Today we have Natalia Bogacheva, director of the young company AgriChain, which is developing the same-name modular platform for agribusiness management. Originally created to optimize the business processes of one of the largest agro-holdings in Ukraine «Astarta-Kyiv», this solution is developing and now also available to external customers, both in the form of a package solution and SaaS.
Despite the fact that the use of high-tech in the argo business in recent years has been discussed more actively, it is still quite unusual to perceive agriculture as a system IT consumer. Why are agrarians paying more and more attention to information technologies today? What are some of the most pressing issues that can be solved with their help?
Because of high production and shifting inventories, world agricultural prices tend to decline. At the same time, the cost of production in Ukraine remains quite high. In addition, the climate is changing, requiring changes in crop rotation and production techniques, which often do not have the best impact on soil fertility. All this together leads to higher production costs and lower margins.
As the statistics show, the global drop in product prices (since 2011) and the decrease in margins correlate with the amount of investment in the so-called AgTech. In the last five years alone, about $17 billion has been invested in solutions to improve operating efficiency in the world.
The main task at the same time – cost management – is what can affect the agricultural producer. This includes effective land bank management (as it is the main asset) and production program, operational monitoring and response to the state of crops, proper resource management (both CLAX and OPEX)optimization of the number of employees, and much more.
What is the role of digitalization in the modern agro-industrial industry in the world and in Ukraine, what are the differences?
The main difference between agribusiness in Ukraine is the significant scale of agribusiness and land bank. While in the US, for example, large farm companies own 7,000 – 10,000 hectares, by Ukrainian standards it is a small agricultural holding. Another important difference is the long-standing moratorium on the sale and purchase of agricultural land. And with the adoption of the law on the land market, the situation will not radically change in the foreseeable future.
First of all, these factors affect the fact that Ukrainian farmers have to pay a lot of attention to the administration of a land bank, the organization of work with leasing contracts, and communication with shareholders. Therefore, the priority of our farmers today is automation in this direction. Given the size of companies and the complexity of their organizational structures, systems are being introduced to automate business and accounting processes and workflow. Many Ukrainian companies are also introducing tools and technologies for the organization of increased control over the use of resources. It is possible to look with caution at the mentality of our people, which has been shaped for decades in the difficult economic situation of the country. In other respects, the tasks solved on the world market and in Ukraine are similar.
What technologies do you think have the greatest impact and how do they affect the final cost of the product?
In my view, the basis of any business is well-structured and automated business processes, which should be flexible and easy to adapt to changes. I am sure that each organization should start with this, including in the field of agricultural production.
Reliable data from different sources should be part of business processes, not just Big data. Telemetry, satellite, meteorological data, etc.
There is no universal technology that would help all agro-companies. After all, each holding has its own tasks and problems. Therefore, it is necessary to properly analyze the feasibility of a solution, to study its use as part of the system of assessment and motivation of staff.
For example, an integrated crop analysis and monitoring system minimizes the risk of loss and predicts future yield. High-quality yield forecasting entails proper planning of logistics operations and elevator capacity, and, ultimately, the liquidity of the company. As a result, the implementation of such a solution in a large enterprise can save hundreds of thousands of dollars.
How «Astarta» come to the need to create its own ERP-class solution and why on its own?
Initially, a detailed analysis of the market of software products for agro was carried out. There are good systems, but they cover the tasks of business partially. For some, we never found the right tools.
Many solutions required considerable time to refine, adapt and implement. The main problem was the difficulty of combining all the necessary systems to build efficient work. Therefore, as a result, the management of «Astarte» decided to create its own product, which is able to close all business needs. For this purpose, to develop a single portal for agribusiness management, AgriChain was founded, which brought together experts in both agro and IT
What organizational and architectural principles are at the heart of your platform? What technologies are used in its development?
To manage projects in multitasking mode we use the Scrum methodology. We were able to construct qualitative formalization of tasks taking into account the general concept of system development and customer requirements, complete documentation of requirements and technical tasks, in-depth task development during the UI/UX design stage, and planning sprints based on tight time management and quality retrospective. Daily meetings (Scrum Stand Up) are a very effective tool for us. To manage the tasks we use the ClickUp system, which currently covers our needs in terms of event planning (sprint planning), problem sets, evaluation (estimate) and task completion, and post-sprint analysis.
It is my deep conviction that all these tools can be effective only in the conditions of micromanagement, management, and full control by project managers.
Depending on our business objectives, today we use two approaches in the choice of architecture and development technologies. Some web applications are based on monolithic architecture using the principles of Domain-driven design (DDD), where ASP.NET Core MVC is used as the main technology for the server component, and for the browser – React (component-oriented architecture using modern context API and hooks approaches). Another part is developed on the basis of a micro-service event-driven architecture, where the base for the server part is used Netflix OSS, Spring, Apache Kafka, for the browser – Angular. Some mobile applications are built on the Android Framework. As for IT infrastructure, there are such tools as Kubernetes, Docker, Jenkins, Rancher, etc.
What modules are part of the platform and what are its main features? It is already used in holding enterprises and has shown a certain efficiency. Does the development pay off?
AgriChain is an integrated online IT system for agribusiness management. It consists of eight modules (web and/or mobile applications), which can be used separately or combined according to the needs of the customer.
Today, five modules are available: AgriChain Land – Land Bank Administration, AgriChain Farm – Planning and Management of Production Processes, AgriChain Scout – Crop Monitoring Management, Crop Yield Analysis, and Dynamic Yield Forecasting, AgriChain Barn – Warehouse Logistics Management, AgriChain Kit – Business Process Management.
By the end of the year we plan to release three more modules: AgriChain Logistic – logistics management of TMZ and products (field- elevator/ sugar factory), AgriChain Machinery – operation and repair of equipment, it will be our own GPS monitoring system. AgriChain Report – We plan to use BI system as part of AgriChain portal.
Our modules are already working in «Astarta». At the final stage of implementation several external clients. The cost-benefit analysis of the land bank management module, for example, allowed the holding to cut costs by $7 per hectare. The use of the Production Process Management module saved $8.1/ha. And this is only the direct effect that can already be estimated in the first year of use. This year we will also get some cumulative effect from a number of transformational changes in the company that has taken place as part of the implementation of our modules. Since our task is not only to develop a software product but also to abandon existing inefficient practices, to make organizational changes, and to revise business processes in general. And here we work closely with our customer.
It is also important to note that the development of our products is already paying off.
Why did your company decide to market its software product? Who is it targeting? What businesses do you see as your customers?
When creating the concept and the actual development of the AgriChain system, we needed to consolidate the best practices and lay down the most flexible tools to adapt the solution to different processes and business models of companies.
Therefore, we are in a mode of continuous constructive dialogue and exchange of experience with various agro-companies, for which we presented the concept and architecture of the system as a whole, as well as the developed modules. In the past and this year alone, we have held about 30 meetings with management and operating specialists of large and medium-sized agribusiness. Getting feedback at the development stage is invaluable for us, as today so many practical cases, which were voiced by our colleagues, have already been implemented in the system. There are companies whose relationship format has been transformed from experience exchange into commercial contracts. They’ve already acquired and are implementing our solutions.
In our product promotion in the market we also see a definite mission of «Astarta», and its message to other market participants – we are ready to share our decisions to increase the operational efficiency of individual companies and the industry as a whole. Creating, in this way, a partner ecosystem. First of all, our solutions are designed for large and medium-sized agribusiness. But there are also plans to create «light» versions for small enterprises.
What do you think are the main advantages of your development over various analogs?
Our key advantage is the localization of the developed modules for each specific customer, full integration of our solutions with the accounting system through conversion bases or subsystems 1C, with data from various equipment and telemetry (GPS trackers, DUTs, fuelling and weighing complexes, trailer tags, RFID, data acquisition terminals, on-board computers, soil moisture sensors, flow scales, etc.), satellite and meteorological data, which are consolidated into a single system for further analysis, processing and making management decisions based on risk management. We offer our customers a modular platform that covers all major tasks of agribusiness, not a single direction. Our client may choose one or more modules depending on his business objectives, rather than purchasing the whole system. At the same time, we carry out, if necessary, integration work, completion of the existing functionality at the request of the client, training of personnel, and technical and advisory support during the implementation.
An important difference between our platform is also the choice of two options – subscription to SaaS-service or box solution (cost of a three-year subscription). With the possibility to choose optimal conditions for integration and implementation – on our own or with our help. This is not usually the case in the market for systems at this level.
Your platform is available as a software and as a service. In what cases, which of these options, in your opinion, is optimal? Is «cloud» in demand today? On what platform is it deployed?
There is no definite answer, which is optimal for a particular company – service or «box». We have very different approaches to decision-making.
If we consolidate the experience of interaction with clients, we usually first offer a «pilot», during which we deploy a specific module under the client in the cloud, carry out the initial loading of the necessary data and give the opportunity to evaluate the capabilities of the system as a whole. Here are some basic scenarios.
The first option is when the company is at the stage of forming a business request for a number of organizational changes and process improvements, and alternatively considers the implementation of automated systems. Staff readiness for the implementation process and cost-effectiveness are not yet understood. Therefore, management is not ready to invest in the acquisition of software. However, it can finance a phased integration with the completion of the functionality on demand. In this case, we offer the client cloud service with the possibility to revise the decision in favor of the box version based on the results of the system use. At the same time, we perform work on customer cloud deployment, integration, training of personnel, consulting, and technical support.
The second scenario assumes that the enterprise has reached a certain maturity for transformation processes through the introduction of automated systems. There is an administrative capacity and staff readiness for the implementation process. The company is ready to invest in the acquisition of software, and its capabilities fully meet the demand. However, it is focused on local IT infrastructure (for example, due to the principled position of the owner or management) and considers only a variant of the box solution. In this case, we suggest the client evaluate the existing resource of IT specialists for the deployment of network and software infrastructure, and monitoring of work servers and databases. As a rule, such tasks require the development of additional competencies in own IT specialists. So our client has to decide if he has a resource for this. For our part, of course, we offer training, follow-up consultations of the customer’s specialists, and integration work, if it is decided to purchase a package solution.
The third scenario is related to the fact that the company has passed all stages of the transformation processes, according to the results of the pilot project there is a full readiness of the staff to implement and use the systems, and software functionality fully corresponds to the operational process. It is ready to provide feedback on the improvement of the system, its expansion, and the results of improvements in the form of updates to receive new options. But it cannot use its own resources to moderate IT infrastructure. In this case, we offer the client cloud service, provide the work on its deployment, perform integration tasks, make improvements on request, train personnel, and provide consulting and technical support.
To sum up, we try to be as flexible as possible in choosing the best option for each specific company. At the moment, the ratio of our contracts is approximately 50/50 – service and «box». By the way, we have the cloud deployed on the platform Hetzner.
The introduction of any enterprise management system is primarily an organizational change. Have you encountered any resistance to innovation in the implementation of the solution? What is needed to successfully overcome it?
Our solutions help not only build business processes, and optimize costs, but also make it virtually impossible to abuse, and misuse resources, improve the control over the performance of work and compliance with all norms, point to human error and so much more. So resistance and rejection are in fact inevitable. Often, after the introduction of such decisions, some personnel change.
The key factor of success is understanding and support from the management, well-planned stages of implementation, «sale» to the internal client, quality training, and support of system users. I personally read all user chat rooms to understand what questions are, what feedback is promptly given by our implementation team, and where something may need to be improved or corrected.
What difficulties did you face when deploying the system at the enterprises of «Astarte» holding and how did you overcome them?
I would not call it a challenge. For us, it is part of the process, of the work that needs to be done to achieve the goal. Of course, there are many bureaucratic procedures to harmonize and formalize TK, under which you need to offer the customer options of business logic and technical solution, infrastructure organization schemes and data exchange, according to the requirements of IS, including authorization and moderation of system users, deployment of test and later working environments, taking into account the specifics of different services, organization of the client’s first line of support, etc. But the more difficult the way to go, the more satisfying the end result. So I sometimes tell my colleagues that we work on the «adrenaline wave» of the achievement. This helps us a lot and gives us strength in the mode of over-loads and multitasking to go to his goal.
How many people are involved today in the development, implementation, and maintenance of AgriChain? Where is the development center?
The object of my pride is our team, without exaggeration Dream Team, in which we cultivate the idea of a start-up and treat the project as a personal matter. We have worked hard on this for the past two years. We have high-class professionals with rich professional backgrounds and expertise in the industry. They are motivated by challenges, interesting and complex tasks, and the scale of the project. They are united by one goal – the creation of a single portal for agribusiness management, which will become the standard for the industry. To date, the company has more than 20 employees – product and project managers (seven active projects), 10 developers, business analysts, implementation specialists, QA, UI/UX, dedicated sales and marketing department, who work together on the development, improvement, implementation, and promotion of our solutions. The development center is located in Kyiv. There is also a group of specialists, which we attract by outsourcing. The nearest plans are to expand the number of employees.
Do you have the resource to scale the platform to third-party customers on your own or do you plan to develop some kind of partnership ecosystem for this?
The team grows dynamically in proportion to the number of tasks, we constantly analyze a load of our specialists within the framework of projects and do everything necessary to ensure high-quality and fast implementation, as well as further support of solutions for clients.
We are looking at partnership options with multiple companies, mainly to expand opportunities on a narrow customer request or to obtain additional data to fill the system. Also today we are at the stage of integration with the decision of a British company, cooperating in terms of data exchange and experiments with colleagues from Belarus, considering options of integration with a number of Ukrainian resources to obtain data from registers into the system. In general, there are quite a lot of plans.