Tech buyouts, innovation and corporate world: Case in point Agbiz!

Facebook’s $16 Billion Deal for WhatsApp announcement on Wednesday is sure to light a fire in the belly of every digirati and wannabe tech-entrepreneur. Billion with a B is a lot of money, and at times it feels like we are back to the dot.com hype era, perhaps with a fancy 3.0 moniker. And speaking of money there is a race to keep even our money virtual; Bitcoin anybody? As Brett Scott writes in New Scientist, “Bitcoin has brought with it a dream of an autonomous digital economy, free from corrupt banks and Big Brother governments.”

Reading of all this “innovation” is fun, though one generally moves back from virtual and digital to the reality of business and life. And the business of agriculture – the business of my employer - is perhaps as real as it can get. Even in AgBiz, innovation seems to be springing both serendipitously and also as a process of continuous evolution. A few months ago I was reviewing “Big Data meets big Agribusiness” (link), an example of big dollars chasing big innovation. The recent HBR blog “What Dronesand Crop Dusters Can Teach About Minimum Viable Product” made me reflect on innovation as a process of continuous evolution; bottom-up innovation if you will. Using the example, Steve Blank, highlights a few interesting lessons learnt

• Build continuous customer discovery into your company DNA
• An MVP eliminates parts of your business model that create complexity
• Focus on what provides immediate value for Earlyvangelists
• Add complexity (and additional value) later

Most of us in the corporate world aspire to innovate. Sometimes it is innovating new business models, ways of working or adoption of emerging technologies. In all cases, the end goal is to either impact the top line – increase revenue or growth – or the bottom line; reducing cost, bringing efficiencies etc. And unlike the occasional multi-billion dollar deal for WhatsApp that strikes the Olympic gold by translating virtual ideas and eyeballs to real money, innovation in corporate world is generally unsung and under recognized. Only a few innovations end up as the stuff of folklore either within the company, industry or if really lucky get a mention in a b-school case study.

Which brings us back to this case study on enabling “Precision agriculture.” Technologies, including innovative uses of data and analytics are playing their part but the end goal is the same that generations of farmers, for thousands of years have been struggling with: generating consistently better yield of crops while addressing the risks Mother Nature throws at them.  And if Ashwin's hyper-spectral cameras fitted on crop dusters can help improve yields, we will be moving slightly closer to the utopian goal of feeding the billions of fellow global citizen. Now, this is innovation with a purpose!

Big Data meets big Agribusiness: Monsanto acquires Climate Corporation

Business of Agriculture continues to be dynamic as always; the challenge of feeding a growing world population, coupled with managing global supply chain, geopolitics and of course trying to cope with the biggest challenge of them all: Mother Nature's upper hand. 

Just following Mother Nature’s mood swings requires enormous data crunching, analytics, use of communication networks, satellites, drones and newer tools and technologies. And here I am just talking of Information Technology and not the product “Technology” that enables the agribusiness industry (pesticides, herbicides, genetic seeds, traits etc etc).  

I came across an announcement yesterday by Monsanto that it was acquiring a big-data technology firm, Climate Corporation, for approximately $1.1 billion (link). I think it is a fascinating opportunity if done right, and if taken to farmers around the globe. Of course, Monsanto is not alone in the quest to integrate lego blocks of agribiz puzzle together; Another large agbiz firm, Syngenta* recently announced “The Good Growth Plan”

The reality is that most small hold farmers, especially those in developing nations have very little access to tools and technologies that enable “modern agriculture” practices. There again, lack of modern technology may be an opportunity in disguise. Case in point, the wireless telecommunication revolution in India that helped the country beleaguered by lack of traditional telephone lines leapfrog directly to modern cellphone age.  Wonder if access to insights enabled by digital farming technology and tools - big-data enabler in the example above – do the same for the small farmer in rural India, or sub-Saharan Africa?

*Opinions on this blog are mine alone and not that of my employer

Links:

• Image mashup from : "India still out of the Net" BusinessLine,  India strives to become 'drought proof' (The Guardian),  India to Triple Number of Farmers Using Mobile Phones to Get Weather and Market Data (CGIAR Research Program on Climate Change) 
• Monsanto's Billion-Dollar Bet Brings Big Data to the Farm - Businessweek
• Monsanto Buys Climate Corp For $930 Million - Forbes

• Why Big Ag Likes Big Data -New York Times (blog)
• Musing on Agribusiness, Modern Agriculture and Enterprise Architecture (my earlier blog post)

Musing on Agribusiness, Modern Agriculture and Enterprise Architecture

Friends, peers and former colleagues occasionally ask me what I do for a living and when I say Enterprise Architect, they raise they eyebrows. And when I say an EA for a multinational agribusiness firm, eyes begin to glaze over.
My journey into the complex and fascinating business of modern agriculture started a little more than a year-and-half ago when I took on a role of Enterprise Architect with a multinational Agribusiness company. In my previous consultant roles, I was well aware of the intricacies of EA, trained and certified in one of the popular methodologies used in the industry (TOGAF). In a sense, I had a broad understanding of the practice and application of EA. I was, however, removed from the intricacies of the business of my employer, agribusiness.

Learning about the “business” is critical for Enterprise Architects given the role we play in bridging the IT-business divide. It also helps that my employer prods employees to gain insights on our business of Modern Agriculture. One such recent program was the campaign to complete the Masters of Modern Agriculture through CLA, which prompted me to reflect on my journey thus far.

As is to be expected, many executives and business and functional leaders here have a farming or agriculture background. One could argue many of us – even urbane city dwellers - are not too far removed from agriculture perhaps with just one or two degrees of separation from agriculture.

Think of farmers and farming and one might visualize the quaint old man in a turban in a paddy field in India or the frail farmer tilling a dry plot of land in sub-Saharan Africa or the tall guy in wrangler jeans and cowboy hat standing next to a lush corn field somewhere in Iowa or Mid-western United States. Though I grew up an urban kid, and mostly lived in larger metros in India, my link to agriculture in childhood began when we would visit my dad’s ancestral town in Tamil Nadu for summer vacations, a trip that would include trek to the lush paddy fields that his brother and extended family managed. Family discussions during such get-together would revolve around vagaries of nature, monsoon, labor shortage and the like, though I recall very little discussions on agronomy or the business of modern agriculture as western farmers know it.

That image of farmer extended to that of a “grower” after I joined my employer. Perhaps because farming and agriculture is a vocation, engaging with Mother Nature. And for most, if not all farmers, even for subsistence farmers, growing is a “business.” Even subsistence farmers aspire to eke out a bit more out of the land that they can barter for other life’s necessities.

Farming: Business, government and society

Policy makers and governments around the globe struggle with “food security” issue, feeding 7-8 billion people with limited resources that Mother Nature provides. Some of the answers lie in the judicious use of science and technology to aid modern agriculture including use of “sustainable agriculture” techniques, chemicals – fertilizers, pesticides, herbicides – and genetically modified and hybrid variety seeds that can ensure greater, consistent crop yields on limited land and resources available for agriculture. And this is where the business of agriculture step in.

Agri-business value chain is complex, and includes “input companies,” like my employer that are engaged in the business of research, manufacture and supply of crop-protection chemicals – pesticides, herbicides, insecticides, fungicides - as well as biotechnology products, seeds including genetically modified, specialty breeding etc etc. Though this could be lifted out of a ag-biz promotional brochure, the goal is simple:

• Maximize yield for the grower and minimize risk of loss from pests, weeds etc 
• Enable sustainable farming with minimum resources – land, water, labor etc – at our disposal

All this to what end? Feeding the ever growing human population. And what you won’t always see in agbiz brochures is the increasing theme of enabling sustainable bio energy, ethanol and bio fuels!
Farming and Technologies

Twenty-first century agriculture is much more sophisticated and technology driven than most of us realize. On one hand we have large industrial scale mega-farms that use of GPS, automated Chemigation and irrigation systems, water pivots, genetically modified and hybrid variety seeds, sensors and drones and satellite images to monitor crops. On the other hand, we also have small subsistence farms like those prevalent in much of Asia and Africa where millions of farmers subsist on extremely small land holding. And in between the two extreme, we have all varieties of farmers including Ogranic farms, serving niche markets.

Enterprise Architects multinational agri-business firms, just like our peers in other businesses have to continue to focus on BDAT dimensions with the firm goal of aligning IS investments with business drivers. A sampling of architecturally significant use cases:

• Supply chain: complex forecasting, demand planning manufacture, production, distribution of seeds and chemical products. Of course, some of this has an added business twist. The production of parent seeds is also impacted to a large extent by the issues our growers face: vagaries of Mother Nature. The supply chain of agro-chemicals is highly regulated by federal, state and local authorities, with an increasing focus on security. 
• Partner integration: An agbiz company like most large multinationals has to integrate with partners, suppliers, vendors and others to ensure seamless interchange of data and information. 
• Enabling Research and Development (R&D): In this business, a new product can take nearly 10 years from ideation in research to getting to market with a series of complex steps in between. Emerging technologies including analytics, big data management, high performance compute are increasingly being adopted to enable accurate, faster time to market. 
• Thinking of future of farming includes scanning horizon to bring in newer technologies. This includes enabling complex agronomics enabled by timely information and data. Emerging thinking includes Digital Farming, Precision Agriculture, use of GPS, satellites and drones – enabling “use” of data. All of it targeted to provide actionable insights to end users, (in this case) here the grower.

Just my two cents and by no means a comprehensive list of the critical role of Information Technology plays in managing the complexities of agribusiness. And somewhere there comes to critical task of defining the blueprint for Enterprise Architecture that streamlines the process of bringing new techniques to the vocation of agriculture.

Links of interest

• A good overview on agribusiness “The agricultural and food value chain - Entering a new era of cooperation - KPMG Analysis
• Interesting perspectives on GMO A Race to Save the Orange by Altering Its DNA - New York Times
• Debate on Modern Agriculture “Would Americans Be Better Off Eating a Mostly Organic Diet?” - Wall Street Journal
• Tell me more: Overview of modern agriculture from Crop life america
• Farm Forward - Interseting Youtube video from John Deer 
• Syngenta's new greenhouse brings climates of the world to RTP - news and observer
• Case study: Enterprise architecture at Syngenta - Computer Weekly
• How B.I. and Data Make a More Efficient Farm - Slashdot blog
• How Monsanto Is Expanding Its Footprint Through Data Analytics - Slashdot blog 
• Book reviews from my recent reading list  - An Economist Gets Lunch: New Rules for Everyday Foodies by Tyler Cowen (My review on Amazon) and Harvest: An Adventure into the Heart of America's Family Farms (P.S.) by Richard Horan (My review on Amazon)

Review of a foodie's views on agribusiness: “An Economist Gets Lunch”

Tyler Cowen’s book “An Economist Gets Lunch” was added to my 2012 Christmas reading list for one simple reason: I have been trying to keep updated on agribusiness, given my role of an Enterprise Architect working with a multinational agribusiness fierm. Here is my initial reaction on the book.

The book covers two topics. It is predominantly a foodie’s observations of “finding good places to eat” while traveling, interspersed with tips on cooking at home. The secondary topic is a brief discourse on agri-business which is restricted to two chapters (#7 and  #8).

The first section of the book reaffirmed my empirical observation from travels across continents: how a variety of meats and fish feature predominantly in menus around the world. Restaurants in most western metropolises’ have begun to offer at least a few vegetarian friendly entrée, but still cater to diets that are largely meat based. As the author observes, many meat by-products – e.g lard – are also used for cooking “vegetarian” entrée.  The vegetarian in me found the descriptions of the techniques of barbeque and the like inscrutable but I still found the narrative gripping enough to read through those sections.

In the brief analysis of agri-business, Cowen makes a few arguments on spreading modern agribusiness to more parts of the world. He observes “For all the talk about India as a great economic power on the rise, most Indian farming is still done by hand on a small scale. … The result of all these restrictions is that agriculture remains the most backward major sector of India’s economy and the rate of investment in Indian agriculture is barely increasing.” While making the argument, the  author contrasts by giving high points to Mexican agribusiness when he muses :

“What are the real reasons why Mexican food can be so much better in Mexico than in United States? I think of Mexico as a country that straddles two food worlds in a very advantageous manner. They have enough technology and modernity to manage modern food supply networks, run good restaurants, and send fair amount of diversity the way of everyday foodie. At the same time, Mexico still is in the close touch with more artisanal methods of food production. The country has agribusiness, but it doesn’t only have agribusiness. “

The right-leaning economist in Mr. Cowen also hypothesizes on benefits of genetically modifying crops, observing how corn did not originally appear in nature without human intervention: “the breeding of corn occurred over generations and from genetic tests it is identified as coming 8,990 and 8,610 years before birth of Christ.” A gist of the author’s arguments

·         GMOs increase the supply of food, thereby lowering food prices and feeding the poor

·         One of the next green revolutions may come from the direction of what are called Genetically Modified Organisms (GMOs).  

·         The underreported story that GMOs have considerable environmental benefits is overlooked.

·         GMOs may help limit global warming through other advances

·         Rich countries do not need GMOs but poor countries do

I have been following some of the arguments on global food-security and also the role of multinational agribusiness firms in “feeding the world” And most of the arguments, when one looks at from a rational economic angle make sense. However, what is intriguing is that most discussions on food and food security focus more on crops and grains and to a much lesser extent on animals and poultry. The fact is that food-grains are just another, albeit significant “ingredient” in meat production: After all, animal meat, poultry and fish are the last leg in the “feeding the world” value chain?

Other interesting reviews of the book:

• NYT: A Contrarian Chowhound Weighs In
• USA Today: 'An Economist Gets Lunch' offers new perspectives
• WSJ: Invisible Hand to Mouth
• Boston Globe review