Management software for business activities are now used in all sectors and are increasingly user-friendly. Thanks to the digital transformation of which they are the spokesperson, farm management software increases productivity in a sustainable way, it enhances and diversifies production planning and finance management. Let’s see together what agricultural software is used for and how it can help the agritech sector.
MANAGEMENT CONTROL FOR SMALL ENTERPRISES
One of the aspects that most interests the entrepreneurs in the agricultural sector is to verify profitability and always try to improve it. So how can you effectively control the technical and administrative management of your company? Certainly, thanks to a well-planned analytical accounting, that enables to evaluate profits.
In Italy, there are many small farms and they should equip themselves with effective internal management control to verify their profitability, by budgeting and the analysis of deviations.
To make a prediction of the economic results it is necessary to be able to predict the revenues, costs, events capable of influencing them and the probability of their occurrence. Moreover, it is also necessary to evaluate the possibility of absorption of the final product in the market. Here’s how to do it:
Furthermore, the budget should foresee continuous future improvements for business efficiency.
After analysing costs and revenues, management control is also exercised by analysing the deviations between budget forecasts and final data. Entrepreneurs must be able to understand the reasons for a certain result and the adequacy of the budget assumptions; therefore, they must explain why a result is lower than expected due to unpredictable events. If it is necessary, they must intervene on time, by eliminating the factors that negatively affected the performance.
It is also true that a better balance of the budget is a positive fact if it was obtained thanks to exceptional and unrepeatable events, but it can mask structural inefficiencies. In this case, it is necessary to analyse it, taking into account the extraordinary events that influenced it, to understand the real profitability of the business.
Monitoring your business to understand its profitability is a requirement for all businesses, even for smaller ones. In fact, the inevitable management control can be carried out in a simple, but still effective way, by drafting the budget and analysing the deviations.
WHAT THE AGRICULTURAL SOFTWARE DO
In particular, agricultural software allows you to:
Among the most important functions of the agricultural ERP software there are:
BUSINESS ACTIVITIES MANAGEMENT
The management of the farm and field activities, and correct agronomic and economic management, determine the sustainability of the farm both from the economic and environmental point of view. The recent paradigm in farm management involves:
Good company management reduces costs and fulfils the various regulations applied to agricultural production, while maintaining high quality and food safety standards for the product. Public administration and consumers have also influenced the agricultural sector by asking for greater quality and sustainability. In addition, the average size of European agricultural enterprises is growing, leading a greater competition.
Technological solutions for agriculture
FAO also talks about the management of agricultural businesses. The control activities allow the identification of weaknesses and more opportunities for the company, while the diagnosis and the solution of any weaknesses within the company are necessary to recognise the technical limits of productivity and business efficiency.
This “diagnosis” phase allows operational improvements and technological transformations. Medium-sized or large farms have difficulty keeping track of information relating to individual cultivation operations, so a searchable storage helps the planning and management of the farm.
By a software for agriculture, companies with many employees in the field and many hectares to manage, can easily keep track of the operations carried out. The agricultural software solutions on the market can transform the agricultural sector thanks to the introduction of high-tech and software and hardware able to solve the main problems of farmers.
A software for the technical and economic management of the farm, for example, can record the interventions and keep the cultivation activities under control, thus simplifying the administrative management of the farm. The reports produced then allow to monitor the profitability of the crops.
CHANGES IN FARMS
The management methods of the farm have changed for 3 reasons: technical progress, the greater dependence between farm and consumer and growing risks. The technical innovations then caused substantial changes of various kinds:
The change in the corporate organisation is linked to the spread of companies and vertical production processes or multilevel companies, which entail changes in the management of the company. With the spread of digital, the strategic objective of management has moved from production to the market.
Another management change is caused by technical risk, that means a limited control of the technologies used in the company, either due to lack of competence or external events that cannot be controlled. This problem can be solved with greater consumer transparency and food safety.
Climate events, market and financial uncertainties are among the causes of risk. Climate risk is increasing, market liberalisation processes turn the market prices changing due to the growing demand. Moreover, there are other factors unrelated to agriculture, such as the price of crude oil, exchange rates, inflationary processes and the volatility of the futures markets. They require forecasts of risk effects on operating results.
Structural changes of farms
The latest structural changes in the agricultural sector confirm the differences between small businesses and medium-large businesses that want to improve their economic and organisational efficiency. The large dimensions, on the other hand, are able to introduce innovations faster, even using information as better as possible. They plan and control accounting, budgeting, results achieved, cost analysis, investment productivity and much more. Thanks to the internet, it is possible to manage online company data, exchange outsourced external services and develop in harmony with the internal and external environment of the company.
Farms in the North
In Italy the enterprises are widespread mainly in the northern area, with 4 homogeneous groups of provinces at different levels of industrialisation:
Business administration and management
The production and evaluation of the results are the responsibility of the company administration and of the agricultural valuations. The administration provides methodologies for the evaluation of economic results through the management, detection and organisation process:
SOFTWARE AND PRECISION AGRICULTURE
Precision agriculture includes applications that enables to increase the yield and quality of agricultural production by using fewer inputs, reducing expenditure items and increasing competitiveness and environmental sustainability. This allows the purchase of agricultural machines, automatic guidance systems, production mapping, variable dosage systems and related software.
Precision technologies allow you to work faster and more efficiently, in support of sustainability that also has positive effects on product traceability.
Precision agriculture, made of sensors, drones, blockchains and many others, is called the 4.0 agriculture revolution. It uses systems capable of detecting various parameters of field production, for example those installed on combine harvesters. Most of the systems that operate in the field of crop analysis and monitoring are certainly composed of drones. Thanks to this technology it is possible to obtain all the data in the field necessary for the management of the soil and plants, to safeguard their health and increase their yield.