Summary
The case illustrates that the supply and availability of suitable applications was not an issue for the Wards when they decided to implement technology at their farm. However had the applications not been available, the Wards say they would not have commissioned a customised package to enhance productivity within the farm. The case illustrates that where there are value-enhancing applications available (i.e. software packages) buyers will invest irrespective of infrastructure issues such as slow connection speed or an old PC. Although the infrastructure was not state of the art, it did not impede them from investing in applications that reduced operating costs where the benefits exceeded the additional cost.
The provision of aggregate information by Fonterra enables farmers to compare productivity across the region and the industry, but where there are only two farms in the district the information is of limited use and thus farmers are mostly interested in farm specific data. The options that farmers choose are the ones that have the most utility for them. As they are mostly concerned about the operations of their farm, industry information and aggregated data is of limited value. Nonetheless, this does not discount the possibility that if new technology has the potential to reduce the time taken for other tasks (e.g. remote sensors and wireless transmission), farmers may have the time to invest in developing new ways to use this information to increase on-farm productivity. However, with present technologies and time constraints, there are higher priorities on which the scarce human resources can be productively engaged.
The Wards used family, friends and personal contacts to search for relevant software packages, as users of the application are the best advocates for the performance of the software. Although they had the ability to search on the World Wide Web which would have reduced search costs, the decision to use family and friends as advisors indicates that trust is a major factor in the decision to purchase applications. This is consistent with Locke (2002, 2003).
The case also demonstrates that, even with standard packages in a typical non-information-intensive industry, users must invest time in order learn how to use software and hardware. This learning is application-specific (Howell and Obren, 2002) rather than generic, and must be undertaken even by experienced ICT users for the benefits to accrue (Arrow, 1962; Greenwood and Yorukoglu, 1997; Atkeson and Kehoe, 2001). There is no substitute for "learning by doing" in this respect. The ways in which the Wards are examining making changes to their operations (e.g. using a farm hand to record calf data during calving) are examples of the types of complementary investment that Brynjolfsson and Hitt (2002) and Greenwood and Yorukoglu (1997) identify are necessary developments that must be undertaken before measurable productivity gains will accrue.
Furthermore, the case illustrates that benefits from the use of the Internet are derived not from the infrastructure per se, but from the applications that utilise this connectivity. Merely because applications exist, or information is available via a particular medium, it does not necessarily follow that it will be utilised unless the benefits to the end user outweigh the costs. New Internet applications must have tangible benefits to the end user in order for them to be used. Hence, the Wards use online milk testing data, as there is a tangible benefit, but do not access a lot of the other data on Fencepost.com, as it is not underpinned by a positive benefit currently, given current costs, benefits and constraints (e.g. available time). This illustrates the derived demand for access to both the Internet and specific applications available on the Internet. It also underlines the difficulties faced by organisations such as Fonterra in gaining farmer support for the use of applications that collect information that is useful to the production aspects of the business, but of limited value "on the farm", reinforcing the findings of that case study. Farmer compliance with the requirements of these systems will clearly require a significant education exercise, including reinforcing the extent of the co-operative benefit over the costs to the individual.
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