The Total Economic Impact™ Of Cropin Technology Solutions
Cost Savings And Business Benefits Enabled By Cropin Technology Solutions
A Forrester Total Economic Impact™ Study Commissioned By Cropin Technology Solutions, December 2024
The agricultural sector is industry that is most easily impacted from external factors like climate change, food security, and financial inclusion. From a business standpoint, organizations managing seed production and food production are in turn unable to protect yields and outcomes appropriately due to a lack of predictability and proactive management of their crops.
Cropin is a global agriculture ecosystem intelligence provider that aims to solve these challenges with its interconnected data platform, by helping agricultural providers make better decisions with real-time data and insights and accelerate their journey toward digital transformation.
Cropin commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Cropin Technology Solutions.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Cropin Technology Solutions on their organizations.
Return on investment (ROI)
161%161%
Net present value (NPV)
$2.4M$2.4M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Cropin Technology Solutions. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that represents a seed production and food processing organization with a revenue of $40 billion per year.
expects to pilot the Cropin Technology solutions for 0 hectares with 0 agronomists. The weighted average yield per hectare across the crop(s) (in metric tons) is 0 with a weighted average selling price of the crop(s) in USD per metric ton of $0. Custom results are based on user inputs and the TEI case study.
Interviewees said that prior to using Cropin Technology Solutions, they were at their nascency in driving digitization and data-driven processes in crop management. Organizations primarily relied on spreadsheets or manual data recording efforts, but these methods led to disjointed data capture and storage, uncoordinated efforts, and an incomplete view of seed operations and farming yield. Interviewees noted that inadequacies in data practices caused their organization to have limited predictive capabilities in terms of weather and pest outbreaks.
After investing in Cropin Technology Solutions, interviewees were able to digitize data collection process, and thus establish visibility and predictability in their operations. Interviewees noted that an improved efficiency in data collection ultimately allowed their organizations to begin activating the data for better supply and demand forecasting, enhance yield quality, and better manage the impending concerns around food security and climate risks as intended.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Improved data collection efficiency in crop stage evaluations by 90%. Having a consolidated platform to store and manage data on crop evaluations reduces the time farm managers need to gather and report on crop insights from 120 hours to 70 hours. Given the scale and hectarage the composite organization manages, this brings a three-year benefit of $2.1 million.
For , this benefit might be worth over three years.
- Reduced profit losses due to improved supply and demand forecasting. Better management of data on crop inventory avoids overstocking or understocking of produce. This prevents losses from inaccurate forecasting of up to $1.6 million across a three-year period.
For , this benefit might be worth over three years.
- Incremental profits of up to $240,000 with improved visibility on yield quality. Having a greater visibility of crop yields allows farmers and farm managers to better negotiate on pricing of their crops, providing pricing accuracy and improving the livelihood of farmers. This enables incremental profits that reach $241,000 over a three-year period.
For , this benefit might be worth over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Better adherence to compliance. Cropin provides an easy reference of necessary certifications and compliance records that the composite organization has to stay ahead of.
- Upholding of labor and human rights. Cropin proactively manages and streamlines audits of growers and farmers employed at the fields to ensure they comply with guidelines set against child labor and minimum wages.
- Sustainable and responsible sourcing. Using Cropin Technology Solutions ensures the composite organization is engaging with their sustainability goals with a clear management of their value-chain, as Cropin audits the data-driven management process of sustainably sourcing suppliers.
- Improvement of farmers livelihood. Building a data-driven, predictive, and intelligent management of crop yields helps seed and farming producers as well as the farmers they engage on a contractual basis. This helps to drive more transparent pricing and incremental revenue that improve their livelihoods more effectively.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Onetime implementation cost. These costs include fees for set up, defining data processes, and implementation with the Cropin team and the composite organization’s core stakeholders. This report estimates an implementation cost of $126,000 across a three-year period.
For , these costs could represent over three years.
- Annual licensing and servicing costs. This report assumes a total of 270 users who require licenses, with the cost per user-based license estimated at $650 annually. On top of this, the composite incurs recurring annual professional services fees that amount to $818,000 by Year 3.
For , these costs could represent over three years.
- Annual internal solution maintenance costs. The solution requires five project managers and five developers spending an average of 300 hours each on maintenance. The annual costs related to this amount to $524,000 across a three-year period.
For , these costs could represent over three years.
- Onetime internal training cost. Once Cropin has been deployed, each user is allocated an average of 10 hours for a one-time training on use of the solution. With 240 farm managers and 30 agronomists who require internal training, the cost for internal training totals $38,000.
For , these costs could represent over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $3.9 million over three years versus costs of $1.5 million, adding up to a net present value (NPV) of $2.4 million and an ROI of 161%.
might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of .
Key Statistics
-
Return on investment (ROI)
161%161%
-
Benefits PV
$3.9M$3.9M
-
Net present value (NPV)
$2.4M$2.4M
-
Payback
<6 months<6 months
Benefits (Three-Year)
Improved data collection efficiency in crop stage evaluations Reduced profit losses due to improved supply and demand forecasting Incremental profit opportunities due to the improved visibility of yield quality
TEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Cropin Technology Solutions.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Cropin Technology Solutions can have on an organization.
-
Due Diligence
Interviewed Cropin stakeholders and Forrester analysts to gather data relative to Cropin Technology Solutions.
-
Interviews
Interviewed five representatives at four organizations using Cropin Technology Solutions to obtain data about costs, benefits, and risks.
-
Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
-
Financial Model Framework
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
-
Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Disclosures
Readers should be aware of the following:
This study is commissioned by Cropin and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Cropin Technology Solutions. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with Cropin Technology Solutions based on the inputs provided and any assumptions made. Forrester does not endorse Cropin or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Cropin and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and Cropin make no warranties of any kind.
Cropin reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Cropin provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Amelia Lau, Tamira Lee
Drivers leading to the Cropin Technology Solutions investment
Interviews
| Role | Industry | Region | Number of employees |
|---|---|---|---|
| Smart farming project manager, Business developer |
Seed production | The Netherlands | 112,000 |
| Associate director, digitization and automation | Food processing | US | 2,200 |
| Director of agriculture | Food processing | Canada | 318,000 |
| Head of production | Seed production | Germany | 20,000 |
Key Challenges
The interviewees noted how their organizations struggled with common challenges, including:
- Fragmented data capture and storage. Interviewees discussed the challenges related to managing different aspects of farming operations, that are often stored in separate systems or files. This disconnection led to uncoordinated efforts, affecting the overall efficiency of farming operations.
- Lack of real-time updates on yield/harvest. Interviewees reported several challenges related to having an incomplete visibility of farming and seed operations. Delays in recording pest and disease incidences often led to export certification delays and inaccurate yield estimation. Additionally, the difficulty in scaling operations to other locations and reviewing past seasons was a significant issue.
- Limited predictive capabilities. Interviewees spoke about challenges in their ability to forecast weather patterns, pest outbreaks, or market demands accurately. This gap led to missed opportunities to optimize planting schedules, pest control measures, and marketing strategies.
Solution Requirements/Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Streamline data collection process. Interviewees spoke about how Cropin Technology Solutions enable them to digitize field data, reduce manual recordkeeping, and facilitate real-time data collection.
- Enhanced visibility and integrated data management. Interviewees noted how Cropin provides a centralized platform where farming data can be captured in real time. The head of production from a seed production company said: “We have a dashboard where all data comes in and is presented in a way where it is critical to take action. It is very easy to look back and better anticipate issues for the next season.”
- Enabling predictive intelligence and forecasting capabilities. Interviewees expressed anticipation for Cropin’s ability to provide forecasts on weather disruptions, disease outbreaks, and crop health issues. This helps farmers adopt best practices and maximize output while mitigating potential losses in harvest and seeds.
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the five interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The organization has a global operation, with over 120,000 employees across Germany, US, and The Netherlands. Its core capabilities mainly encompass seed production and food processing, and it generates $40 billion of revenue annually. In the seed production division, seed varieties are developed and selected through the careful planting, management, and cultivation of crops. In the food processing division, the organization partners closely with farmers to purchase the raw agricultural products needed for its operation. The organization manages a total of 25,000 hectares of crops across both divisions, with a weighted average selling price of crops per metric ton to be $2,007 in Year 1.
expects to pilot the Cropin Technology solutions for 0 hectares with 0 agronomists. The weighted average yield per hectare across the crop(s) (in metric tons) is 0 with a weighted average selling price of the crop(s) in USD per metric ton of $0.
Deployment characteristics. The composite organization deploys Cropin Technology Solutions to 270 users globally, primarily agronomists and farm managers. Farm managers use the solutions to gather crop information across different plantations, while agronomists use them to gather and report crop stage insights from farm managers.
Quantified benefit data as applied to the composite
The following table shows custom results for .
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Improved data collection efficiency in crop stage evaluations | $836,604 $836,604 | $836,604 $836,604 | $836,604 $836,604 | $2,509,812 $2,509,812 | $2,080,510 $2,080,510 |
| Btr | Reduced profit losses due to improved supply and demand forecasting | $648,261 $648,261 | $648,261 $648,261 | $648,261 $648,261 | $1,944,783 $1,944,783 | $1,612,129 $1,612,129 |
| Ctr | Incremental profit opportunities due to the improved visibility of yield quality | $96,900 $96,900 | $96,900 $96,900 | $96,900 $96,900 | $290,700 $290,700 | $240,976 $240,976 |
| Total benefits (risk-adjusted) | $1,581,765 $1,581,765 | $1,581,765 $1,581,765 | $1,581,765 $1,581,765 | $4,745,295 $4,745,295 | $3,933,615 $3,933,615 | |
Improved Data Collection Efficiency In Crop Stage Evaluations
Evidence and data. Prior to adopting Cropin Technology Solutions, interviewees highlighted the challenges in data collection during crop stage evaluation for agronomists and farm managers. They noted that agronomists and farm managers primarily relied on manual tracking tools such as pen and paper, spreadsheets, and siloed enterprise resource planning (ERP) systems. This was particularly challenging with data collection occurring across various crop growth stages, often in remote and isolated areas. The need to transfer and consolidate data across these disparate systems was time-consuming and prone to inconsistencies. Additionally, there was a lack of visibility regarding seed production, and timely updates on yield were unclear. The lack of standardization in data collection during the manual process often led to inconsistencies.
Cropin Technology Solutions equipped interviewees with a unified system that streamlined data collection during crop stage evaluations. Interviewees highlighted how the digital data collection process allowed agronomists and farm managers to easily capture information through their devices without relying on manual forms. Data can now be stored and accessed within a centralized system, which allowed for faster data processing and minimal audit errors. Crop stage evaluation data was consolidated across the different farms and systems with standardized categorization, thus eliminating the chance of a manual error.
- The director of agriculture in the food processing organization remarked how Cropin was able to consolidate and organize the crop data collected during field visits, which ensured a greater quality of data captured. Post-harvest analysis of farming practices was now made possible, allowing for the improvement of the quantity and quality of the yield.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- It requires 30 agronomists during crop stage evaluation annually.
- It requires 2,000 farmer managers are required during crop stage evaluation annually.
- Of all farm managers required during crop stage evaluation, 12% are using Cropin Technology Solution across Year 1 to Year 3.
- Before using Cropin Technology Solutions, each agronomist spends 60 hours annually gathering and reporting crop stage insights from farm managers. After implementing Cropin Technology Solutions, each agronomist is now spending 6 hours per year doing the same.
- Before using Cropin Technology Solution, each farm manager spends 120 hours annually consolidating information manually during crop stage evaluation. After implementing Cropin Technology Solutions, each farm manager is now spending 70 hours per year doing the same.
- The average fully burdened hourly salary of an agronomist is $42.
- The average fully burdened hourly salary of a farm manager is $8.
- The productivity recapture rate, or the percentage of the total time saved that is actually used by agronomists and farm managers to drive value, is 50%.
Risks. The benefit tied to time savings from data collections in crop stage evaluations may differ to those presented in the financial model due to the variances in the:
- Number of agronomists and farm managers required during crop stage evaluations.
- Usage of Cropin Technology solution during crop stage evaluations.
- Fully burdened salaries of agronomists and farm managers.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.1 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Improved Data Collection Efficiency In Crop Stage Evaluations
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Agronomists required during crop stage evaluation | CompositeComposite | 3030 | 3030 | 3030 |
| A2 | Monthly time spent per agronomist to gather and report crop stage insights from farm managers prior to Cropin Technology Solutions (hours) | Interviews | 6060 | 6060 | 6060 |
| A3 | Monthly time spent per agronomist to gather and report crop stage insights from farm managers after implementing Cropin Technology Solutions (hours) | Interviews | 66 | 66 | 66 |
| A4 | Monthly time saved per agronomist to gather and report crop stage insights from farm managers after implementing Cropin Technology Solutions (hours) | A2-A3 | 5454 | 5454 | 5454 |
| A5 | Annual time saved per agronomist to gather and report crop stage insights from farm managers after implementing Cropin Technology Solutions (hours) | A1*A4*12 | 19,44019,440 | 19,44019,440 | 19,44019,440 |
| A6 | Average fully burdened hourly salary of an agronomist | TEI standard | $42 $42 | $42 $42 | $42 $42 |
| A7 | Farm managers required during crop stage evaluation | CompositeScaled for | 2,0002,000 | 2,0002,000 | 2,0002,000 |
| A8 | Percentage of farm managers using Cropin Technology Solutions | CompositeTEI case study | 12%12% | 12%12% | 12%12% |
| A9 | Farm managers required during crop stage evaluation who are using Cropin Technology Solutions | A7*A8 | 240240 | 240240 | 240240 |
| A10 | Monthly time spent per farm manager to consolidate information manually during crop stage evaluation prior to Cropin Technology Solutions (hours) | CompositeTEI case study | 120120 | 120120 | 120120 |
| A11 | Monthly time spent per farm manager to consolidate information during crop stage evaluation per month after implementing Cropin Technology Solutions (hours) | CompositeTEI case study | 7070 | 7070 | 7070 |
| A12 | Monthly time saved per farm manager to consolidate information during crop stage evaluation after implementing Cropin Technology Solutions (hours) | A10-A11 | 5050 | 5050 | 5050 |
| A13 | Annual time saved per farm manager to consolidate information during crop stage evaluation after implementing Cropin Technology Solutions (hours) | A9*A12*12 | 144,000144,000 | 144,000144,000 | 144,000144,000 |
| A14 | Average fully burdened hourly salary of a farm manager | TEI standard: | $8 $8 | $8 $8 | $8 $8 |
| A15 | Productivity recapture rate | TEI standard | 50%50% | 50%50% | 50%50% |
| At | Improved data collection efficiency in crop stage evaluations | ((A5*A6)+ (A13*A14))*A15 | $984,240 $984,240 | $984,240 $984,240 | $984,240 $984,240 |
| Risk adjustment | ↓15% | ||||
| Atr | Improved data collection efficiency in crop stage evaluations (risk-adjusted) | $836,604 $836,604 | $836,604 $836,604 | $836,604 $836,604 | |
| Three-year total: $2,509,812 $2,509,812 | Three-year present value: $2,080,510 $2,080,510 | ||||
Reduced Profit Losses Due To Improved Supply And Demand Forecasting
Evidence and data. The ability to collect data and enable data-driven decision-making has allowed for near real-time tracking of crop performance and data monitoring. Interviewees spoke about how this allowed for greater insights into production trends and potential yields.
- The director of agriculture in the food processing organization noted how their organization’s agronomists were able to gain visibility of the planting activities on the ground, alerting farm managers to take corrective measures to ensure crop growth, ultimately reducing loss and improving supply chain efficiency.
- The head of production in a seed production organization noted anecdotally that their organization had incurred a loss estimated at 20% of their production in a specific market, where inaccurate estimates led them to believe they would have lower production than required. This triggered external buying to fill the gap, which in turn resulted in excess supply when the yields were greater than initially forecasted.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- It assumes a total of $763 million of annual revenue generated from crop sales in Year 1.
- The percentage of annual revenue loss due to inaccurate supply and demand forecasting before Cropin Technology Solutions is 10%.
- The percentage of annual revenue loss due to inaccurate supply and demand forecasting after implementing Cropin Technology Solutions is 9% across Year 1 to Year 3.
- The composite’s operating margin was estimated at 10% across Year 1 to Year 3.
Risks. The benefit of reduced profit losses due improved supply and demand forecasting can vary across organizations due to the differences in the:
- Total annual revenue generated from crop sales.
- External factors such as macroeconomic shifts and natural disasters that affect the percentage of annual revenue loss due to overstock and understock of produce.2
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.6 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Reduced Profit Losses Due To Improved Supply And Demand Forecasting
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | ||||
|---|---|---|---|---|---|---|---|---|---|
| B1 | Total crops (hectares) | CompositeComposite | 25,00025,000 | 25,00025,000 | 25,00025,000 | ||||
| B2 | Weighted average yield per hectare across mixed crops (in metric tons) | CompositeComposite | 15.215.2 | 15.215.2 | 15.215.2 | ||||
| B3 | Weighted average selling price of crops before Cropin Technology Solutions (USD per metric ton) | CompositeComposite | $2,007 $2,007 | $2,007 $2,007 | $2,007 $2,007 | ||||
| B4 | Total annual revenue generated from crop sales | B1*B2*B3 | $762,660,000 $762,660,000 | $762,660,000 $762,660,000 | $762,660,000 $762,660,000 | ||||
| B5 | Percentage annual revenue loss due to overstock and understock of produce before Cropin Technology Solutions | Interviews | 10%10% | 10%10% | 10%10% | ||||
| B6 | Total annual revenue loss due to inaccurate supply and demand forecasting before Cropin Technology Solutions | B4*B5 | $76,266,000 $76,266,000 | $76,266,000 $76,266,000 | $76,266,000 $76,266,000 | ||||
| B7 | Percentage of annual revenue loss due to overstock and understock of produce after implementing Cropin Technology solutions | Interviews | 9%9% | 9%9% | 9%9% | ||||
| B8 | Total annual revenue loss due to inaccurate supply and demand forecasting after implementing Cropin Technology solutions | B4*B7 | $68,639,400 $68,639,400 | $68,639,400 $68,639,400 | $68,639,400 $68,639,400 | ||||
| B9 | Operating margin | TEI standard | 10%10% | 10%10% | 10%10% | ||||
| Bt | Reduced profit losses due to improved supply and demand forecasting | (B7-B9)*B10 | $762,660 $762,660 | $762,660 $762,660 | $762,660 $762,660 | ||||
| Risk adjustment | ↓15% | ||||||||
| Btr | Reduced profit losses due to improved supply and demand forecasting (risk-adjusted) | $648,261 $648,261 | $648,261 $648,261 | $648,261 $648,261 | |||||
| Three-year total: $1,944,783 $1,944,783 | Three-year present value: $1,612,129 $1,612,129 | ||||||||
Incremental Profit Opportunities Due To The Improved Visibility Of Yield Quality
Evidence and data. Cropin Technology Solutions provide access to real-time farm data management dashboards and reports. Interviewees stated that this allowed their organizations to monitor and measure crop health and yield estimation. By leveraging Cropin Technology Solutions, farm managers at these organizations were empowered to take preemptive actions related to crop health, such as sharing advice with farmers on the usage of pesticides when needed. As a result, interviewees reported that they expect yield quality to improve — thereby creating incremental profit opportunities for farmers who are better positioned to negotiate for crop prices that are reflective of the enhanced yield quality.
The business developer at a seed production company said: “Because we have greater visibility thanks to Cropin, we can use that information to be there at an earlier stage to prevent less damage to crops. In the end, that gives us more seeds [that are] of a better quality.”
The associate director of digitization and automation at a food processing company added: “Blight is an important challenge to address early. By having visibility and understanding what the gaps and the best practices that they can adhere in terms of their overall agronomy are, farmers can increase both the quantity and quality of their yields.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- It manages crops across 25,000 hectares, which yields an average of 380,000 metric tons of crops (e.g., tomatoes, potatoes, carrots, and corn) annually.
- Prior to using Cropin Technology Solutions, the weighted average selling price of crops was $2,007 per metric ton.
- With Cropin Technology Solutions, the weighted average selling price per metric ton increases by 0.15% over Year 1 to Year 3 due to the improved visibility of yield quality.
Risks. The exact benefit realized by an organization can vary, depending on factors such as:
- The size of the organization and its composition of crop production.
- The organization’s industry, market, and competitive landscape, which can impact the propensity of farmers to negotiate crop prices based on variable quality.
- Macroeconomic conditions that can impact average selling prices.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $241,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Incremental Profit Opportunities Due To The Improved Visibility Of Yield Quality
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Weighted average selling price of crops per metric ton before Cropin Technology Solutions | CompositeComposite | $2,007 $2,007 | $2,007 $2,007 | $2,007 $2,007 | |
| C2 | Percentage increase in selling price of crops per metric ton after implementing Cropin Technology Solutions | CompositeTEI case study | 0.15%0.15% | 0.15%0.15% | 0.15%0.15% | |
| C3 | Weighted average selling price of crops per metric ton after implementing Cropin Technology Solutions | C1*C2 | $2,010 $2,010 | $2,010 $2,010 | $2,010 $2,010 | |
| C4 | Average volume of crops sold annually (in metric tons) | B1*B2 | 380,000380,000 | 380,000380,000 | 380,000380,000 | |
| C5 | Total annual revenue for crop sales before Cropin Technology Solutions | C1*C4 | $762,660,000 $762,660,000 | $762,660,000 $762,660,000 | $762,660,000 $762,660,000 | |
| C6 | Total annual revenue for crop sales after implementing Cropin Technology Solutions | C3*C4 | $763,800,000 $763,800,000 | $763,800,000 $763,800,000 | $763,800,000 $763,800,000 | |
| C7 | Operating margin | TEI standard | 10%10% | 10%10% | 10%10% | |
| Ct | Incremental profit opportunities due to the improved visibility of yield quality | (C6-C5)*C7 | $114,000 $114,000 | $114,000 $114,000 | $114,000 $114,000 | |
| Risk adjustment | ↓15% | |||||
| Ctr | Incremental profit opportunities due to the improved visibility of yield quality (risk-adjusted) | $96,900 $96,900 | $96,900 $96,900 | $96,900 $96,900 | ||
| Three-year total: $290,700 $290,700 | Three-year present value: $240,976 $240,976 | |||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Better adherence to compliance. Cropin provided an easy reference of necessary certifications and compliance records that the composite organization had to stay ahead of. These records were essential to export the composite organization’s products in a timely manner.
- Upholding of labor and human rights. Ensuring audits of growers and farmers who are employed at the fields comply with guidelines set against child labor and minimum wages was more streamlined and proactively managed with Cropin.
- Sustainable and responsible sourcing. Data-driven management of sustainable sourcing of suppliers was audited with the use of Cropin, ensuring that the composite organization is engaging with their sustainability goals with a clear management of their value-chain.
- Improvement of farmers livelihood. Building a data-driven, predictive and intelligent management of crop yields not only helps seed and farming producers, but also the farmers they engage on a contractual basis. This helps to drive more transparent pricing and incremental revenue that improve their livelihood more effectively.
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Cropin Technology Solutions and later realize additional uses and business opportunities, including:
- Data agility. Cropin’s technology capabilities integrate and activate a vast amount of data from various sources and systems, allowing organizations to gain a comprehensive understanding of their farming operations. This agile approach has allowed interviewees to quickly identify and learn from best practices, and continuously refine their practices for future seasons. This provides organizations with the flexibility to efficiently scale their visibility and capabilities within their farming operations.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Quantified cost data as applied to the composite
The following table shows custom results for .
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Dtr | Onetime implementation cost | $126,000 $126,000 | $0 $0 | $0 $0 | $0 $0 | $126,000 $126,000 | $126,000 $126,000 |
| Etr | Annual licensing and professional services costs | $0 $0 | $326,520 $326,520 | $328,920 $328,920 | $331,320 $331,320 | $986,760 $986,760 | $817,597 $817,597 |
| Ftr | Annual internal solution maintenance costs | $0 $0 | $210,600 $210,600 | $210,600 $210,600 | $210,600 $210,600 | $631,800 $631,800 | $523,731 $523,731 |
| Gtr | Onetime internal training cost | $38,160 $38,160 | $0 $0 | $0 $0 | $0 $0 | $38,160 $38,160 | $38,160 $38,160 |
| Total costs (risk-adjusted) | $164,160 $164,160 | $537,120 $537,120 | $539,520 $539,520 | $541,920 $541,920 | $1,782,720 $1,782,720 | $1,505,488 $1,505,488 | |
Onetime Implementation Cost
Evidence and data. Onetime implementation costs for Cropin Technology Solutions typically include costs for set up, defining data processes, and implementation with the Cropin team and the composite organization’s core stakeholders. The implementation fees are dependent on the organization’s use cases and features.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The implementation cost is $126,000 across a three-year period.
Risks. The exact cost and time invested by an organization can vary, depending on factors such as:
- The complexity of the organization’s tech stack and scale of deployment.
- The expectations to which capabilities and functionalities need to be set up immediately as opposed to being set up progressively over time.
Results. To account for these risks, Forrester adjusted this cost upward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $126,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Onetime Implementation Cost
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| D1 | Onetime implementation costs | CompositeEstimate for | $105,000 $105,000 | |||
| Dt | Onetime implementation costs | D1 | $105,000 $105,000 | $0 $0 | $0 $0 | $0 $0 |
| Risk adjustment | ↑20% | |||||
| Dtr | Onetime implementation costs (risk-adjusted) | $126,000 $126,000 | $0 $0 | $0 $0 | $0 $0 | |
| Three-year total: $126,000 $126,000 | Three-year present value: $126,000 $126,000 | |||||
Annual Licensing And Professional Services Costs
Evidence and data. Interviewees noted that their organizations paid annual license fees based on the specific modules they subscribed to under Cropin Technology Solutions. For an accurate quote on the license and professional services fees, please contact Cropin.
Modeling and assumptions. For the purpose of the composite organization, Forrester assumes:
- The number of users of Cropin Technology is set at 270 across Year 1 to Year 3.
- The annual cost per user-based license is $650.
- The composite organization pays Cropin $52,700 for professional services in Year 1 and this increases to $54,900 by Year 3.
- The composite organization also faces custom reporting requirements which are separate add-on costs ranging from $43,900 in Year 1 to $45,700 in Year 3.
Risks. The exact cost and time invested by an organization can vary, depending on factors such as:
- The exact modules the organization implements with Cropin Technology Solutions, which would impact the cost per user-based license.
- The potential need for professional services and customized options that would come at an additional cost.
Results. To account for these risks, Forrester adjusted this cost upward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $818,000.
For , these costs may have a three-year, risk-adjusted total PV of . Please note that these licensing and professional services costs are based on high-level estimates and do not constitute a quote.
The following table shows custom results for .
Annual Licensing And Professional Services Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | Users | A1+A9 | 270270 | 270270 | 270270 | ||
| E2 | Cost per user-based license | Interviews | $650 $650 | $650 $650 | $650 $650 | ||
| E3 | Subtotal: Total licensing cost | E1*E2 | $175,500 $175,500 | $175,500 $175,500 | $175,500 $175,500 | ||
| E4 | Professional services fees | CompositeEstimate for | $52,700 $52,700 | $53,800 $53,800 | $54,900 $54,900 | ||
| E5 | Other add-on costs associated with custom reporting needs | CompositeEstimate for | $43,900 $43,900 | $44,800 $44,800 | $45,700 $45,700 | ||
| Et | Annual licensing and professional services costs | E3+E4+E5 | $0 $0 | $272,100 $272,100 | $274,100 $274,100 | $276,100 $276,100 | |
| Risk adjustment | ↑20% | ||||||
| Etr | Annual licensing and professional services costs (risk-adjusted) | $0 $0 | $326,520 $326,520 | $328,920 $328,920 | $331,320 $331,320 | ||
| Three-year total: $986,760 $986,760 | Three-year present value: $817,597 $817,597 | ||||||
Annual Internal Solution Maintenance Costs
Evidence and data. Once the composite organization had implemented Cropin Technology Solutions, some employees were dedicated with the responsibility for ongoing solution management activities. This could include handling ticket requests, working with the Cropin team to build or customize features, or engaging with the Cropin team regularly on how best to take advantage of the platform.
Modeling and assumptions. For the purpose of the composite organization, Forrester assumes that:
- Five project managers and five software developers are assigned to the ongoing management of the solution. Each employee spends an average of 300 hours annually to maintain the solution.
- The fully burdened hourly salary of a project manager and software developer involved in solution maintenance is $66 and $51 respectively.
Risks. The exact cost and time invested by an organization can vary, depending on factors such as:
- The complexity of the composite organization’s deployment, that could affect the number of employees needed for ongoing solution management.
- The skill set, knowledge, and capabilities of the organization’s employees.
- The organization’s industry and geography, which can impact the fully burdened hourly salaries of employees.
Results. To account for these risks, Forrester adjusted this cost upward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $524,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Annual Internal Solution Maintenance Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| F1 | Project managers needed to maintain solution | CompositeScaled for | 55 | 55 | 55 | |
| F2 | Average fully burdened hourly salary per project manager | CompositeTEI case study | $66 $66 | $66 $66 | $66 $66 | |
| F3 | Developers needed to maintain solution | CompositeScaled for | 55 | 55 | 55 | |
| F4 | Average fully burdened hourly salary per software developer | CompositeTEI case study | $51 $51 | $51 $51 | $51 $51 | |
| F5 | Average time needed per project manager to maintain solution (hours) | CompositeTEI case study | 300300 | 300300 | 300300 | |
| F6 | Average time needed per software developer to maintain solution (hours) | CompositeTEI case study | 300300 | 300300 | 300300 | |
| Ft | Annual internal solution maintenance costs | (F1*F2*F5)+(F3* F4*F6) | $0 $0 | $175,500 $175,500 | $175,500 $175,500 | $175,500 $175,500 |
| Risk adjustment | ↑20% | |||||
| Ftr | Annual internal solution maintenance costs (risk-adjusted) | $0 $0 | $210,600 $210,600 | $210,600 $210,600 | $210,600 $210,600 | |
| Three-year total: $631,800 $631,800 | Three-year present value: $523,731 $523,731 | |||||
Onetime Internal Trainings Cost
Evidence and data. Interviewees noted that after setting up Cropin Technology Solutions at their organizations, they needed time before they could start training users (i.e., farm managers and agronomists) who had been accustomed to manual data collection processes.
Modeling and assumptions. For the purpose of the composite organization, Forrester assumes:
- In Year 1, 240 farm managers and 30 agronomists require training.
- Each user requires an average of 10 hours of solution training.
- The fully burdened hourly salary of farm manager and agronomist is $8 and $42 respectively.
Risks. The exact cost and time invested by an organization can vary, depending on factors such as:
- The complexity of the composite organization’s deployment, that could affect the number of hours needed for solution training.
- The organization’s industry and geography, which can impact the fully burdened hourly salaries of employees.
Results. To account for these risks, Forrester adjusted this cost upward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $38,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Onetime Internal Trainings Cost
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| G1 | Farm managers who need training on solution | A9 | 240240 | |||
| G2 | Agronomists who need training on solution | A1 | 3030 | |||
| G3 | Average time spent on training per user (hours) | CompositeTEI case study | 1010 | |||
| Gt | Onetime internal trainings cost | (G1*G3*A14)+(G2*G3*A6) | $31,800 $31,800 | $0 $0 | $0 $0 | $0 $0 |
| Risk adjustment | ↑20% | |||||
| Gtr | Onetime internal trainings cost (risk-adjusted) | $38,160 $38,160 | $0 $0 | $0 $0 | $0 $0 | |
| Three-year total: $38,160 $38,160 | Three-year present value: $38,160 $38,160 | |||||
Consolidated Three-Year Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits Initial Year 1 Year 2 Year 3-
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The following table shows custom results for .
Cash Flow Analysis (Risk-Adjusted)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($164,160)($164,160) | ($537,120)($537,120) | ($539,520)($539,520) | ($541,920)($541,920) | ($1,782,720)($1,782,720) | ($1,505,488)($1,505,488) |
| Total benefits | $0 $0 | $1,581,765 $1,581,765 | $1,581,765 $1,581,765 | $1,581,765 $1,581,765 | $4,745,295 $4,745,295 | $3,933,615 $3,933,615 |
| Net benefits | ($164,160)($164,160) | $1,044,645 $1,044,645 | $1,042,245 $1,042,245 | $1,039,845 $1,039,845 | $2,962,575 $2,962,575 | $2,428,127 $2,428,127 |
| ROI | 161%161% | |||||
| Payback period (months) | <6 months<6 months | |||||
Appendix A: Total Economic Impact
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Total Economic Impact Approach
-
Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.
-
Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
-
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.
-
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
Appendix C: Endnotes
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
2 Revenue loss from overstock may include expenditure on storage costs, wastage, increased marketing costs, supply chain disruptions, and increased productions costs; while revenue loss from understock may include missed revenue opportunities or buying the difference in crop supply at a higher price.
PDF 