Choosing Software: The Case for Using ERP/CRM/SCM to Scale Farms
Chris Newman | January 3, 2023
What's the common verdict between all the direct-sales software platforms available for farms to use to manage their sales, inventory, aggregation, etc.?
They all, to a greater or lesser degree, leave customers wanting.
Out of the box software solutions from Barn2Door to Local Food Marketplace to Square to CSAWare work well enough for smaller operations, though not without complaints. They're often expensive, have dated interfaces, don't play well with inventory, and the list goes on. But things get worse as these operations start to scale.
Here's the TLDR version of this essay if you don't have time to read all the way through:
If you're approaching seven-figures in sales volume and you're aggregating from multiple farms, your operations are going to be too complex for any of the pre-built software systems out there. Your supply chain isn't the only thing that's going to get really complicated, though. Your HR, payroll, reporting, tax management, accounting, and customer service are also going to get really complicated, all at the same time.
There's already a solution out there to solve this kind of problem: ERP (enterprise resource planning) and CRM (customer relationship management) and SCM (supply chain management) software.
I had a conversation with a farmer friend and kindred spirit who's started to develop their own platform after, in their words:
"I noticed that everyone that had good, functional software had it designed for their exclusive use, and many of whom manage an IT team"
"My farm is complicated as f*ck and every (pre-built) software company has told me that as if I'm the problem."
If you're in the market for a software solution for managing your business and you hear this last line in particular, it's a really big red flag. Software companies are not in the food business, they don't have any business telling you how to run yours, and if they do, they're deliberately attempting to throttle what works for you in order to make you work for them. It's not surprising, though, that in the chronically underfunded farm-to-table space, service providers more or less get away with this, and it speaks to another thing my farmer friend said and that I've internalized for years:
"Everyone else (not using custom-built platforms) seemed stunted BECAUSE of their dinky software."
It's hard not to notice anecdotally how many farmers are wrapping their operations around the variously limited capabilities of e.g. Squarespace or Barn2Door and how, as these operations are poised to grow, their software becomes a bottleneck. Farms end up serving software companies instead of vice-versa. I don't have the data to prove it, but I'd be willing to bet it's holding us back systemically.
Jaime Gaehring wrote an excellent essay awhile back about creating a platform cooperative - a collectively-owned software platform with marketing and production data each providing business intelligence to the other. The initial series of conversations with aggregator CSAs that they've painstakingly recorded brought some memories flooding back from my days as a software consultant: what these larger, sophisticated operations seem to need isn't a brand new platform specialized for ag so much as a CRM, ERP, and SCM system working in tandem.
That's because growth at this stage introduces a host of challenges beyond getting ordering, e-commerce, and inventory to play nicely... and they tend to hit all at once: more complex accounting, supply chain management, aggregation/marketplace, payroll, HR management, customer service, budgeting and forecasting, business intelligence, etc. - ERP/SCM/CRM systems are specifically designed to be customized to solve these problems for businesses with extraordinarily complex operations. The particulars of even the most complicated farm aggregator could almost certainly be handled with customizations to ERP/SCM/CRM supply chain modules at the fraction of the cost/risk of developing a new platform, while solving all the other support issues listed above.
Perhaps the platform cooperative, instead of being a standalone product, would exist as a team of people tuning e.g. NetSuite, Oracle SCM, and Salesforce around the requirements - from e-commerce to customer service to payroll to accounting to supply chain and beyond - of an aggregator's entire business?