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

EFITA / WCCA 2007 : Herdon M.- Rózsa T.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 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 ( ) – Number of supported projects

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

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

EFITA / WCCA 2007 : Herdon M.- Rózsa T.17 New Hungary Rural Development Programme 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)