Technology is inescapable these days. Farmers and industry stakeholders are looking at advanced tools like robots, software, automated equipment and self-driving machines. These tools offer incredible opportunities for improved efficiencies, decreased reliance on labor and more precise management.
Whether you are currently planning to invest in a piece of technology on the farm or are considering it in the next five years, advanced preparation is the key to a positive implementation process and impact to the bottom line.
Strategic decisions like these can significantly impact a business's growth and efficiency and build the framework for long-term viability, but how do you know where to start?
Evaluate where you are
It is difficult to make a decision about your future when you don’t know where you are now. Having a good handle on where your farm is both financially and operationally is crucial so you can decide if a new piece of technology will earn you more money and grow your business.
A financial analysis, which reviews your financial statements, allows you to understand your current position, evaluate your business and understand how you are using and making your money. Once you have a good grasp on how your money is flowing, you can develop projections based on the cost and impacts of the technology you are exploring. Are you able to explain how your money flows through the farm and how it is currently working for (or against) you?
Another common tool you can use during this process is a strengths, weaknesses, opportunities and threats (SWOT) analysis, which helps you assess where you are now and set strategies to get you to where you want to be.
Start by conducting an internal analysis where you and the farm’s leadership team identify the business’s strengths and weaknesses. Then dive into the external factors affecting the farm business. Here you identify external opportunities and threats coming from outside the farm.
After all the information has been pulled together and recorded, the next step is to recognize and create available strategies to move you toward your end goal.
Creating strategies is your opportunity to find ways you can take advantage of your strengths and minimize or eliminate the impact of the farm’s weaknesses. You are looking to maximize the business’s potential while mitigating risks.
A comprehensive SWOT analysis helps a farm acknowledge and be responsive in the current business environment and market. The business strategies derived from the SWOT analysis should be realistic actions that help the farm reach its goals. Spending time developing these goals and strategies helps a farm adapt nimbly in a changing environment and make proactive business decisions.
Set or review your goals
Goals supply the strategic framework for results and keep the focus on what matters most. They prioritize which decisions and actions are critical for quickly moving forward in the right direction, and they define what success looks like. Just about every decision made or action taken on the farm should contribute toward your goals. If it doesn’t, why are you doing it?
Large investments should always align with the strategic, operational and financial goals of the operation and family. There should be a clean line from the new technology to the end goal showing how it helps you reach your long-term vision. If that’s not clear or you’re not sure if it will help or hinder you, it’s time to step back, re-assess and gather more information.
Checking your readiness
It is hard to know whether you are ready to make such a large investment. Checking your readiness begins by exploring what information you should be aware of, gathering the necessary information you don’t have and connecting with the right people who can get you what you need. A self-assessment tool can help with this process. The “Are You Ready?” worksheet was developed by a team at UW – Madison Division of Extension based upon interviews with dairy farmers to help you assess nine key areas that contribute to the successful adoption of emerging technologies. These areas are:
- Business strategy and goals
- Cost-benefit review
- Infrastructure and logistics
- Connectivity
- Labor and training
- Support
- Adaptability
- Stakeholder management
- Production impacts
By thoroughly assessing these areas, you can make stronger decisions and increase the likelihood of successful technology adoption in your agricultural operations. It helps you begin to break down the barrier of “you don’t know what you don’t know” and identifies areas you can work on.
Adopting new technology in agriculture is a significant investment that can be highly profitable if done well, or costly if not. The tools mentioned help farmers understand the impact of new technologies in dairy farming. They incorporate strategic thinking on the farm by allowing you the opportunity to analyze your current situation, envision where you want to be, set strategic goals to align with your vision and assess your readiness for making a change that drives growth and efficiency.
This article is provided for information purposes only. Readers should consult their own professional advisers for specific advice tailored to their needs. Information contained in this article may be subject to change without notice.
