Digitization of the agri-sector in action: what increases efficiency and profitability?

How does a young IT-company provide farmers with modern digital tools?

The technologies continue to change all spheres of our life and the goals of the world economy. This also applies to the most radio kinds of human activity. For example, in recent years the world is increasingly talking about the “new agrarian revolution”, which caused the introduction of it-technologies into agriculture. Digital and automation reduce the costs of fertilizer, and fuel, while increasing the productivity of agro-companies, and thus the profitability of the industry. And nano-, bio-, smart technologies, new methods of processing, and logistics instruments make the time of agrarians very valuable. So they need ecosystems that allow them to automate and digitize production so that they do not waste time on routine processes and focus on increased efficiency and business growth.

Ukrainian agrarians understand that the digitalization and increase of the effectiveness of agro-production are not a whence, but a requirement of time. Without this, do not increase the margin of business (when profit covers constant expenses – Ed.) But do not approach the realization of the global goal embodied in the goal of sustainable development of the United Nations – zero hunger

Preparing the second issue of the rating “Index of Innovations”, Mind analyzes how domestic companies are ready for real implementation of changes, and what they can do for this. Today we talk about the successful case of the young ambitious IT-company AgriChain agro-industrial holding “Astarta-Kyiv”, which offers a complex system of digital solutions for agribusiness management.

How was an innovation born?

When IT-technologies only appeared in Ukraine, agrarians thought about simplification of processes, but it was about elementary decisions, for example, the introduction of Excel tables for accounting and reporting. At the beginning of zero companies began to apply the 1C program for accounting, telemetry modules of dispatch services, and systems of control of the use of technics. As a rule, small agro-companies stopped at this – some of them continue to work as well today.

However, large agro holdings could not stop at this, increasingly experiencing the need for business processes to be de-iterated, planning and management automation, and integration of it-technologies into all spheres of the enterprise’s activity. The first thing that needed attention was solution integration and operational management reporting. It was necessary to do so that different departments of one holding company did not rely on different input data in their decisions and did not cause delays, plan failures, and financial losses.

The agricultural holding “Astarta-Kyiv” was originally built as a high-tech, public, innovative European company, which produces food products oriented to global markets. Therefore, the creation of its ecosystem for this mission was the only possible option. In 2017, the general director of the agricultural holding, Viktor Ivanchyk, started an in-house IT company – AgriChain.

In the English translation AgriChain is an “agrarian chain”, that is, the name of the company has its philosophy and main purpose: Creation of a complex software product, which will become a tool for management and construction of processes for agro-producer, the task of which is to minimize expenses and increase the efficiency of production. After all, the real competitiveness of the company on the market is impossible without efficient use of the land bank, machinery, etc., and it is impossible without clear planning and control of the whole chain of production processes.

The company likes to quote the American doctor and car pioneer Goratsio Nelson Jackson, who said: “I do not believe that someone can do today’s work yesterday and stay in business tomorrow.”

Solution architecture

The AgriChain concept includes:
a unified information system for service management at all levels;
automated flexible business processes that quickly adapt to changes in external or internal conditions;
message system, management tasks, decision-making tools;
automated document management;
a system of deep analytical reporting based on risk management;
simple, friendly, intuitive interface (online platform with browser or mobile applications).

The multi-module platform is a complex system of it-solutions that optimize the work in all directions of the enterprise activity.

Its architecture now consists of six separate program complexes:

AgriChain Land – land bank management;
AgriChain Farm – agribusiness management;
AgriChain Scout – management of planting monitoring;
AgriChain Barn – management of complex processes and logistics of the enterprise;
AgriChain Logistics – management of logistics of commodity and material values and finished products;
AgriChain Kit – business process modeling and management.

At the heart of the AgriChain solution, the concept is complete integration with 1C, GPS monitoring, and satellite and meteorological data, which are consolidated into a system for analysis and decision making and are used as part of business processes.

Part of the platform web applications is based on Domain-driven design (DDD) principles. The main technology for the server component is ASP.NET Core MVC, for the browser – react (component-oriented architecture using modern approaches context API and hooks). The other part is developed based on a microservice event-driven architecture, where the basis for the server part is Netflix OSS, Spring, and Apache Kafka, for the browser part is Angular. Mobile applications are based on Android Framework.

Social mission

The uniqueness of the AgriChain platform is that it is not just a business project, it also has a social mission. Since the mission of ASTARTA-Kyiv agro-holding is to build a strong Ukraine and strengthen its trust in it in the world, opening up and increasing the potential of Ukrainian land and people and encouraging society to take an example of doing business on the principles of fair partnership, the company is ready to provide other market participants with the product developed by it at a much lower cost, than it spent on its development. “Astarta” creates an agro-industrial ecosystem – a combination of people who want to share their knowledge, expertise, opportunities, and tools for synergistic and sustainable development of industrial sectors, agriculture, and human capital. Thus agro holding hopes to make the industry as efficient as possible.

Small and medium-sized agro-enterprises should realize that the way to efficient production in the industry lies in the complete and objective nature of the data and the ability to work with them, so its future is in digital optimization. Business wants to minimize losses and increase profitability, so it needs an effective tool for management and analysis as an air. In fact, at many agricultural enterprises, the digitalization still looks like a few purchased software products, which are not integrated among themselves and do not have centralized management functions, or most often – geoinformation systems, which audit data and integrate with accounting systems in manual mode.

“We invite all participants to the dialog, exchange of experience, and the most effective practices,” said Nataliia Bogacheva, CEO of AgriChain. “We propose to unite in using our platform, which will allow at all stages of the production process to plan it qualitatively, to control risks, to increase the efficiency of each particular producer, and also to improve the system due to experience of all participants to increase the efficiency of the industry as a whole.”

Industry-standard

The needs of different agro-enterprises in automation are excellent, but not unique. Some of them are interested in the module plan-fact analysis of production program implementation, others in the inventory unit to prevent theft. As large agro holdings deal with a complete set of agricultural tasks, AgriChain’s system products contain solutions for most of them. Supply chain solutions, which offer the platform, allow the enterprise to optimize all operational processes and get maximum expertise.

The program complexes are formed taking into account the most modern practices, tools, and approaches, as well as the existing expertise of experts on the market. So, the AgriChain platform is as efficient and flexible as possible – it is quickly implemented, scaled, and calibrated to meet the needs of each enterprise. If the enterprise data is organized, structured, and stored electronically, deployment of such a system will require no more than one day.

The AgriChain platform can be used as a cloud service or as a box solution. In the first case, AgriChain company is involved in system development and technical support, the second provides client-side administration and data storage on its own servers.

Khmara service is more suitable for small and medium-sized agribusinesses that do not need to be involved in the administration and have their it specialists. In the case of a box solution, AgriChain specialists advise and accompany clients in setting up the system, and also train one or two specialists for further support, because the company’s goal is not just to sell the product, but to teach market players to use it effectively.
The only point of authorization in the system is the working space with the debts for each program. From it, with one click, the user enters any module available to him. If certain modules are not interested in the company, it may refuse them. Each functional module is integrated as an independent solution.

AgriChain experts plan that over time the platform will become the standard management system for the industry.

How it works?

Each software product solves specific tasks.

So, the IT-management system of land bank AgriChain Land helps to solve the following problems:

lack of reliability or untimely documentation of lease agreements for land plots;
discrepancies in the area of the sites that rent and process the enterprise;
absence or incomplete display of information about the exchange sites;
low level of consolidation of the land bank and high level of technical losses;
crediting of rent payments for sites that are not processed or are outside the fields;
loss of yield on areas that are processed without legal grounds.

Before the introduction, the AgriChain Land module was “rolled out” at a test enterprise with a land bank of 10 thousand hectares. Today the module works on sites of a total size of 250 thousand hectares and manages the whole area of the land bank of the company “Astarta-Kyiv”.

AgriChain Farm’s it-management system can correct the following deficiencies:

lack of coordinated communication between production services;
not the optimal number of staff;
absence of a system of control over the execution of the planned production program;
inappropriate and suboptimal use of resources;
failure to comply with the norms of execution of technological operations.

The AgriChain Scout sowing monitoring system solves the problems of absence:

a unified system of historical, satellite, and aerial photography data;
a clear system of risk response (diseases, pests, weeds);
system monitoring and crop survey culture;
dynamic forecasting of agricultural production volumes.

AgriChain Scout allows to receive an analysis of satellite indices of crop condition and panoramic images with the system of response based on satellite indices and soil moisture measurements from NASA, to create an agrochemical field passport, as well as systems of monitoring of crop condition, forecasting of yield and information messages about critical events in fields.

With its help, the agronomic service can automatically plan field reviews in the link to specific agro-culture, detect diseases, pests, and weeds, make decisions for their immediate elimination, formulate proposals and arrange discussions with experts.

“The concept of AgriChain Scout is to build a system of crop surveys as one of the main components of the business processes of the agro-company,” explains Nataliia Bogacheva. – The platform provides an opportunity to build a system of a survey of crops for each specific company. It allows performing two-level monitoring of the condition of crops: To receive reports on critical events in the fields, to review consolidated analysis according to the plan of performance of reviews, to study the forecast of yield and the general assessment of the state of processes”.

And adds: In the future, these forecast data will be used in budget processes – for the planning of elevators and current product logistics.

In the language of numbers

The company would not have done anything when it was ready to invest in innovation time and money did not have a powerful human resource. At first, they were ten enthusiasts – the company’s own specialists and industry experts. They set a goal to create a unified information system for agribusiness management with automated and flexible business processes. It took three years for a full launch of a startup – from the idea to market entry.

Today AgriChain is a team of like-minded people, experts in the field, and 45 high-class specialists of cross-functional it-team, as well as 553 thousand hectares of land under the control of it-system; 6 it-solutions brought to the market and 8 client companies with implemented software complexes. The economic effect of the company’s product introduction can be measured already today: For AgriChain Farm system it is 793 thousand UAH, and for AgriChain Land module – 3,7 million UAH.

“I am inspired by people who have taken the agricultural sector in Ukraine to a completely new level in recent years,” said Natalia Bogachev. “The incredible stories of their achievements give us the realization that nothing is impossible.” According to CEO of the company, AgriChain strives to share its expertise and tools with other market participants for the synergistic and sustainable development of the industry as a whole. The company cultivates a careful attitude to the use of natural resources, advancing the opinion that the success of agribusiness is based on efficiency rather than on the number of hectares worked.

“By taking the example of our solutions, we prove that innovative IT-tools improve the efficiency of agro-enterprises, and thus AgriTech can help achieve sustainable development goals for a better and sustainable future. We are open to partnership and invite all those who are willing to join the Astarta ecosystem,” concludes Bogacheva.