target group Activity Expected Outcome Undergraduate course electives in final year. Short courses 1) Winemakers and viticulturists 2) Cellar Masters, and wine industry leadership Undergraduate course electives in final year. Short courses. 3) Wine Traders & Marketers; Training: Masters- and Doctoral degrees on topics covering aspects of the course content as listed below. Research: In marketing practice. 4) Wine supply chain and brand management specialists 5) Wine Marketing Researchers. 6) Wine Industry Researchers covering various aspects of R&D and wine business development. Training: Masters- and Doctoral degrees on topics covering especially (but not exclusively) aspects of supply chain management, brand management, and alliance management (including ICP- SLA management) Training: Masters- and Doctoral degrees on topics covering aspects of the course content as listed below. Research: Market and marketing research Training: Post-graduate course electives on relevant topics covering aspects of the course content as listed below. Research: In specialised fields, not necessarily in wine marketing, per se, but focusing on the interaction between market-directed wine industry R&D and wine industry product and service development. Insight into, understanding of, and basic competencies in supply chain based product and brand development, wine marketing and sales (the right conscience ). Basic competencies in wine business systems management, supply chain based product and brand development, wine marketing and sales management (the right knowledge). Expertise in wine marketing, brand management and sales management. Research results must be strategically significant for the SA wine industry. Expertise in wine market services development and management as an essential part of product development5 Expertise in wine market and marketing research, focus on research methodology Insight into, understanding of, and basic competencies in supply chain based product and brand development, wine marketing and sales 16

11 POSSIBLE CURRICULUM CONTENT: 1. Market research and -development; 2. Market-directed product development; 3. Marketing management, including sales management; 4. Wine tourism and relationship marketing. 5. Brand development and -management; 6. Brand alliance management; 7. Supply- and demand chain management; which includes, 8. ICP-SLA management (Information Communication Protocols and Service Level Agreements). FIRST STEPS: 1. Gain support from the US, wine industry organisations and businesses for this initiative. 2. Establish a Steering Committee of six leading practitioners persons with strong expertise in the related fields - to help with the design of the curriculum, to steer its development and, if feasible, to participate during its initiation as guest lecturers in the course. 3. Find finance to establish a Centre and a Chair in Wine Marketing and Product Development at the University of Stellenbosch. 4. One suggested route for financing such a venture is to establish a Partnership Programme similar Wine Australia s Export Partners programme, or an Associate Programme similar to that of the Institute for Futures Research at the University of Stellenbosch. Such a programme: Is an exclusive sponsorship programme open to all companies who supply finance, feedstock, products and services to the South African Wine Industry; 17

In recognition of the collective interest of the wine industry and its suppliers of finance, feedstock, products and services in a highly profitable, developing and competitive SA wine industry; Focusing on promoting global market development for South African wines, thus enhancing long term wine industry growth and business opportunities in the wine industry Business Plan Aim of the Centre The aim is to establish a learning, research and extension centre whose primary focus will be the integration of wine marketing and sales management; wine product development; and market and brand development in support of especially (but not exclusively) small and medium-sized wine businesses (beginner farmers, wine farms, wine estates, producer cellars, negociants, etc.) in the South African wine industry. It will serve as the central node for market information, market and product research, and professional development for wine marketing in the South African wine industry: From the vineyard through production, wholesaling and retailing, it will provide industry-relevant market directed research, specialised training and extension (industry development) in all aspects of wine market development, product development, wine marketing, sales management and marketing strategy. The Centre will always think and network globally in order to help the South African wine industry to become more effective in wine marketing, product and service development, value chain management and brand development. Service specification of the Centre The Centre s responsibilities will be three-fold: 1. Education, covering both formal programmes (degree- and diploma-driven) and informal programmes (short courses for students and industry stakeholders). 2. Research, covering research for masters and doctoral studies, as well as (ad hoc) specialized contract research for the wine industry which can also support the formal educational programmes of the Centre. 3. Extension, covering the development of a generalised competency in market development and marketing and sales management within the South African wine industry through networking, public lectures, short courses and more focused skill training in various facets of market development, marketing and sales management, product development, value chain and information management (including the various global traceability systems that are now emerging). 18

Professional specification of the Centre The centre will be a trans- and multidisciplinary educational, research and developmental institution. As a trans-disciplinary institution it will strive to build a systemic (holistic) logic of South African wine business development in which: 1. Technological and business facets of wine business management will be integrated into one decision making system; 2. The total supply chain from the vine to the consumer and the demand chain from the consumer and market to the vine will be integrated into one decision making system. As a multidisciplinary institution it will apply the abovementioned systemic (holistic) logic in structuring multidisciplinary programmes and co-operation between participating academic departments and institutes within and outside the University of Stellenbosch. Professional development will cover three broad areas of application: 1. Majors in viticulture and oenology with minors in wine business, wine marketing and product development. 2. Majors in wine business with minors in wine marketing, viticulture and oenology, and product development. 3. Majors in wine marketing and market research with minors in wine business, viticulture and oenology, and product development. The following academic departments at the University of Stellenbosch could contribute to professional development at the Centre: 1. The Department of Viticulture and Oenology; 2. The Institute for Wine Biotechnology; 3. The Department of Food Science, 4. The Department of Agricultural Economics; 5. Department of Business Management (Faculty of Economics and Management Sciences); and 6. The US Graduate School of Business. Institutional specification of the Centre The Centre will be an academic institute of the University of Stellenbosch. Its institutional placement will be within the Faculty of AgriSciences, and as such it will be accountable to, and fall under the academic direction of, the Faculty of AgriSciences and the Dean of AgriSciences. The Centre will be governed by a Board with the following representative structure: 1. The Dean of AgriSciences, or his/her designated representative; 2. Designated representatives from participating Departments/Institutes in the Faculty of AgriSciences; 3. A designated representative from VinPro; 4. A designated representative from WCSA; 5. A designated representative from Winetech; 19

6. A designated representative from SALBA; 7. A designated representative from WOSA; 8. A designated representative from WIDA; 9. The Director of the Centre The Board will meet at least twice a year. A Chair and Secretary of the Board will be elected at an inaugural meeting chaired by the Dean of Agriculture. Organisational specification of the Centre The centre will be directed by a Director with the rank of Professor or Associate Professor. Its initial personnel structure will consist of: 1. A Director; 2. A Senior Researcher; 3. An Administrative Assistant. The Centre s essential organisational form will be that of a network virtual organisation through which the best international and local information and expertise will be utilised in its teaching and extension programmes and research activities. In this the Centre will aim at leading edge application of information and communication technology including distance education and training. Work programme specification The programmes of the Centre will be phased-in during three stages: 1. Short term (first year), first stage: Emphasis on local and global network development, information collation, short courses to under- and post-graduate students, to industry stakeholders and the systematic, step-by-step development of the Centre s services, as specified above; 2. Medium term, second stage: Continuation with and improvement of, the first stage activities plus the initiation of post-graduate teaching and research; 3. Longer term, third stage: Continuation with and improvement of, the first and second stage activities plus the initiation of undergraduate teaching Budget For each of 4 years the following finance will be required (in 2007 Rand): 1. Salary package of Director: R500 000 2. Salary package of Senior Researcher & Administrative Assistant, and general office/administrative costs: R500 000 3. Networking costs, including temporary/guest lecturers, speakers, travel, projects, the collation of (and buying) information from local and international sources: R1 000 000. 20

Appendix III Natural Resources Node SA Wine Industry Foresight (WIF) Project MINUTES Meeting of Practitioners on Wine Regional Natural Resource Definitions and GIS Applications, Carmine Room, Infruitec, Stellenbosch. Monday, 11 May 2007: 10h00 11h30 In attendance: Gerard Martin (Winetech), Convenor Jan Booysen (Winetech) - Ernst le Roux (Distell) Dawid Saayman (Distell) Francois de Villiers (Company of Wine People) Philip Spies (SA Wine Industry Foresight Project) Purpose of the meeting: To discuss specification of commercially relevant requirements for a natural resources information service for the wine industry proposed to be established at the WCDA Recommendations of the meeting: 1. A Wine Regional Natural Resource Definitions and GIS Applications service should be focused on providing support for market-directed wine production, e.g. with the focus on popular basic brand production, or popular premium brand production, or premium brand production, or super premium and icon production. 2. This information service must have the capacity to respond to, and interact effectively with, (commercially-relevant) requests relating to the above i.e., it should not aim at the (ex ante) compilation of an exhaustive information bank without (and outside of) such requests and interactions. This implies the improvement and development of the service over time will be driven by the commercially relevant needs for, and applications from, such a service. 3. The service should aim at collating all relevant information from various Wine Regional Natural Resource Definitions and GIS Applications sources (e.g., 21

consultants, Distell, KWV, VinPro, Government) and a service level agreement on the handling of intellectual property rights in the public (wine industry) domain should support this. 4. The level of aggregation of such information is important. This service should not aim at providing free (business-level) information for each and every individual requesting such information. That should remain the (financial) responsibility of farmers and other wine industry enterprises requesting the information. The service should rather aim at providing the industry information platform and basic natural resources information warehouse that will support easy (and affordable) access and retrieval of information when needed. 5. Soil classification should aim at regional and sub-regional specifications of soil geology and soil form, with the main focus on general wine grape production potential and the buffer qualities of the soils. 6. Water information should focus on rain fall (linked to soil buffer qualities) irrigation potential, water availability and water quality. 7. The development of climatic information should be guided by the existing practices in macro- and meso-terroir specification. Proposal by C Spies to H. Schlöms on Steps to Initialise A Natural Resources Node at the Western Cape Department of Agriculture (In Afrikaans) Follow-up on Pre-planning Discussions Between H. Schlöms (WCDA) and C. Spies (WineMS) Ek sluit in 'n paar voorstelle vir die projek waarmee julle besig is soos belowe. Dankie vir jou tyd 2 weke gelede en die oorsig wat jy aan my gegee het. Met die passie / ondersteuning sowel as die tegnologie tot jou beskikking staan hierdie projek om 'n baie goeie beginpunt. Ek glo wel dat die passie georden moet word sodat die projek op 'n konstruktiewe wyse aangepak sal word. Hierdie vra vir 'n projek plan wat oor 'n tydperk uitgevoer moet word. Soos aan jou verduidelik is die volgende 'n plan wat ek tipies gebruik in my IT wereld om projekte uit te voer. Dit is slegs 'n voorstel maar 'n voorstel wat ek al op baie groot projekte met sukses aangepak het. Stap 1: Bestek Bepaling (scoping) deur "Brainstorming / Navorsing": Hierdie stap sluit in die samestelling van 'n raamwerk / bestek dokument (Engels: "Scope Document") wat alle behoeftes en idees in 'n dokument saamvat, orden en prioritiseer. Dit is 'n werkende dokument wat reg deur die lewensiklus van die projek gebruik word om te verseker dat die projek ooreenstem met oorspronglike en/of nuwe doelwitte behoeftes. Nuwe behoeftes word tipies geidentifiseer na oplossings van oorspronglike behoeftes soos die deelnemers/besluitnemers beter verstaan wat vermag kan word. 22

Stap a) Al die behoeftes en idees reeds bespreek in vorige vergaderings word per lyn geidentifiseer (Die "Tool" wat gebruik kan word hier is 'n Excel dokument (sien aangeheg) ) Stap b) Die behoeftes en idees word georden in logies groepe en subgroepe Stap c) Idees, behoeftes, groepe en subgroepe word geprioritiseer Stap d) Terugvoer vanaf alle "Stakeholders" - Terugvoer sluit in besluitnemings riglyne (bv. indien daar ander idees / behoeftes op die tafel kom hoe dit geprioritiseer moet word) Einde van die fase is waanneer die bestek bespreek en ooreengekom is deur die "Stakeholders" Stap 2: Besigheid Ontwerp / Proof of Concept: Hierdie stap sluit in die omskrywing van elkeen van die behoeftes gebaseer op die prioriteite, die bepaling van teiken datums / projek hersienings datums ens. Dit sluit ook in die "toets" / Proof of concept van tegnologiee beskikbaar en die bepaling van geskikte tegnologiee. Dit is hier belangrik om elke idee reel in detail te omskryf en verduidelik hoe dit aan die behoeftes voldoen. Tipies sal daar heelwat nuwe behoeftes / idees uit hierdie oefening / gesprekke kom wat dan weer binne bostaande (stap 1) groeperings ingevoer moet word. Hier word daar die grootte van implementering bespreek - hoeveel inligting, die grootte van die mark, hoe dikwels inligting benodig sal word ens.. Hierdie stap is 'n baie "Iterative stap" - soos nuwe idees / tegnologie ondersoek word en daar sal dikwels gevoel wees van "nou is ons terug by stap 1" :(... Hierdie is dood normaal en dien as 'n goeie manier van "uitfilter" van oplossings / idees voordat te veel kostes aan implimentering spandeer is. Einde van die fase is waanneer die bestek, beskrywings en plan vir implementering bespreek en goedgekeur is deur die "Stakeholders" Stap 3: Tegniese Ontwerp: Hierdie stap word die modelle vir implementering van besigheids ontwerp bespreek. Finale besluit oor tegnologie word vroeg geneem en die beste argitektuur wat besigheids behoeftes sal kan implementeer binne die tyd raamwerk word ontwerp. Hierdie raak meer IT tegnies in projekte en word daar spesifieke agtergrond benodig wat nie tans binne die huidige projekspan gevind word nie. Stap 4: Ontwikkeling: \Die oplossing word ontwikkel gegewe onder voorwaardes van die besigheid en tegniese ontwerp Stap 5: Alpha: Die oplossing word intern getoets Stap 6: Beta: 23

Die oplossing word deur 'n klein groep buite gebruikers getoets Stap 7: "Launch": Die bedryf kan dit begin gebruik Hierdie is ook 'n sikliese/iteratiewe raamwerk. Stap 1 -> 7 kan 4 weke neem net om iets daar buite te stel sodat die publiek/gebruikers dit kan toets. Afhangende wel van die omvang van die projek is 'n gedetaileerde en goed deurdinkte besigheid en tegniese ontwerp van uiterse belang. Oor die Google Earth tegnologie - dit wat jy sover vir my gewys het het my baie beindruk - ek het self 'n bietjie verder begin kyk daarna en dink daar is ongelooflike moontlikhede met Google Earth wat baie goed kan werk vir wat julle beoog. Ek dink wel dat 'n geordende databasis 'n moet is en dat daar ook 'n tipe stelsel in plek is wat jy kan gebruik om versoeke / idees te bestuur (soos genoem aan jou 'n "Issue Tracker" stelsel). 24