IT support in the agricultural value chain
During the last decade, use of fragmented IT systems and support for agricultural purposes in Norway has increased dramatically. However, very little analytical and empirical research has been carried out to determine current situation of IT in animal and plant production.
The aim of this research was therefore to investigate the effectiveness and functionality of using IT support in agricultural value chain. For this reason one conducted qualitative research study, which was contained the depth interviews and questionnaires in order to map certain actors processes and tasks and their degree of IT utilization. The modeling languages were used to present the IT support in the processes and tasks at the farm and certain companies in the value chain. Results of the assessment showed significant differences between using IT tools in animal and plant production. Presenting the statistics gave a better understandi ng about the correlation between the treatments. However one observed that there is no significant effect of one given variable over the other except in one observed situation that is the degree of experience in IT utilization may help a farmer to get a part time and full time job which adds more value to their income and as a result in the entire chain. Another interesting observation was that senior farmers were more experienced and expert in IT utilization than the younger ones. The various complicated systems appear to be confusing for some farmers. This suggests that the effective utilization of IT support may increase flow of information and knowledge among farmers if they are implemented and tested efficiently with better functionality. One proposed several new mechanisms in certain systems that farmers apply mostly in order to spare their time, add more value to the value chain and users satisfaction. There was also suggested an attempt which may be employed in a pil ot project for the process improvement purposes. A simple system may give the users a better usability and satisfaction in the agricultural sector.
Please note that I have presented IT solutions for software and business process improvement in the value chain. The more detailed analysis will be given upon your request.
This is a short report about my investigation on this problem approach.
Many companies that experience a few negative results do not have a program for controlling risk. Take some Norwegian companies in agricultural value chain as an example. Having conducted many interviews, several uses of IT technology emerged as consistent. Framers in remote locations found the IT programs varied in their usefulness, but all agreed that in the areas of knowledge and efficiency, the technology was preferable to the way things were done in the past.
The breakdown summary concerned four major areas: IT Support, Accounting, Sales and Deliver y and the health of the crop.
All found IT Support helpful and use it frequently. It is faster and easier to track crops and animals, production and sales using various programs. It's also easier to track government regulations, international trends and purchasing.
It was also made clear that these programs should be as simple and user friendly as possible. Their more advanced uses, requiring more knowledge of computers and applications, were almost universally not being used and certainly not being used to the potential envisioned by the programmer.
The farmers interviewed represent a viable random sample. Without exception they preferred to use an outside source for accounting. For many, this was a safeguard to ensure compliance with governmental regulations. For all of them it was simply an area with which they were unfamiliar and therefore not comfortable. Many of them lack the education necessary to use a n IT accounting program and they do not possess sufficient time in which to learn one.
Sales and Delivery
One area where everyone used and greatly appreciated the programs was in sales and delivery. All of the programs afford the farmers the ability to check market conditions to ensure the best price, keep current on trends and even check international trends and markets. This helps boost sales and increase profit. As a side benefit, it helps make decisions that also save in transportation by informing a farmer of the places where the market is saturated and where there is a need. This increases the profit margin all around.
It was also very useful in tracking what items needed to be purchased and to make the necessary purchases. This was seen as one of the most favorable aspects to these programs.
Health of the Crop
With the ability to check current problems and look for solutions quickly and easily, using various IT solutions, th ese programs earned high marks from the farmers. For animal crops, they were able to track diseases and perhaps prevent diseases. It also helped in culling sick animals from a herd.
For plant crops it afforded the ability to use aggressive preventative measures well in advance of destruction. The loss is often incalculable.
In short, all concluded that the basic aspects of IT Technology are helpful while the more advanced applications are not as useful as hoped.
Summary of gathered questionnaires:
o Nearly 31% of the farmers (who replied to the 26 questionnaires) use IT tools but they are not very proficient in it. o Nearly 65% are comfortable using IT tools and around 54% use them in practice. o 30% of the farmers produce corn and 38% out of corn producing farmer's use IT tools while producing corns. o 58% of the farmers producing plants use IT. Nearly 77% of the animal producing farmers use IT. o 76% were men and 24% were wome n.
A farmer in animal and plant production does not use all types of IT tools. That is why they did not answer to some alternative questions connected to various tools. We illustrated graphs for each question and estimated the numbers of replied questions.
In my statistical analysis I attempted to show the results of my investigations. The variables were captured and evaluated against each other. One found that they are related but there is no significant effect of one variable over the other. However in one case I explored that there is a direct relationship between IT utilization and getting a part time or full time job. This may add value not only to farmer's income, but also the entire chain. Another significant finding was that senior farmers are more experienced in using IT support than the younger ones. This helps younger farmers to learn how to apply certain programs properly in order to fulfill the farm tasks.
It is essential to mention that as opp osed to experimental investigation, the results apply to some company's first layer infrastructure, which is information and communication technology and farmers, IT utilization in Norwegian agriculture sector. One may not carefully control the value as it may be done in formal experiment. Thus the results are not generally applicable to a wider range across many organizations in Norway. However the outcome of this investigation may help us to do the analyses in order to explore the systems that have better and less IT support along with improvement possibilities in IT support.
IT Support comparison and their quality in the value chain
Quality is a difficult property to measure, in itself. Since it applies to the eyes of the holder, it is hard to define an absolute measure with which the whole audience may agree. Similarly with value, it depends on whose viewpoint, from which a person is looking, as to what the value may be. For the purposes of this study we will use the International Standard Quality Vocabulary
(ISO 8402-1986) definition:
"The totality of features and characteristics of a product or service that bears on its ability to meet stated or implied needs" (Hofman et. al, 1999)
The purpose of using IT in a value chain is to:
a) Increase efficiency b) Reduce costs c) Provide a functional and efficient communication
One identified some of the actors in an agriculture sector in Norway. These actors have various IT solutions in order to reduce their own costs, have a better communication with their users and improve their efficiency. However, does this contribute to the value chain in a way to produce results along with the complete chain in Norway? The answer is yes. Because some of the actors in meat production, such as Gilde, have a process in which they exchange information about how many animals are slaughtered, frozen or distributed in the year to the market with the other con current actors in the meat industry. The purpose is to maintain the balance in the market. This is a positive property that helps actors add more value in the value chain. One may observe that such positive quality in the Norwegian agriculture market is not practised in some industrial
countries where high and intense competitions are the key factors to increase the capital and the internal quality of production in order to be the best in the market. They try to weaken the other concurrent rivals that have the same production in the market.
Bondelaget has annual meetings to find better ways in order to increase the quality of information and communication. They attempt to find ways for developing better coordination tools in order to make the communication and flow of information easier among farmers, retailers, suppliers and the other actors in the value chain. Such effort will be a great help in increasing the quality of information technology in such a value c hain.
FelleskjÃ¸pet provides courses such as electronic learning, filed injection course ( Ã¥kesprÃ¸ytekurs) and courses for planning the cowshed/cow house for the farmers. The purpose is to aide farmers to increase the production and knowledge in animal and plant manufacturing. The user interface quality of this actor's website due to shared knowledge with the farmers is good. However in their online web site where farmers may log on and purchase a product or surf around, there is a tool that is missing. This tool may be designed to give technical support to the farmers without logging on to their account on the site. It is important for a company to share knowledge and increase the user interface quality. This is one of the factors in common information spaces through formal and informal communication. One observed the same logging function in order to access the information on the other actor's web site, such as previously mentioned, Gilde, Animalia and that they sh ould provide knowledge and information for the farmers on line that requires logging on the website. Would such authenticity be necessary for sharing the information?
Sharing knowledge will increase cognizance among farmers in animal and plant production. This quality of knowledge sharing will add value to the value chain.
Many of the farmers, irrespective of their age, have limited time to spend regularly on the computer for interacting with IT, and limited exposure to IT systems in general. They either work on their farm or are occupied with their part time and full time jobs. For this reason they need easier IT tools in order to use in the farm and better communication with retailers and actors. There is also a need for a decrease in the number of fragmented IT tools and systems. Automating the systems that farmers employ may be a solution to this issue.
Sending the same information to various actors several times year results dissatisfaction. Farmers re ceive a certain schema for example from Mattilsynet or the other actors and must write the same information every time. In such a case it is required to register the general information about each farmer in the database and ask for supplementary information or a change of information to save time and frustration.
One argues further that, if these requirements are not met, much of the advantages of the value chain are lost, as the end-user is not contributing to the expected gains in the business process.
The most significant factors are:
a) A high degree of technical competence of systems support staff b) User's understanding of the system c) Ease of access for users to computing and technical facilities d) User confidence in systems
IT tools utilization measurement
The trend of using the various IT services and tools is progressing in the Norwegian Agricultural sector, especially in the last two decades as this trend has gear ed up. Development of a good deal of software has occurred in order to help farmers to increase production. We measure quality of IT support by analysing inherent characteristics in programs and systems that fulfils the market's demands according to ISO 9000-20001
To measure the effectiveness of IT support in the value chain, we need to design questions and provide the answers in such a way that we may determine if these goals are being met. We determine whether these tools are used effectively by seeing how many users employ such programs.
Usability, degree of complexity & functionality of current tools
Companies have achieved to present the necessary tools and programs on the web sites in order to offer them to the farmers. They have the basic functions in their programs and system. However the quality of communication systems differs from each other. Some companies in the value chain have a better invoicing support system than the other actors . For instance FelleskjÃ¸pet's online order system has a missing SMS system that may simplify the invoicing process through sending the text messaging. However Gilde has fulfilled such a task by providing a text messaging system for making an appointment. Such a function makes it easier for farmers to send and make an appointment by simply using a cell phone.
The accounting programs are meant to simplify the accounting task. However the complexity of the various accounting software make the accounting task difficult for a farmer.
The following table shows an overview of the complexity of using various accounting programs used by farmers in plant and animal production. Those who are able to use the program are shown by "1" and those who do not use the program and believe it is complex are shown as empty space.
As one investigated through various software to explore the functionality of the programs, they all seem to have necessary functions. However the more a program is made secure with more functionality, the more there is complexity in using the program.
From the analysis, it holds those farmers who use more computers with their usage of the planting planners (Fertilizing program), StorfekjÃ¸ttkontrollen, and then their sheep volume increases. However they decrease their usage in some accounting programs, such as Duett, as a farmer gets more familiar with the other programs. As we have the reason is complexity of the programs, another reason is unfamiliarity of rules.
There are also other elements that contribute to the value of IT. A summary of these comments is:
a) In the plant production software planning value is achieved by expediting the slower process of using consultants to advise on planting programs. The consultants are still required in some more complex requirements.
b) The numbers of various software products offered by IT vendors take a lot of time to install, look at, and then try to ev aluate its usefulness. Farmers are reluctant to keep doing it.
c) The amount of time a farmer is prepared to invest in learning a new program is limited, because of their time pressures. Therefore a program with strong introductory and simple installation instructions would do a lot better in the market.
d) It may be argued that there is evidence of value for the farmers if they have adopted the technology. There are factors that determine the likelihood of this adoption shown in the statistical results of the report.
e) The farmers have readily embraced low-level automation, such as farm equipment, and whether the need to have off-farm jobs requires this technology, or off-farm jobs may now be taken. . Having an off-farm job increases the likelihood of a farmer adopting more IT processes in order to manage their farm tasks.
I received few responses from farmers over the age of 58. This means it is difficult to determine if age alone affects the adopt ion of IT.
Improving IT support for the value chain
Farmers require having automated tools that make the IT tools easier. Many of the companies have their automated Enterprise Resource Planning (ERP) systems. FelleskjÃ¸pet, Animalia and Gilde's Slaktweb system, with their assistance provisions and additional training, indicate that farmers feel they need support to help with the adoption of IT in their daily working life.
With only 50% of farmers generally using the Internet to contact with actors, it shows that implementation of many IT value chain processes through this medium needs additional training to assist farmers to make the change to this method of conducting business. While it is very efficient for businesses to offer these services, they will truly achieve those cost savings when more farmers accept this medium of interaction. In fact if companies in the value chain find ways to support the end-users, they stand to add more value in the entire chain.
The coordination tools are various on the websites of some actors. These tools may be email and text messaging. FelleskjÃ¸pet has a habit of attracting farmers and increasing their awareness in some aspects such as production and planning along with providing the goods. Gilde's slaughtering registration processes and farmer's tasks for making appointments for the slaughter have sufficient functionality and usability. That is why 57 to 69% of farmers employ the system more than using the telephone 3, 8% in animal production.
Having the same items and programs for the farm introduced on websites of companies, in order to show farmers how to use the system available as a parallel dialogue while the system is being used, will greatly increase the confidence of the end-user (the farmer) resulting in an increased usage of the system and more widespread efficiency gains from the value chain's business process transformations.
Practical Quality evalua tion of processes in value chain
To evaluate the reliability of productivity in various departments at each value chain's company requires having some documentation from those companies to place a number on their reliability and quality of their products. It will allow us to learn the exact data in order to evaluate and compare results between IT products and software among various companies. Also required is an annual benchmarking report for comparison of IT systems and tools among the various companies. It is also required to measure quality according to ISO certifying. It is proposed that the ISO certifying be evaluated by a neutral position in order to not influence productivity and quality.
It is significant to control the processes by measuring them step by step. Each company in the agricultural value chain needs a constant process improvement by using the quality standard.
One proposes that actors in the agricultural sector apply process dimension in ISO/IEC 155041 in order to to insure the quality of processes in the value chain.
To improve all these processes a company needs to identify their significant problems and possible solutions for processing improvement in order to implement the desired solutions.
The IT companies that provide software for the agriculture sector in Norway need to adopt their IT solutions for improving the programs according to the Norwegian adjustment.
Farmers real need and processes maturity level in the value chain
As we mentioned earlier in this report there are many fragmented systems in the market for helping farmers to perform their daily tasks in the animal and plant production. These programs have almost the same functionality such as reporting, inbox, outbox, calendar and some systems have online coordination tools with the value chain's companies' advisors and consultants. (See the attachment software)
IT companies are aware of the farmer's desi re to use easier products. However developers have more focus on technical aspects of developing such programs instead of concentrating on the real needs of farmers in using software. It is desirable that analysts and designers focus on making integrated packages that contain all these functions and decrease the number of manufacturing various programs in the market. A farmer wants to use a program that helps him to add more value to his products and bring more income to yearly earnings.
Norwegian agriculture's goal for farmers is to increase productivity in plant and animal production and provide healthy food for the market along with adding value to the value chain. The tools that are provided in the market are not utilized as much as expected. The reason is that farmers have a tendency to employ easier programs. For example, the fertilizing program is used a great deal, which proves that the program is user,friendlier than the other programs such as Duett.
Business process improvement in the value chain
It is significant to take the business processes improvement in consideration. The improvement of processes will be cost effective. If a company in the value chain wish to change processes dramatically, they might receive the profit, although the risk is always involved. One may not address these issues directly since one does not have the exact and detailed mapping of each company's processes and tasks in the value chain. However one proposes the improvement attempt for the processes and tasks, which are presented and mapped earlier in this report.
Companies do not need to change the processes dramatically in order to improve business processes. We focus on coordination and communication support in the value chain. As I presented earlier farmers employ various communication tools due to order a product such as grain feed or make an appointment for the slaughtering proposes or sample analysing or delivery. One of such tools is text messaging by mobiles, which may be used effectively. We may apply text messing for ordering or making an appointment. I propose to integrate a certain mechanism in the ordering system in order to ease the flow of information and better communication.
Harmonizing the work processes & IT support
Harmonizing the work processes and IT support plays a significant role in agricultural sector. One presented the present situation in the value chain. It is relevant to explore the right balance in work places and IT usage. It was proposed applying a pilot project for harmonizing the processes for coordinating and communicating purposes among actors in the value chain. However one wish to mention that process improvement may happen through applying various plans in each company in the value chain. We may utilize the right functionality in processes without doing the total change.
One utilized modeling languages in order to show the pro cesses and tasks. We understand each company have their several goals, tools, culture and standardization. Applying merely one modeling language to illustrate these needs may not be applicable for all actors in agricultural sector. We should pay attention how actors operate in each process in order to make the right balance.
The best modeling solution to start the process improvement is to model a process from high level.One proposes to consider the following in harmonizing and process improvement:
o Adopting business reengineering o Finding the real customer's need o Tasks should be adding more value in the value chain o Adjusting processes with business o Changing fast and directly the processes that need to be altered o Specifying IT platforms in form of high level o Identifying the necessary problems which should be changed in the start phase o Predicting the outlook of change by doing a simulation
On e employed the objective and subjective discussion to investigate farmer's work processes and tasks, which are supported by appropriate IT systems. One evaluated and analysed the degree of IT utilization among farmers in agriculture sector and their usability and efficiency. There were presented qualitative research method such as questionnaires and depth interviews with executives and farmers in order to evaluate and analyse the current situation.
In order to have a better environment, the IT tools should be functional and efficient. It also should be available simple and cheap method of communication.
In conclusion, therefore, it is fair to say that farmers will lose focus and interest if a complex application is utilized without safely conducting better implementation and testing on the system's usability, functionality, simplicity and efficiency, then all the effort and workload will not be conducive to bettering the business. This will in the end, lead to a less success, and the value chain will face many challenges.
For future success for data communication among actors in the value chain, constant control and measuring must be maintained, while at the same time, increasing usability with new technologies may only help to improve an already satisfactory system.