IT in agricultural value chain in Norway
Model based analysis of IT support in the
agricultural value chain
By Maria Johnsen
Abstract
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
understanding 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 pilot project for the process improvement
purposes. A non-complex 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.For more information
and receive the complete report, please contact me.
This is a short report about 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 Delivery and the health of the crop.
IT Support
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.
Accounting
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 an 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, these 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:
• Nearly 31% of the farmers (who replied to the 26 questionnaires) use
IT tools but they are not very proficient in it. • Nearly 65% are
comfortable using IT tools and around 54% use them in practice. • 30%
of the farmers produce corn and 38% out of corn producing farmer’s use
IT tools while producing corns. • 58% of the farmers producing plants
use IT. Nearly 77% of the animal producing farmers use IT. • 76% were
men and 24% were women.
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 opposed to experimental
investigation, the results apply to some company’s first layer
infrastructure, which is information and communication technology and
farmers, IT utilizations 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 def.) “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 concurrent 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 chain.
Felleskjøpet provides courses such as electronic learning, filed
injection course ( åkesprøytekurs) 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 should 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 receive 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 geared 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 Felleskjøpet’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),
Storfekjøttkontrollen, 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 evaluate 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 adoption 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. Felleskjøpet, 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. Felleskjøpet 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 evaluation of processes in value chain
To evaluate the reliability of productivity in various departments at
each value chain’s company requires having documentations 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
functionalities 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 desire 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 functionalities in
processes without doing the total change.
One utilized modeling languages in order to show the processes 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:
• Adopting business reengineering
• Finding the real customer’s need
• Tasks should be adding more value in the value chain
• Adjusting processes with business
• Changing fast and directly the processes that need to be altered
• Specifying IT platforms in form of high level
• Identifying the necessary problems which should be changed in the
start phase
• Predicting the outlook of change by doing a simulation
Conclusion
One 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.
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