Peter Martin: Grow With Good Data

As a finance and growth consultant with K•Coe Isom, Peter Martin helps businesses identify opportunities, source capital and manage expansion challenges. ( Farm Journal Media )

Success looks different from farm to farm. For some, it means adding more acreage, increasing revenues and improving margins. For others, it means optimizing operations or even improving the owner’s quality of life.

However you define success, reaching it requires access to good data. To make smart decisions and execute your strategic plan, you need accurate, timely, across-the-board information. That’s critically important and not just during tough times.

Unfortunately, that kind of data-capture is often missing in production agriculture. I regularly interact with business advisers, capital providers and others looking to get into agriculture. They’re always surprised by the lack of information and decision support material on farms. It’s a deficiency we rarely see in similar-sized companies outside of production agriculture. Manufacturing, for example, has not been as averse to adopting data-capturing tools that offer sophisticated methods for determining their cost of production and other key metrics.

It’s long overdue for production agriculture to start embracing these data-gathering tools. This is way beyond the “early adopter” stage.

There are many reasons why these sophisticated data tools are so valuable on farms. Maybe you’re thinking of expanding, or you want to reduce costs, outsource work or change how you address risk management. Having good information at your fingertips that’s specific to your own operation can provide a host of answers.

Another benefit is better interaction with the agronomists, accountants, bankers and other advisers you depend on. All are providing you with important information. When you capture key data in a sophisticated system, you’re arming those advisers with better, deeper, broader, more accurate information. That improves their ability to help you. And when your advisers don’t have to gather the data themselves that saves you time and money.

Consider these pointers on data gathering and use:

  • Clarify what to track and accomplish. Spend time up front determining what data you need to gather and why. Talk to your advisers. They will likely recommend tracking metrics such as production costs, operating margins, reporting by field and by crop, farm management activities, employee performance and risk management decisions. Asset efficiency, or use of your equipment, might be another area to track.
  • Start with your people. What matters most is not the latest “big data” system or software but the people and processes you use. One of the biggest hurdles of new technology is getting people to use it. Work with your team so everyone is on board with capturing and incorporating data so you can put standardized farm and office policies and procedures into place.
  • Move away from the “I” to the “we.” Avoid creating silos of information that aren’t accessible or available to others.
  • Consider incentivizing the data-capturing process. One farm having trouble getting employees to input information, began offering cash incentives to employees for delivering timely results. It’s one way to start building good habits.

There are numerous data-capturing systems and packages out there. Whichever you choose, make sure it’s cloud-based, standardized and can interact with other systems. Avoid customizing your own system, which becomes complicated and costly.

Further, these systems are expensive to build and maintain. Make sure you select one from a company that has the financial strength, expertise and ability to stay relevant.

It’s time to put this incredible technology to use. Make 2019 the year you improve your data-gathering and analysis efforts.