Valagro - Case Study
Transforming business planning and analytics: the innovation pathway taken by Valagro
The Company: Sustainable production, research, and innovation at the service of nature
Valagro is a market leader in the production of bio-stimulants and fertilizers. Since being founded in Italy in 1980, Valagro continues to bring the world the same passion for nature that lies at the root of its solutions for plant care and plant nutrition.
Today, the company has the ability to respond globally to specific customer requirements, which reflect new and growing needs against a backdrop of increasingly limited and precious resources. It is for this reason that the Valagro group decided to set itself the challenge of delivering development and wellbeing while using fewer resources and using less land, water, and technical equipment. In other words, producing more and producing better to help meet world demand. To achieve this, the business puts research and innovation at the service of nature, in the knowledge that taking care of the future means working together with respect for the environment and human health.
Valagro covers the worldwide market with an extensive sales and distribution network, and operates through its direct subsidiaries in Italy, Spain, Greece, Mexico, Colombia, Brazil, the United States, the United Kingdom, Norway, France, Turkey, China, and India.
Brief company profile
Main product lines: Biostimulants, micronutrients, and water-soluble fertilizers
Number of product lines: 20+
Countries in which the group operates: 80+
Net revenue: €130+ million
The Challenge: Move beyond the group’s “comfort zone” in order to develop planning capabilities that keep pace with its global growth
The challenge facing the Valagro group lay in reviewing and defining the relationships between strategy and planning (multi-year, annual, and interim) and between the economic, financial, and capital-related aspects of planning.
The solution that Valagro’s management was looking for needed to equip the business with an effective tool for designing a new planning and control model. Like all change processes, this too required a willingness on the part of the company to move out of its comfort zone.
The underlying idea is that a detailed plan without an enterprising business strategy – in other words, one that embraces risk – is certainly safe and more familiar, but inhibits growth and stops businesses competing to the best of their potential. A change of mindset was therefore necessary within the organization, so the company needed a vendor, an analysis and planning product, and a partner capable of supporting, realizing, and promoting this change through agile development, implementation, and delivery.
For a full understanding of the scale of the challenge facing Valagro, it is also worth considering the market in which the company operates and the particular conditions that prompted it to look for a new Business Intelligence and Performance Management tool. This is best summed up by Antonino Volpe, Valagro’s CFO:
“At a certain point in our history, the increasing size and revenues of the organization naturally prompted us to look to international capital markets for financial opportunities that would support the growth potential that we felt both our standard and non-standard lines had. On at least a couple of occasions, however, the right conditions for implementing our planned flotation did not arise. In the meantime, the group continued to grow, as can be seen from the fact that export markets currently account for 88% of our revenues and our scope of consolidation is continuously expanding.”
“Driven by these experiences esperienze – continues Antonino Volpe – between 2014 and 2015 awe decided to upgrade the company’s organizational and IT network, and the technological infrastructure underpinning it. To respond effectively and appropriately to the demands of international capital markets and to excel in a competitive arena, where reactivity and proactivity are a must and where you need to know how to measure and direct performance at a global level, it became essential to put the Controlling Department back at the heart of the business. It was equally important to support it with flexible technological infrastructure that was business-oriented, user-friendly, and capable of ensuring accuracy, completeness, and collaboration, with short deployment times. One solution that we really felt was capable of doing all this was the BOARD decision-making platform, which went on to become the group’s holistic information platform.”
Another key factor in the success of this ambitious project was the company’s alignment with the philosophy of K.Group, BOARD International’s strategic partner responsible for implementing the BOARD solution at Valagro. The technological and functional skills of K.Group, and more specifically their agile design approach aimed at designing the most appropriate solutions in partnership with the customer, have helped speed up the development and release of versions that are closely matched to the continuous evolution of Valagro’s requirements.
The Project: A holistic information platform designed to support decision-making processes
With BOARD, Valagro is able to meet all of its administrative and operational reporting, planning, and forecasting requirements in one solution.
The diagram below shows the distinctive features of the planning model and the dates of their release:
The Planning Model
The BOARD platform was implemented to support all the company’s economic, financial, and capital-related planning for the medium term (three-year plan), short term (annual plan) and very short term (interim forecasting). This interconnection between three-dimensional performance analysis and a range of different reference periods gives rise to the concept of a holistic information network. Furthermore, the planning model is still collaborative, with both Top-Down and Bottom-Up processes, of varying degrees of complexity, and a high level of variability in the number of people involved and the granularity of the information handled.
It is immediately clear that flexibility is one of the system’s strengths and that it maximizes the possibility of alignment and consistency between the strategy (general framework), the high-level objectives of which it comprises, and the underlying operational plans. It also offers the scope to add levels of detail on the basis of the gradual addition of new planning variables, by following an “Adaptive Planning Model” approach.
“We started with the implementation of Top Line planning and analysis models, and gradually refined the KPIs and drivers of strategic planning” - ha affermato Mila Miscia, Controlling Manager di Valagro – “We reread, rewrote, redesigned, and reengineered all our planning processes, from economic budget operational plans up to financial and capital-related plans. We started with an analysis by silos (individual legal entities) until we attained a group-level vision by consolidating the individual plans. It was a bit like taking a large jigsaw puzzle apart and putting it back together again, by looking for the right pieces in an array of micro-puzzles.”