Fulton Farm Organic

ABSTRACT

This paper is for the executive committee of Fulton Farm Organic's who has asked for us to give a report on the strategic implications of integrating information technology for our business with reference to the next three years. I am writing this report in order to submit it to the executive committee of Fulton Farm Organic's.

I. DEFINITION

The purpose of this project is to propose integrating new information technology systems into Fulton Farm Organic's business strategy. The internet has considerably changed the face of the farming industry and more farmers are using the internet to increase profits by offering product services outside of selling their products to grocery stores. "In 2005, 58 percent of farms had computer access and 51 percent of farms had Internet access. Even though more than half of U.S. farms had computer and Internet access, only 31 percent of farms used computers for farm business purposes". (Rosh, 2009) As time continues to pass, more farms will use the internet because more resources are available to a farm manager through the internet. Fulton Farm Organic's currently has a webpage, but they are currently using it to promote their Farm rather than selling products over the internet.

Integrating new technology such as internet will help Fulton Farm Organic's increase profits by utilizing the internet by changing their business to include e-commerce as part of their new business strategy. As stated in an agricultural article about why farmers have yet to use the internet as a business solution, "The reasons for non-use can be quite varied, including unfamiliarity with the technology, the lack of a computer, no perceived need, and concerns about Internet connections, security, or cost." (Whitacre, 2010)

Fulton Farms might be resistant too integrating the internet into their business strategy, but it will help them create a customer base greater than what they currently have and will allow consumers to purchase their products directly from the farm instead of trying to find a local grocery store that may or may not have their product. The introduction of the internet will also provide benefits to their business like: having a global audience, 24 hour availability for consumers to view product line, inexpensive distribution of information, worldwide product advertising, online surveys for providing consumer feedback and multimedia to make the web content more interesting.

The internet can be used in so many ways to help Fulton Farms become an e-business and to enter a new market segment. "Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions." (Chaudhury, 2002)

II. BRIEF BACKGROUND

"Fulton Farms Organic is part of Fulton Farms, a family farm in Troy, OH. Fulton's has been a community institution for over 40 years, with family-friendly activities such as berry picking, a pumpkin patch, and cut-your-own Christmas trees." (Pajev, 2010) Currently Fulton Farms is offering a program called the Happy Box which provides organic food to their customers through a delivery service. Fulton Farm's currently has a webpage and a store currently at the farm in which you may purchase organic food from. Currently Fulton Farms is not an e-business and does their ordering through traditional mail.

The Happy Box is an ongoing effort to promote healthier eating by offering organic produce free of any pesticides and chemicals. The Happy Box is currently serving over 700 families in the Dayton area. The Happy Box is a box of organic produce that is delivered to their customers weekly. Fulton Farm's goal is to reach more family by promoting the Happy Box because of the belief that people who eat healthy organic produce will feel Happy.

III. CURRENT BUSINESS ISSUES

Fulton Farm's Organic's does not use the internet as a main part of their business currently. They are currently using a webpage to promote their Happy Box, but are not taking orders or payments online. Fulton Farm Organic's is staffed with eight field employees and the owners paid a web designer to develop their website. The initial cost of employing an employee who can run the website and develop a shopping cart with the option of paying online is daunting to the owners. Fulton Farm Organic's is a small farm that is looking at the cost benefits analysis of employing new employee's that can help with entering into the e-commerce market.

A recent study at the University of California stated that, "Overall, the farmers feel that Web advantages far outweigh costs, although predictably they bring costs. For example, Frog Hollow's Al Courchesne notes the "hassle factor." With a shopping cart on his site and a special order page, this site requires more administrative attention than the others. Even the less complex sites require constant attention and the more pieces to the business, the more attention the site requires.

The most significant cost associated with the Web is employee costs. Frog Hollow Farm has to have a full-time employee to manage the Web site and orders coming from it. Eatwell Farm also hires a full time employee and an additional half-time employee during the summer months for billing, ordering and bookkeeping. These employees perform other duties as well, but there is definitely a greater need for personnel with the Web/email ordering system. (Ohmart, 2002)

The Second issue is the business costs of the transactions made over the internet. Even though that these costs are not direct results of having a website, Fulton Farm Organics would have to pay for shipping, packaging and labeling. In addition to the costs, Fulton Farm Organic's would also have to provide office supplies for the services offered through the web.

Last, Fulton Farms Organic's is concerned about doing business over the web and how reliable transactions made over the web are. The concern is that customers might default on their payments and they would lose money on their invoices.

IV. PROPOSED SOLUTIONS

There are several issues that need to be addressed in reassuring Fulton Farm Organic's that using the internet is profitable for the their business. They would need to hire an IT specialist or outsource this part of their business to someone who can design and maintain a website used for ecommerce. This website would need to include some of the following: a product catalog, a shopping cart, security, feedback form, tracking