Case Study: Mondavi refines TeamTrack for SOX compliance

Nestled in the lush, green landscape of wine country, Robert Mondavi’s IT staffers were refining its ERP system when the dark cloud of Sarbanes-Oxley appeared.

The winery initially implemented Serena Software’s TeamTrack management software in 2002 for its business applications group, adding change controls and issue management. “There were a zillion projects going on, particularly on the ERP side,” says Brian Shelden, Mondavi’s director of IT. Data was stored in different places, including e-mail and Excel spreadsheets, so “at the time, we just wanted to keep track of things,” he recalls. In addition, when users requested changes to reports, work orders and other material on its J.D. Edwards’ EnterpriseOne system, the IT staff manually made them.

Shelden and his team targeted TeamTrack for 100 customers in business departments, including finance and distribution, so they would be more involved in the change control process. But these plans all changed.

“We were getting ready to put [TeamTrack] into Round 2, then the auditors showed up, and Sarbanes-Oxley got into high gear,” Shelden recalls. Mondavi looked at open-source type tools to gear up for SOX, but nixed them because they lacked support, according to Shelden.

Extending TeamTrack, which runs on Windows 2000 on a Compaq DL380 server, to its business customers was successful, but growing pains cropped up when it came time to abide by SOX.

A stumbling block included defining business processes through the eyes of the auditors. For example, differences arose around service-level agreements between the winery’s IT staff and auditors. “In an organization as small as ours [did SLAs] logistically make sense?” he says. The next question became defining what action to take when submissions were made, relying on the system to identify what warranted an immediate response. Alerts are sent out if a submission, say a broken printer, isn’t fixed in a designated time. Any issue that occurred to Mondavi family members rated a high priority.

The changes Mondavi made through Sarbanes-Oxley turned out to be good practices the company needed to adopt regardless. “Eighty-five percent of the time they make sense, and the other 15 percent of the time, it’s nonsense,” Shelden says. “You take the good with bad.”

TeamTrack assisted Mondavi in coming up with a better-defined pricing change control. Over the years, the pricing process was “very manual, a hallway-conversation style,” according to Shelden. The problem is pricing in the wine industry is a “pretty crazy thing,” as each state has different prices for such factors as reserves and years.

“The tool…made a given process more livable; there’s 55 prices for any given wine,” Shelden says. TeamTrack manages exceptions, so Mondavi’s policy pricing for each market follows a formula. If a pricing change is made, it’s routed to the brand finance person, who approves it, then several people are notified via e-mail, and the pricing administration group keys the price change in and closes out the ticket.

The winery recently implemented TeamTrack on its help desk, giving access to Mondavi’s internal users who can track problems and verify if they were resolved.

TeamTrack’s audit history set aside any concerns Shelden and his team had with SOX compliance, providing proof that Mondavi’s policies are followed. “I have a high degree of confidence. If Brian Shelden approved this on this date, then it really did [happen],” he says.

Shelden will get another crack at implementing TeamTrack since Mondavi was recently bought by Constellation Brands, a producer of beverage alcohol brands. He says tackling SOX was a “pretty daunting task,” though the key is defining processes and rules.

“You have a tremendous business if you have good process and policies in place,” Shelden says. “The policies are for the users, for the business. If you don’t meet them, you’ve failed.”

Back to feature: Tools to Master the Sarbanes-Oxley Challenge

About the Author

Kathleen Ohlson is senior editor at Application Development Trends magazine.