Session 1

Implementing electronic business standards

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The presenter

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Syntesa – Innovation to marketInternational consultancy bringing innovation to market.

Headquartered in Copenhagen with subsidiaries on Faroe Islands and Spain.

• Facilitate investor and grant funding• Marketing of high tech products and services• Management of innovative projects• Socio-economic analysis and impact assessments

Our work is based on a hands-on approach providing expertise in financing, marketing, management and business development.

Co-founder of TraceCore XMLInitiator of www.foodtraceability.euEnterprise system provider for TRACE, Europe’s largest traceability project. Technical lead of traceability projects in SE Asia, Middle East and Europe. Specialities in using traceability for sustainability monitoring and standard compliance.

Dr Heiner Lehr, a decade of traceability

EcoFishManALL-SMART-PIGSEU-PLFBenthisMacro BiotechCostal Fishing inthe North AtlanticWhiteFishMaLL

THE IMPORTANCE OF ELECTRONIC BUSINESS STANDARDS

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Role of technology in growth

“It is undebatable that technology makes production processes more efficient, thereby increasing the competitiveness of countries and reducing their vulnerability to market fluctuations. Structural change, i.e. the transition from a labour-intensive to a technology-intensive economy, drives economic upgrading. Low income countries thus acquire the necessary capabilities to catch up and reduce the gap with per capita incomes in high income countries.”

LI Yong, Director General, UNIDO

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Src: UNIDO

Technology and capital equipment are the main drivers of […] aggregate growth in developed and developing countries […]. From: Key messages, Industrial Development Report 2016, UNIDO

The smarter food vision

smarter food

inclusivesafe

transparent70% of food globally is produced by smallholders, most of which are excluded from the global food chain. Information technology is used to integrate small-holders in international supply chains.

Consumers want to make informed choice of the food they buy for religious, environmental or health reasons or simply for preference. Traceable food is food of which information is recorded along its elaboration process. Consumers can access such information and eat in accordance to their needs.

Food has to be safe to produce and safe to consume. Safe food uses information technology to improve controls over environ-mental and social impact of its production as well as its safety to be consumed.

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Information is not equal information

Paper-based systems

• Easy to implement

• Time resilient

• Not scalable; limited by capacity of personnel and physical transportation

• Cannot be re-used

• Usually not accessible; filed in physical location

• Information chains impossible to construct

• Library of Congress

Paperless systems

• Require technical capacity

• Subject to data format compatibility issues

• More scalable; can be (semi)automated

• Easy to copy and exchange; no transportation time

• Easily accessible

• An information chain can be established

• Google

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Paperless systems require standards

• “A standard is a set of agreed rules and guidelines for common and repeated use for a particular, pre-defined, purpose. It needs to lay down a solid and equitable foundation for the global exchange of goods and services, incorporating all the key elements required by market and societal forces.” (Quote from ISO definition)

• Standards ensure clarity of understanding as well as reduce and remove ambiguity

• The widespread use of a chosen standard results in

– reduced total cost of ownership (TCO) due to less customisation and sharing of ongoing costs

– improving business processes, such as those within a supply chain

– reduced cycle times and potentially reduced inventory

– Less errors and fraud

– Increased business opportunities

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What are information standards for?

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• The same fish can be sold under any number of names around the world, leading to – Trade issues

– Economic fraud

– (potentially) health hazards

• For instance, Patagonian toothfish, is known – in the U.S. as Chilean sea bass (although it isn’t a bass),

– In Argentina and Uruguay as Merluza negra

– in Chile as Bacalao,

– in Japan as Mero,

– in France as Légine australe,

– in Portugal as Marlonga-negra, and

– in Sweden as Tandnoting.

• Standard: – Latin species name Dissostichus eleginoides

– FAO species list with taxonomic code

Example: mislabelling of fish

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Src: Thisfish

OVERVIEW OVER eBUSINESS STANDARDS FOR AGRICULTURAL TRADE

Implementing electronic business standards

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Complex relationships warrant complex standard ecosphere

Originating country

Public authority

Private business

CitizensConsumers

Receiving country

Public authority

Private business

CitizensConsumers

G2G

B2B

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Standard levels

Procedural standards

• What information is important to store/transport

Information exchange standards

• How to transport information

Semantic standards

• How to name information elements

Syntactic standards

• How store information

Application in agrifood information management

Food standards

• E.g. on food safety (ISO22000) or sustainability (RSPO)

IT standards for exchanging information

• E.g. EPCIS, UML and parts of ebXML

Semantic standards

• For fish e.g. ISO 12875:2011

Syntactic standards

• TraceCore, UNeDocs, EDIFACT and derivatives

Standard level/type

NB: General trade-off between ease of application and specificity of a standard set. Generic standards have a tendency to be too abstract and more specific standard sets create interface problems between different subsectors (e.g. fish standards not applicable to dairy production.

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Examples of procedural standards for food safety

• Codex Alimentarius

– International reference standards for consumer protection and food safety, used as the legal basisof international trade

– Joint effort of the FAO and WHO

• ISO 22000 family

– Family of voluntary industry standards on food safety

– Main building block HACCP (includes traceability)

– Recognised by GSFI

• GlobalGAP (and similar efforts BRC, IFS etc)

– Buyer-driven private standards

– Based on general principles and ideas of international food standards

– Application-oriented with the aim to be practical

– Often include a general traceability requirement

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Technical standards

Trade Facilitation Implementation Guide

tfig.unece.org/contents/intro-domain-ebs.htm

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Information exchange

Information exchange standard

Semantic standard

Semantic standard

Syntactic standard

Syntactic standard

eBusiness standards

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• Electronic Management and Exchange of Sanitary and Phytosanitary Certificates

• Main outcomes: Safe and legal imports and/or exports, less fraud

• Goal: Improved trade eSPS• Electronic Management and Exchange of Fishery Information

• Main outcomes: Better control of fish resource, better stock assessment, legal fishing

• Goal: Sustainable marine resourcesFLUX

• Track and Trace for Animal and Fish

• Main outcomes: Reduced risk, better statistics

• Goal: Safe food production, healthy animals and fishT&T

• Electronic Management and Exchange of Laboratory Analysis Information

• Main outcomes: increased safety of agricultural goods, increased efficiency of laboratory analysis process, statistics

• Goal: Safer food, healthier plants and animalseLAB

• Electronic Management and Exchange of CITES permits and certificates

• Main outcomes: Safe and legal imports and exports, less fraud

• Goal: Improved tradeeCITES

THE PROCESS

Implementing electronic business standards

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The process

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Creation of brief for key decision makers and securing of funding for feasibility study

Feasibility study

Obtaining buy-in from key stakeholders

Securing funding for pilot

Specification of pilot

Piloting

Evaluation of the pilot and changes to specification

Elaboration of rollout plan

Rollout

Creation of brief for key decision makers and securing of funding for feasibility study

• Buy-in from key policy makers for the implementation of eBusiness solutions in any area is absolute key for success. – Without strong support of key decision makers, the implementation process is very likely

to fail.

• Obtaining the buy-in is achieved in three steps:– Clear and focused briefing highlighting the benefits, costs and risks of implementing the

eBusiness solutions. • The aim of the briefing is to obtain a green light/funding for a feasibility study

– A feasibility study that puts a potential project into the context of the country taking into consideration the existing ICT infrastructure, motivation of stakeholders to implement the eBusiness solution and other realities of the country. • Leads to a general solution layout with an associated socio-economic cost benefit analysis and a

concrete implementation proposal for a significant pilot project.

• The aim of the feasibility study is to obtain green light to search for funding of a pilot project.

– Review of the implementation of the pilot project to validate the findings of the initial cost-benefit analysis and feedback of the stakeholders that participated in the pilot.

• The results of the pilot project should be clear enough to make a decision for a complete rollout. Funding sources will have to be identified.

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Feasibility study

• Study the eBusiness area in the local context, make a high-level design for a national solution, conduct a socio-economic cost benefit analysis for this solution and design a pilot project that is significant enough to confirm the empirical cost-benefit analysis.

• Should include a stakeholder analysis of the eBusiness standard area under consideration. It is essential to involve core stakeholders in the feasibility study, both for the design as well as a source for data related to the socio-economic cost-benefit analysis.

• The feasibility study has the following components:– Needs assessment and identification of key benefits of a potential solution.

– Business process analysis

– Process simplification

– Stakeholder consultation and value analysis for core stakeholders

– Legal reform: Legal support for the implementation of new technologies and business processes may be required. • E.g. confidentiality of data, Equivalence of electronic with physical documents, re-definitions of an

“original” document.

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Obtaining buy-in from key stakeholders

• If the feasibility study concludes that implementation is feasible, the next step is to obtain buy-in from key stakeholders to support a pilot implementation. The buy-in should be achieved on the basis of the value proposition developed in the feasibility study.

• It is also good practice to establish a Steering Committee or similar body for later stages in the process.

• The Steering Committee can act as an interim management organisation of the eBusiness standard implementation before that is transferred to its final public or private owner.

• Participation and buy-in of the private sector is as essential as the buy-in from the public sector.

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Securing funding for pilot

• Before a national rollout, it is good practice to pilot the implementation of the eBusiness standard.

• The objective of the pilot is to– Test the general solution under realistic conditions

– Obtain data for an improved cost-benefit analysis

– Test the buy-in of stakeholders

• A pilot should have the following characteristics:– Be limited in scope of functionality (essential items only), while being significant enough to

provide an indication whether the earlier socio-economic cost-benefit analysis is realistic

– Balance the number of involved parties between the desire to limit early access but also the need to test the system under realistic conditions

– Determine the value proposition for the final solution

– Often good practice to limit pilots geographically and use implementation sites that are easily accessible

– Pilots should be short in time to prevent users to rely on a preliminary solution.

• The scope and functionality of the pilot project must be specified in detail, to secure the appropriate funding.

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Specification and implementation of pilot project

• The implementation strategy of the pilot should foresee that functionality is implemented step-by-step with the option for improvement along the development path.

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A good model to plan and implement the pilot project is the “spiral model”: The spiral model has four phases: Planning, Risk Analysis, Engineering and Evaluation. A project repeatedly passes through these phases in iterations (called spirals in this model). The essential element is that the specification is improved over the iterations based on feedback from the users of the system.

Implementation of the pilot

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Evaluation of the pilot and changes to specification

• It is good practice to carry out interviews to – validate the value proposition,

– assess the solution,

– capture suggestions for further improvements,

– discuss the financial sustainability

• Choice experiments and analyses of Willingness-to-Pay or Willingness-to-Accept are typical socio-economical tools to assess the costs and benefits of a solution.

• It is important that the baseline situation has been captured before the pilot to allow proper socio-economic cost-benefit analysis.

• Based on interviews of stakeholders, socio-economic cost-benefit analysis and general information about the pilot, a recommendation should be made to policy makers whether to proceed with a full-scale rollout or not.

• If the decision is positive, the specification of the rollout version must be drafted and agreed.

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Elaboration of rollout plan

• It is important to develop a plan for the full rollout. This plan should contain at least the following elements

– Resource plan

– Staged rollout e.g. based on geography (if applicable)

– Training plan for stakeholders (Government officials and private sector participants)

– Dissemination plan for the private sector and where applicable the general public

– Support plan

– Governance transition plan, in case the full system will transition e.g. from the Steering Committee to a private or public entity

• The rollout plan together with the final specification of the full version can then be used to secure funds for the full roll-out.

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Rollout

• In the final step, the rollout plan is executed, monitoring closely resources used to stay within the resource plan.

• It is good practice to provide a two-tiered support system via email and phone. Support requests should be analysed regularly and fed back to the development team in order to improve the specification of the system and increase its acceptability.

• It is also good practice to conduct another socio-economic cost-benefit analysis after 12 or 18 months of full operation in order to gauge the real impact of the eBusiness system and potentially justify further investment in the system.

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Keys to success

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• First focus on what the need is, then figure out how to satisfy it.

• Listen to stakeholders and understand where the real problems and needs lie. Try to give users greater control over how they use the resulting services.

• Keep the solution simple – in both the technology and the service offering.

• Plan for the future not the now.

Src: FAO. 2013.

Acknowledgements

These training materials were developed under the general supervision of Ms Virginia Cram-Martos, Director of the Economic Cooperation and Trade Division of the Economic Commission for Europe (UNECE) and Ms Susan Stone, Director, Trade and Investment Division (TID), United Nations, Economic and Social Commission for Asia and the Pacific (ESCAP). It was prepared by Heiner Lehr, Syntesa, under the guidance of Yann Duval, Chief, Trade Facilitation Unit, TID, ESCAP, Markus Pikart, Economics Affairs Officer, United Nations Economic Commission for Europe (UNECE), Trade and Sustainable Land Management Division and Frans van Diepen, Coordinator agriculture UN/CEFACT, Netherlands Enterprise Agency, Ministry of Economic Affairs.

This handbook would have been impossible without the support of quite a number of individuals. The main contributors were: Mr. Johan den Engelse, President FrugIcom, Den Haag, the Netherlands; Mr. Conny Graumans, Manager AgroConnect, Zwolle, the Netherlands; Mr. Drasko Pavlovic, Market Access Counsellor (E-cert), Regulations and Assurance Branch, Ministry for Primary Industries, Wellington, New Zealand; Mr. Barbara Cooper, Acting Assistant Secretary, Meat Exports Branch, Canberra, Australia; Mr. Francis Lopez, President, InterCommerce Network Services, Makati City, the Philippines; Mr Franky Callewaert and Mr Eric Honoré, Directorate General for Maritime Affairs and Fisheries, MARE D4 - Integrated Fisheries Data Management, Brussels, Belgium.

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Thank you for your attention!

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DISCLAIMER: this presentation expresses the view of the presenter only. In particular, it does not express necessarily the views of citedinternational bodies and firms.