I recently attended the 2023 edition of the International Production & Processing Expo (IPPE) in Atlanta, Georgia, where the international poultry industry meets to interact and do business. After a few years of disruption due to Covid-19, the event was again booming.
Walking through the aisles and talking with friends, one thing that caught my attention was the divergent pace at which the digital transformation has progressed across segments and companies in our industry.
Digital transformation means the process by which companies embed digital and information technologies across their businesses to drive fundamental change. In production industries, such fundamental change can mean multiple changes to the bottom line and securing long term competitiveness.
A closing window of opportunity
Like other agriculture related industries, ours came late to the party compared to finance or consumer services, for instance. Nonetheless, those companies that took the decision to fully incorporate digital technologies into their strategies have started to gain momentum and to leap ahead of competitors that did not.
On the other hand, some companies have started to see that they are lagging and are feeling the pain of losing competitiveness. The good news is that it may not be too late and a new, expanding offering of technologies makes it possible to catch up.
Indeed, many of the current innovations in our industry are being powered by digital applications and big data analytics. Innovations range from automation of plants, logistics and farm management systems to sustainability or health data platforms, all reaching higher levels of sophistication.
The bad news is that the window of opportunity is closing, and a tougher macroeconomic climate makes investment decisions more challenging. Additionally, sustaining the initial learning and cultural transformation can be distracting before the productivity improvements materialize.
Playing the long game
There is a big difference between appearing to digitally transform and truly driving fundamental, long-term change. There is no doubt that having user-friendly apps to manage parts of the business or to interact with customers projects a halo of professionalism and helps support efficiency. However, that does not necessarily mean a fundamental change in value creation.
There are three elements that help to achieve fundamental change: strategy, culture and data integration.
The first is about having clarity on the parts of the business where technology can bring the most value and boost the strategic position of the company and converting that into effective execution.
The second is creating a culture and organizational structure where digital competences are fully embedded in the core knowledge of the business. This is what determines the benefits of such transformation.
It is not simply a matter of bringing more data or IT experts into the company, it is a matter of increasing the overall competence level and augmenting the leverage of the knowledge holders in the organization, with the help of technology and data, to create and deliver value at scale.
Translating expert knowledge into algorithms that can help non-experts or inexperienced team members make decisions, or even fully automatize decisions, is an area where companies can really leverage their strengths to move to the next level.
Third, being able to capture and integrate the data from the entire process, from feed formulation, prices, to animal performance, sustainability metrics or consumer buying behaviors creates a foundation for hypothesis testing, decision making and fundamental optimization at scale.
When data is reliable and accessible, the combination of technology and technical expertise can yield wonderful progress.
The process of digital transformation is unstoppable and accelerating. It is time to rethink what role each of us, as decision makers or technical professionals, will play in it.
