Nutreco – Using digital to make agriculture and farming more sustainable

SUMMARY:

Chief Information Officer Henry van den Ven is hoping Nutreco can provide farmers insights to better manage the lifecycle of animals.

Nutreco is a €6 billion company that operates in the animal and aqua feed industry. It’s CIO Henry van den Ven has been undertaking multiple projects to help the business standardise on its back-end systems, as well as introduce digital projects that allow for better customer engagement with farmers.

However, the end goal is for Nutreco to using new digital tools and data to create a more sustainable planet, through more intelligent farming. I got the chance to sit down with van de Ven at Infor’s recent customer event in New York, where he explained that it was this agenda that drew him to the job. He said:

My background is business economics, so I’m not a technology guy, but I’ve had more than 25 years in leading positions in the IT industry. But I was intrigued by the Nutreco strategy to – play an important role in the society problem – which is that the population of this earth is growing. And if we don’t change the way we do agriculture, we would need two planets by 2050. T

The trick of the discussion is to do agricultural more intelligently. Or make it more productive for the industry. The feeding industry, and the knowledge, the growth patterns based on nutritional values in a product, as well as translating to economical models for farmers, that’s our position. I was intrigued by that vision and strategy – our vision is feeding the future.

However, before Nutrecto could embark on this digitisation process, it needed to fix its back-end systems, which had become incredibly fragmented over the years, thanks to the company being globally spread and having grown through a number of acquisitions. It decided to standardise on a single ERP platform, for which it chose Infor. Van de Ven said:

From this acquisition process we are really fragmented. They acquired me as a serious step into further globalising and as CIO the first few years I focused on the IT foundation. That may be less interesting, but if it doesn’t work, you have a problem.

I have been lead for the Unite programme, which is a business harmonisation project. Or if I simplify it, it’s about one ERP, which is where Infor comes in. We already had units in Scandinavia using Lawson, which was acquired by Infor. So there was already a bit of a footprint. When we created this Unite programme to standardise globally, we came back to them. We became a more strategic client for them.

Building on new foundations

However, now this “business foundation” is in place, van den Ven is focusing on the customer engagement on the front-end and is also looking at how Nutreco can address the sustainability pledge using data and analytics. Van de Ven said:

I’m now more on the next phase, which is to be the digital lead and coordinator for Nutreco. In that role we are making steps into the digitisation world. We are doing activities with creating value around our knowledge, with models that are further enriched with big data, data science, analytics, which comes from sensors.

Nutreco has started on this path by creating a prototype of an integrated customer experience platform, which it has built with Infor’s design agency Hook & Loop. An example of how Nutreco is using data analytics to create new offerings for customers can be seen in its Ecuadorian shrimp feed business. Van de Ven explained:

We learnt that shrimp make noise when they are hungry. With putting sensors in the ponds, you could understand when they needed to fed. Although, in the early days the sound the shrimp makes, for the sensor, was sounding the same as the sound of when the rain drops on the pond. So when it started raining, the feeding machine started to feed and it wasn’t working out. So we tuned the sensor better and now it’s about feeding them when they’re hungry.

Sometimes you say you are hungry, but you’re not really. So if you can further nuance that with business goals like the mortality of the shrimp during the growth process. So if we can lower the mortality rate, in terms of fish sustainability, you can do the right thing. If you can further balance this feeding process, animals die less.

The other story is that if you optimise the lifecycle of the shrimp, reducing the optimum life span of a shrimp from four to three months, this means having four cycles in a year, instead of three. Can you imagine what that means for the farmer? That’s all brought by digital insights.

Inevitably, shifting from selling feed to selling insights around how the feed could be used to improve the performance of farmers means creating new business models for Nutreco. We have seen how this has been done in other companies that are moving from selling products to selling services – for examples, see Phillips and Bosch.

However, van de Ven has doubts about whether Nutreco could become a full-scale platform for the industry in the same way some of the other ‘servitization giants’ are doing. He said:

You could start to become a data platform provider. Phillips is one of them. IBM is doing it too. What they try to do is that they try to be the platform for everybody and sell subscriptions to people that want to do something with the data. We have been questioning [if we could do this] in the fish industry, up to the retail industry with the land fertilisers, and everything in between – that’s a long chain and fairly fragmented. So it’s difficult to find an easy lead for that one.

We have been considering, should we take a lead? Our current strategy is that we have several initiatives in certain countries. But we don’t think we are big enough and not important enough to shape the industry or that part of the industry ourselves, globally.

Future investments

Nutreco is now also considering what future investments it could make in the future to enhance its digital capabilities – most notably around cloud and artificial intelligence, in particular when looking at its Infor platform. Van de Ven said that the company is considering shifting its ERP to the cloud, but is still looking at how it can make the business case work. He said:

For me, cloud is not a goal, but a means. Too much is pushed that it’s a goal in itself, which I’m a bit resistant too. A bit of disappointment in that area is that not often the business case is the driver in that area. If it would save costs for people like us, it would be an easier discussion. Sometimes you need to add costs.

The business case isn’t tangible enough for me. I challenge the guys here [at Infor] to make it more favourable for us. But the core reason for us would be this digitisation, to be faster with connecting the back-end world to the front-end world. I think we can become internally more of a driver of fast innovation for our future. That would be the driver.

Equally, off the back of Infor announcing its AI Coleman platform, van de Ven is interested in the opportunities it could hold. However, he also wants to see really evidence of it working, rather than just the top-level announcements. He said:

We are interested in artificial intelligence, for sure. It’s right for Infor to bet on it. But my experience is that what they present here, as is the case with other vendors, if I go home and go to my local sales person and ask to test it – first of all they don’t know and don’t understand it. But also it’s not always there. It tends to be an announcement of a vision. However, I think that the team at Infor is visionary and strong. And they are strong in can-do and customer focus.

Image credit - Images free for commercial use

Disclosure - Infor is a diginomica premier partner at time of writing.

    Leave a Reply

    Your email address will not be published. Required fields are marked *