Functional evaluation of enterprise information systems in co-operatives

1. Functional evaluation of enterprise information systems in co-operatives by Miklós Herdon – Tünde Rózsa

2. Content • Objectives • National Economy Development Plan • Survey in the SME sector • Survey results • The situation in co-operatives • ERPs in co-operatives • New Hungary Rural Development Programme 2007-2013 • Consequences and results EFITA / WCCA 2007 : Herdon M.- Rózsa T.

3. Objectives of our research • Analysing the evolution trend of ERP • Studying the SMEs sector by • Vendors • Enterprises • Analysing the ERPs by • Functionality • Aspects (eg. Selection criterias) of enterprises • SMEs in rural areas • Agri-food sector EFITA / WCCA 2007 : Herdon M.- Rózsa T.

4. National Economy Development Plan (2004-2005) – Number of supported projects EFITA / WCCA 2007 : Herdon M.- Rózsa T.

5. National Economy Development Plan (2004-2005) – Value of supported projects EFITA / WCCA 2007 : Herdon M.- Rózsa T.

6. Survey among SMEs • General questions for enterprises • Revenue, number of employee, sector, type of activity • Questions for information systems • Applied information system(s) • Type of searching (loging for) IS • Used modules • Selection criterias of IS • Advantages of used IS • Expectations • Investment, system and implementation cost (ROI) EFITA / WCCA 2007 : Herdon M.- Rózsa T.

7. Used modules EFITA / WCCA 2007 : Herdon M.- Rózsa T.

8. Function priorities EFITA / WCCA 2007 : Herdon M.- Rózsa T.

9. Priorities by functions EFITA / WCCA 2007 : Herdon M.- Rózsa T.

10. System selection impacts Advertisment Vendor Recommendation Internet EFITA / WCCA 2007 : Herdon M.- Rózsa T.

11. Selection priorities EFITA / WCCA 2007 : Herdon M.- Rózsa T.

12. The co-operatives • The farmers have problems in connection with marketing, sale and logistics in the agriculture sector. • The operation of processing integration systems is an efficient tool of improving the market situation. • Partnerships of Production and Sales (TÉSZ) representing 12% of the horticultural production output. EFITA / WCCA 2007 : Herdon M.- Rózsa T.

13. Mórakert Co-operative • Fundamental principles • The P.O. was established by the Danish and German model • Their essential aim is to assure the safety of market and sale for the producers. • This is how they hope to prevent the resident population from leaving the region, and build a secure financial background for the families. • Organization • The general assembly is the main body to make decisions. • The general assembly chooses the 7 person board of directors and the president of the board. • The internal audit is done by the 5 person board of supervisors and the auditor. • The managing director is in charge of sales and managing the staff. • Coperative organization • In the scope of self-management the P.O. coordinates the economic process fromthe purchasing to the selling. • The P.O. is a founding member of a national association called HANGYA Cooperation of Hungarian Acquisitions, • Members • At starting in 1995 there were 52 members. • Today the vegetable-fruit co-operative has more than 700 active members. EFITA / WCCA 2007 : Herdon M.- Rózsa T.

14. Processes in co-operatives • We can identify the following processes in TÉSZ (Co-operative): • Main processes • Supply process • Storing processes • Production processes • Sales processes • Other complementary processes • Financial • Accounting EFITA / WCCA 2007 : Herdon M.- Rózsa T.

15. H.6 Network structure Shops& Supermarkets H.5 „A” Consumer network „B” Consumer network Export Wholesale trade H.4 Product flow Trade integrator Other palers in vegetable-fruit supply schain Co-op. – Co-op integration H.3 Agri-logistic Integrated System Other players Co-op. H.2 Co-op. Processing plant Artificial fertilizer supplier Grain supplier Farmer H.1 Enterprise Farmert Farmer EFITA / WCCA 2007 : Herdon M.- Rózsa T.

16. Farmers Consumer Long term contract Business process Co-op. – Co-op. Integration Quality mangement Operative Centre Receiption Equipment Planning delivery Quality Farmer Farmer Storing Capacity planning Forcast Sale Farmer Transport Accesibility Inventory management Investment Orders Production Relations Barcode, Tracing Reliability Packing Finance Partner relations Source: Institue of Agricultural Logistic Transport optimaziation, Forcasts, General contracts EFITA / WCCA 2007 : Herdon M.- Rózsa T.

17. New Hungary Rural Development Programme 2007-2013 • Vertical integration, partnerships and co-operation of producers. • Partnerships of Production and Sales (TÉSZ) representing 12% of the horticultural production output. • 200 producer groups with state recognition, and a membership of about 12,000 to 15,000 will be established in Hungary. • Further some 650 Procurement and Sales Partnerships (BÉSZ) have also been established in Hungary. • SME and Logistics Development. • „FarmerNet” Programme: • Within the framework of this programme, agricultural producers are granted with supports for the purchase of IT equipment. Any registered producer with a farm size exceeding 2 ESU will have the opportunity to purchase small IT equipment (hardware) EFITA / WCCA 2007 : Herdon M.- Rózsa T.

18. Consequences and results • According to our survey the most Co-operatives haven’t used ERP system yet. • The most used systems are used for book-keeping. But based on our experience of other sectors (for example in trade sector) the ERP solutions are expected to spread. • In the future the ERP systems made for SMEs will be important resource. That is why this systems are used in our education programmes. • The agricultural informatics students have to learn “ERP”. In this subject based on their earlier studies (operating system, networking, database system, software development, information system development, etc) they work with ERP systems such as CSB, Infor:com and SAP. • University of Debrecen and SAP signed an agreement to start the UD-SAP Competence Centre. • We developed applications to support ERP selection and evaluate for SMEs (e.g. ROI calculators) EFITA / WCCA 2007 : Herdon M.- Rózsa T.