INFORMATION TECHNOLOGY:
CHOOSING THE RIGHT SYSTEMS FOR YOUR
FOOD ENTERPRISE
FSC Webinar September 24, 2014
Saloni Doshi Associate
Denver, CO
Objectives
Lay foundations to help food businesses:
1. Assess their technology needs
2. Structure a search for technology solution(s)
3. Evaluate and select the right technology solution(s)
for their needs
What we’re not doing today:
• Evaluating specific software systems
• Troubleshooting specific challenges
• Discussing how to best work with software provider
2
My background
• Strategy consultant
• Food hub feasibility and business planning
• Technology development strategy
• Technology selection for startups and Fortune 500 companies
• Food entrepreneur, evaluator and user of tech systems
• Researcher of food systems tech landscape
3
My background
What I’m not:
• Technology entrepreneur
• Developer
• Food hub operator or grower
4
Software trajectory
Outsourced
Different solutions for
different needs –
QuickBooks, QB inventory
module, Salesforce,
Wordpress, etc
Single system that addresses
majority of needs across business
– purchasing, inventory, invoicing,
logistics, ecommerce. May have
QB separately.
Strategic
Tactical
In-house system designed to
meet unique model.
Addresses many needs across
business – purchasing,
inventory, invoicing, logistics,
ecommerce.
“Manual” solutions,
often using Microsoft
Office or Google
applications
In-house
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Technology philosophy
• Technology should enable your business strategy – it
is not the solution
• Investments in technology are best made after
strategic and operational foundations of a business
are stable
• Technology should generally be adapted to meet a
business’s processes needs
• Don’t waste time reinventing the wheel
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Selection considerations
Functionality needs
Data ownership
Ease of use
Integration
Pricing structure
Deployment approach
Total cost of ownership
Security and data protection
Platform and architecture
Responsiveness, flexibility
Open source versus closed
Return on investment
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Technology search process
ASSEMBLE
TEAM
Identify expertise
needed
Select individuals
Establish roles
Build process flow
Functional Req’s
Other
requirements
Identify potential
software solutions
Assess features
through meetings,
demos
Consider in-house
development
1
NEEDS
ASSESSMENT,
ROI MODEL
2
BUILD PIPELINE
AND RESEARCH
3
EVALUATE AND
SELECT
Free trial period
Gather feedback
from team
Evaluate ROI
1
Every food business is different
Aggregator and
distributor
Online store
Processor
CSA
Broker
Restaurant
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1
Build process flow - framework
Business overview
Describe your vision and mission, and core operations and revenue streams.
List functions
•
•
•
•
•
•
•
•
•
•
Supply / demand
planning
Supplier
communication
Sales and marketing
Purchasing
Receiving and
inventory
management
Processing and
packing
Order fulfillment
Logistics
Accounting
Food safety
Define process
•
•
•
How is the function executed?
Who is involved in each step?
How is information gathered, used and shared
in each step?
Current technology
•
•
•
What technology solutions are currently
being used to track, use and share data?
What “non tech” solutions are being used?
Who are the users of these solutions?
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1
Process flow example
Preseason crop planning
Identify buyer demands, grower capacity, gaps.
Price list
In-season updates
Weekly updates on
availability
Growers /
Vendors
Purchase order
Based on inventory,
JIT, forecasted sales,
grower supply
Payment &
Reconcile
Product / invoice
Receive / pick-up
product, verify and
sync into inventory
Inventory
Full item list, by
“on order”,
“committed”, “in
stock”,
“backorder”.
Order fulfillment
Pick lists  pack / check
and load orders.
Avail product, price.
Based on grower
supply, inventory
Buyers
Sales order
Delivery / invoice
Routing, record
issues, confirm
receipt
Payment &
Reconcile
Food Hub
Food safety and Recall
Record temps, track inputs to manage recalls.
Maintain all organics certification records.
Accounting / Reporting
Maintain revenue, COGS, SG&A, A/R, A/P, payroll.
Report on financials, sales, inventory, ops, etc.
CRM
Track pipeline, 11
communication, targets
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1
Build requirements list
Business overview
Describe your vision and mission, core operations and revenue streams.
Function Process
•
•
•
How is the
function
executed?
Who is involved
in each step?
How is
information
gathered, used
and shared in
each step?
Current tech
Ideal state
Prioritization
•
- In an ideal world,
how would this step
be automated?
- How would
technology make it
more efficient and
effective?
- Who would be the
primary data
inputters and users?
- How would this
solution benefit
the business?
- How high
priority is tech
for this step?
What is the
“trigger” to
make this high
priority?
- What is the
minimum now?
•
•
What technology
solutions are
currently being
used to track, use
and share data?
What “non tech”
solutions are being
used?
Who are the users
of these solutions?
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2
Features and functionality
TRANSACTIONAL
OVERARCHING
Supplier management
Financial management
Customer management
Reporting
Web exchange
Food safety, traceability
Purchasing
Marketing and branding
Receiving and QA
Business development
Processing
Pre-season crop planning
Inventory management
Systems integration
Order fulfillment, picking
Distribution
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2
Software categories
Category
Description
Traditional
ERP
ERP stands for Enterprise Resource Planning. These are
business management software that collects, stores and
interprets data across many activities (planning,
inventory, processing, marketing, shipping, etc).
Provides an integrated view of core internal business
processes.
Webexchange
Online
Marketplace
Examples
ACCTivate
Blue Ocean Systems
Edible Software
Exact MAX
Famous Software
FoodConnex
NetSuite
Plex
Produce Pro
SAGE
Silver Creek
Systems designed for small to mid-sized food hubs, food Delivery Biz Pro
brokers, and food aggregator/distributors. They uniquely Local Food
Marketplace
offer supplier management, online exchange and
Local Orbit
content management, and customer ordering
functionality.
Ecommerce platform. Website where growers / hubs can
post product and buyers can make purchase. Unlike web
exchange systems, there is one single online
marketplace for transactions, branded by the
technology provider.
FarmLogix
Foodem
iGrowerTrade
Local Dirt
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2
Software categories
Category
Description
Platform to fulfill unique needs of CSAs and CSA food
CSA / group
hubs. Systems allow CSA members to manage
buying
subscriptions, and synchs member info with order
fulfillment / picking and delivery systems.
Systems to support farm planning and management,
Farm Systems such as crop planning, supplies management, cost
tracking, etc.
Systems that specialize in specific functionality
(accounting, traceability, human resources, CRM, etc).
Function
Most are industry agnostic.
Specific
Custom
Solutions
This can include hiring a developer to build your system
or outsourcing development to a contractor. Some
options are open source.
Examples
CSA Ware
Whole Share
Delivery Biz Pro
Ag Squared
Farm Logs
Sure Harvest
ADP
FoodLink
HarvestMark
iTradeNetwork
QuickBooks
Salesforce.com
Food Network
Software
Microsoft GP
FileMaker Pro
Avity
Apache OFBiz
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3
Return on investment evaluation
Common method for evaluating technology decisions is to assess the cost/
benefit of each option through a return on investment (ROI) calculation.
Increase in income / total cost of solution
INCREASE IN INCOME
- Supply growth
- Revenue growth
- Reduce or redirect
labor
- Minimize data
issues
- Meet regulatory
and customer req’s
TOTAL COST OF OWNERSHIP
- Acquisition price
- Ongoing price
Perpetual license
SaaS subscription
Percent of sale
- Other costs: Staff time, hardware
Cost and pricing implications
- Ability to pay
- Impact on cash – early on, long term
- Implications for other investments
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Kathy Nyquist Principal
Chicago, IL
(773) 245-3570
newventureadvisors.net
Saloni Doshi Associate
Denver, CO
(732) 895-2360