Extracting Value from Data2 years ago -
A featured segment designed to share business-critical information to seed-selling professionals. Visit SeedWorld.com to download this department and other tools to help you sell seed to farmers.
Are you missing out on profit opportunities?
The old adage of profit being a numbers game is taking a back seat to data. Data drives decisions — at the farm level, at the dealer level and at the corporate level. Through the years, seed dealers and retailers have amassed large amounts of data, whether they know it or not. While it might not be organized or easily searchable, that data may be able to help you better serve existing customers or attract new ones.
Outside of agriculture, some of the best-performing retailers use analytics not just for finance and operational activities, but to boost their competitive advantage on everything from displays to marketing and from customer service to customer experience.
According to Massachusetts Institute of Technology, top-performing organizations are twice as likely to apply analytics to activities. Companies need to know what is happening now and what will likely happen next, and then plan for how to get the best results from those circumstances.
How can you use data to better service existing customers and attract new ones?
While there’s been an enormous push to mine data at the farm level, Michael Gunderson, an associate professor in the Department of Agricultural Economics at Purdue University, says retailers should first dive into their own data to see what opportunities they might be missing.
“Data is intelligence,” says Greg Reisz, owner of the Iowa-based E4 Crop Intelligence. He explains that data (seed variety, acres planted and inventory) leads to information (patterns, increases, decreases and holes), which results in intelligence (understanding key drivers, actions that make sense and issues to anticipate).
“The limiting factor for consultants is often the effort involved to capture, store, analyze and communicate information back to customers,” Reisz says, noting that the relationships between ag retailers and growers are becoming more sophisticated and technology-dependent.
“If you understand what it costs to supply a certain customer, data analysis becomes easy. The challenge is defining a customer.”
— Michael Gunderson
One dominant trend in the retail sector is being able to provide precision ag support to farmers, which comes back to data management.
Reisz’ company offers the E4 platform, which he says has several retailer-friendly features, including the ability to manage numerous growers, generate field-specific variable-rate application instructions and work-order activities.
“Collecting data today is easy,” Reisz says. “The challenge is transforming gigabytes of data into insights you can use. Around here, we call such high-value information ‘crop intelligence.’”
Reisz shares that the E4 platform can help retailers manage business critical components, such as human relations, lender relations, business planning and cash-flow or capital analysis.
Having a good understanding of your data can also help in managing customer relationships, supplier relationships and employee relationships.
Purdue’s Gunderson says for seed dealers and retailers, a good place to start is tracking revenue by customer. “What are the costs of serving that customer?” he asks. “If you understand what it costs to supply a certain customer, data analysis becomes easy. The challenge is defining a customer — is it a farm, a family enterprise, a brother?”
Bruce Erickson, the Purdue agronomy education distance and outreach director, adds that the whole purpose of data management is to extract meaningful information to be applied to current or future decisions. “If there is no opportunity to influence the decision, there is no reason to collect the data.”
Organizing data can help when it comes to making decisions about which genetics or varieties to stock, risk management, fertilizer, crop protection, marketing, finance and equipment.
Steve LaValle, Eric Lesser, Rebecca Shockley, Michael Hopkins and Nina Kruschwitz authored the MIT Sloan Management Review, “Big Data, Analytics and the Path from Insights to Value.” The authors provide five easy-to-remember recommendations to help companies get started and improve their data management:
1. Think big.
2. Start in the middle.
3. Make analytics come alive.
4. Add, don’t detract.
5. Build the parts, plan the whole.
According to the review, businesses should plan to tackle the biggest issues first. The theory here is that the bigger the issue, the more buy-in you’ll get from top management to get involved; however, they caution not to start doing analytics without a strategic business direction.
In getting started, the authors say not to focus so much on all the data, but focus on questions.
“Organizations traditionally are tempted to start by gathering all available data before beginning their analysis,” according to the review. “Too often, this leads to an all-encompassing focus on data management — collecting, cleansing and converting data — that leaves little time, energy or resources to understand its potential uses.
“Instead organizations should start in what might seem like the middle of the process, implementing analytics by first defining the insights and questions needed to meet the big business objective and then identifying those pieces of data needed for answers. The insights delivered through these initial models will help illuminate gaps in the data infrastructure and business processes.”
On the Farm
When it comes to working with farmers, data is the piece of pie that everyone wants. “The ability to link inputs to outcome can add a real value for the farmer,” Gunderson explains, noting that data is just one more tool that can be used to extract that value.
But there’s also been a lot of concern in this area as to who owns the information. Farmers have been protective of their data while companies say the data is needed to continue innovating and deliver better tools to the market.
Gunderson says that for salespeople and technologists working with farmers, they first need to establish a level of trust and build credibility. “It’s incredibly important to respect the privacy of farmers,” he says.
Most recently, a coalition of major farm organizations and agricultural technology providers announced an agreement on data privacy and security principles that will encourage the use and development of a full range of innovative, technology-driven tools and services to boost the productivity, efficiency and profitability of American agriculture.
Supporters of the coalition include the American Farm Bureau Federation, American Soybean Association, Beck’s Hybrids, Dow AgroSciences, DuPont Pioneer, John Deere, National Association of Wheat Growers, National Association of Corn Growers, National Farmers Union, Raven Industries, The Climate Corporation and USA Rice Federation.
“The principles released provide a measure of needed certainty to farmers regarding the protection of their data,” says Bob Stallman, AFBF president. “Farmers using these technology-driven tools will help feed a growing world while also providing quantifiable environmental benefits. These principles are meant to be inclusive and we hope other farm organizations and ATPs join this collaborative effort in promoting farm-level data, as well as educating farmers about this revolutionary technology.
The principles agreed upon by the coalition cover a wide range of issues that must be addressed before most farmers will feel assured to share their private business information with data providers. Topics include: collection, access and control; notification; third-party access and use; transparency and consistency; choice; portability; data availability; market speculation; and liability and security safeguards.
“The principles released provide a measure of needed certainty to farmers regarding the protection of their data.”
— Bob Stallman
For example, when it comes to transparency and consistency, the principle states, “ATPs shall notify farmers about the purposes for which they collect and use farm data. They should provide information about how farmers can contact the ATP with any inquiries or complaints, the types of third parties to which they disclose data, and the choices the ATP offers for limiting its use and disclosure. An ATP’s principles, policies and practices should be transparent and fully consistent with the terms and conditions in their legal contracts. An ATP will not change the customer’s contract without his or her agreement.”
If the data now stored across the planet were printed in books, these books would cover the entire surface of the United States some 52 layers deep, according to the authors of “Big Data: A Revolution That Will Transform How We Live, Work and Think.”
The entire Privacy and Security Principles for Farm Data is available online at fb.org.
Companies are using an array of technologies to provide farmers with precision services. The Climate Corporation is using dozens of public and private models to remotely assess weather, soil and environmental conditions. Additionally it is providing sub field-level agronomic modeling and high-resosolution weather simulations.
And companies are forming new partnerships to help leverage expertise. For instance, DuPont Pioneer and Raven Industries, at the beginning of November, announced a collaboration that will allow for the seamless flow of information generated through the Pioneer Encirca services to Raven Viper and other compatible field computers through Raven’s Slingshot wireless connectivity solution.
“This effort with Raven further advances our whole-farm, brand-neutral services strategy which, with the assistance of Encirca certified services agent, works with growers to analyze and use their data to positively improve their bottom lines,” says Steve Reno, DuPont Pioneer vice president, business director for the U.S. and Canada.
While some companies such as Monsanto, John Deere and DuPont Pioneer have spent millions of dollars on data platforms (information modeling, data acquisition and data analytics), others are cautiously wading into the data waters, but don’t want to be left behind.
Regardless of whether you’re working at the business level or at the farm level, the ability to understand and appreciate the value of data will be pivotal throughout the next decade.
Some experts believe that big-data driven precision agriculture will lead to the next Green Revolution.
To read the full MIT Sloan Management Review, visit ibm.com/smarterplanet/global/files/in_idea_smarter_computing_to_big-data-analytics_and_path_from_insights-to-value.pdf.