60
Management
By Lekan Oguntoyinbo
Let’s integrate
Centralized systems
squeeze more efficiency
from farm operations
■ For much of the 17 years he has
co-owned the Waterloo, Iowa, farm, where
he grows corn and soybeans and raises
hogs, Blake Hollis and his team kept
information by hand in recordbooks and
in data sheets sometimes stored in tractor
cabs. They typically waited months before
pulling all the information together to get
important data and projections.
Earlier this year, seeking to run a
more efficient business, Hollis invested
in software that created a centralized
method in which all aspects of the
business — purchasing, inventory, sales
and accounting — would communicate
with each other regularly.
Since the implementation, Hollis
says, the transformation of his business
processes has been remarkable.
“It’s allowing us to have a current
grasp and up-to-the-minute information
on inventory and field operations,” says
Hollis, a third-generation farmer whose
farm has 15 full-time equivalent employees.
Fast-paced info
Without good data, “we may
be making purchasing decisions
that are not based on our own
information,” says Iowa farmer
Kyle Mehmen.
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“We’re getting information instantaneously instead of having to wait for
three months. We don’t have a person
sitting at a computer, keying in data
and trying to decipher something that
was written a month ago. The software
has capabilities built into it to help the
operator,” Hollis says.
“We spend less time crunching the
data. It has allowed us to offer more
streamlined information and high-quality
information to our customers off the back
end. Implementing the system has forced
us to rethink our processes and improve
them, keeping a better handle on things
and managing that information on a more
frequent basis.”
In the business world, this centralized
Continued on page 64
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64
Continued from page 60
system is known as integration of procedure.
Manufacturers have used it for decades
but it’s relatively new to agriculture,
particularly to growers of row crops.
“The consolidation that’s taking place
in agriculture is making it a reality,” says
Harold Birch, an IP expert and executive
vice president and founder of the Family
Farms Group, a network of North American
row crop producers and professional
agricultural consultants.
Birch says livestock farmers embraced
integration of procedure earlier than
many of their counterparts in agriculture.
“The pork industry went through that in
the ’90s,” he says. “The poultry industry
already has fully integrated. The dairy
industry has fully integrated systems.”
But he says producers of row crops,
such as corn, soybeans, wheat and cotton,
have been slower to adopt this system in
part because crop farms have been slower
to consolidate.
Old way doesn’t work
Birch notes that historically farming
was based on the sole proprietorship
model, where expenses were sometimes
paid using the family checkbook — and
one or two people did all the work. But
as farms get bigger, he says, running a
business that way simply doesn’t work
as well. And producers who don’t use
integration of procedure will find it
impossible to grow, he claims.
“One person can only do so much,” he
Blake and Sally Hollis, Waterloo, Iowa
says. “As you hire people you have to put
control processes in place, so you know
that you have the same controls as you
did when you were doing it by yourself.”
Eric Jackson, president of agricultural
services at Conservis, a Minneapolisbased company that provides IT business
solutions for farmers, says many of his
clients already have five to 10 systems
that generate data.
“But the systems are data silos that
don’t cooperate with each other,” says
Jackson. Hollis used Jackson’s company
software to make over his farm operations.
“In order for a farmer to take massive
amounts of data and create insights, he
needs a single view.”
Jackson says his company charges
clients on a per acre basis. He won’t
say how much. Birch says expenses for
many farmers who purchase this kind
of technology could run in the tens of
thousands of dollars.
But for the farmer, Jackson says the
rewards can manifest themselves in time
savings, work flow management, and
ability to rapidly pull costs and revenues
together.
Kyle Mehmen, a fifth-generation
farmer in Nashua, Iowa, says he knows
too well the drawbacks of not having a
centralized system.
“Because our information is all in silos,
it takes us longer to get the data,” which
highlighted the need for a centralized
system, says Mehmen, whose farming
operation includes corn, soybeans and
assorted businesses in Nebraska. “We’re
getting to the time of year where we have
to capitalize on early seed discounts, and
we need to finalize that as we’re in harvest.
If we don’t have enough good information
coming, we may be making purchasing
decisions that are not based on our own
information.”
He says he’s working on identifying
a centralized system that would be a fit
for his operations.
But Birch is quick to point out that
merely buying or implementing the system
is not an elixir; you have to master the use
of the system. “The only thing software
does is facilitate more efficiently,” he
says. “If you don’t understand process,
reconciliation or work flow, it doesn’t
help you any.” ff
Oguntoyinbo writes from Columbia, Mo.
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