=Paper=
{{Paper
|id=Vol-1152/paper24
|storemode=property
|title=Digital Business Ecosystem Prototyping for Agri-food SMEs
|pdfUrl=https://ceur-ws.org/Vol-1152/paper24.pdf
|volume=Vol-1152
|dblpUrl=https://dblp.org/rec/conf/haicta/HerdonPV11
}}
==Digital Business Ecosystem Prototyping for Agri-food SMEs==
https://ceur-ws.org/Vol-1152/paper24.pdf
Digital Business Ecosystem Prototyping for Agri-food
SMEs
Miklós Herdon1, Ádám Péntek2, László Várallyai3
University of Debrecen, Hungary
1
e-mail: herdon@agr.unideb.hu. 2e-mail: Adam.Pentek@agr.unideb.hu,
3
e-mail: varal@agr.unideb.hu
Abstract. There are many fields of application in the agro-food industry where
interoperability of information system would be essential. Amongst others
food tracking and tracing, logistics, Supplier Relationship Management (SRM)
and Customer Relationship Management (CRM) integration all need
interoperability solution in a heterogeneous environment. In order to carry out
a successful research on this topic, we studied the „Open Source” Information
and Communication Technology (ICT) solutions and tools that can be applied
by the Small and Medium-sized Enterprises (SMEs). Furthermore, based on
the researched technologies and systems, we assessed the electronic business
activities of the Northern Great Plain Region of Hungary. Based on the results
of the survey and analysis (variance analysis, cluster analysis, LISREL
models) we pointed out other key information and we proposed an adequate
solution system that uses open source solutions for the SME through the
development of a prototype based on a Digital Business Ecosystem (DBE)
concept.
Keywords: business ecosystem, information systems, agri-food, SME
1 Introduction
The ICT technologies are present in every area of life. They have become important
production resource for the enterprises. In this aspect, the situation of the SME is
difficult, as the utilisation of these technologies does not reach the desired level
neither in Hungary, nor in the European Union. The SMEs have a difficult time
adjusting to the integrated corporate information systems developed for the use large
enterprises. Moreover, the systems developed for the SME market (especially
systems produced by developers) do not make possible the accomplishment of
inexpensive and flexible inter operational business relationships between the small
enterprises. As SMEs are decisive factors for the economy of every country, many
enterprises spotted the potential market in this segment. Unfortunately, these systems
_________________________________
Copyright ©by the paper’s authors. Copying permitted only for private and academic purposes.
In: M. Salampasis, A. Matopoulos (eds.): Proceedings of the International Conference on Information
and Communication Technologies
for Sustainable Agri-production and Environment (HAICTA 2011), Skiathos, 8-11 September, 2011.
273
cover primarily the internal processes within the enterprise, so they do not provide
enough support for the relationships and processes between the enterprises.
In general, integrated information systems ensure the integration of the suppliers
and buyers (clients) into the business’ own systems (communication). However, in
case the companies used different information systems (from different vendors) in
order to get on-line (real-time) connection they required special developments. Small
and medium-sized enterprises which have implemented enterprise information
system recognized that this system does not provide them with interoperability. The
collaborative concept to achieve the particular case of SMEs may give benefits and
ensures the appropriate use of different kind of Toolsets can provide interoperability.
Our goal was to facilitate the implementation of the Digital Business Ecosystem
concept modules, which allows existing systems to get access to the common
marketplace more easily.
2. Research goals
The EU affirmed that new technologies need to be developed and implemented that
can successfully used by the SMEs in their daily electronic business activities. In
order to carry out a successful research on this topic, we wanted to study the „Open
Source” ICT solutions and tools that can be applied by the SMEs. Furthermore, based
on the researched technologies and systems, we would like to assess the electronic
business activities of the Northern Great Plain Region of Hungary.
The analysis of the data gathered through our research, based on which we would
like to assess the attitude of the SMEs of the Northern Great Plain Region of
Hungary in relations to ICT solutions.
The development of a prototype, based on the existing technologies, methods and
results of the analysis carried out at the enterprises of the region; a prototype that
uses accessible free solutions through which the digital market space of the SMEs
can be extended.
The theme of the research is in part defined by the Internet standards, e-commerce
regulations and developed practices and regulations. Therefore one of our main
objectives are to process, systemize and analyse from our theme’s point of view the
technological regulations and practical solutions pertaining to our theme.
The small and medium enterprises are not able to invest lot of money into
studying the ever-growing Internet technologies and selecting the ones that could be
useful for their business activities. At the same time implementing and using the
newest technologies are keys to maintaining and improving one’s competitiveness.
Therefore our objective is also to present the technologies that are to be used when
implementing the suggested prototype. To evaluate the conditions (e-preparedness)
under which the new technologies can be applied we carried out a survey, in order to
analyse the digital business communication of the small and medium enterprises of
the Northern Great Plain Region of Hungary in 2010.
Based on the results of the survey we proposed an adequate solution system that
uses open source solutions for the SME through the development of a prototype
based on a „Digital Business Ecosystem” (DBE) concept. In relation to the above we
274
have set as objective the development of a „hub – share centre” prototype portal
aimed at gathering information and publishing it to the respective enterprises and
experts.
2 DBE concept and tools
The Digital Business Ecosystem is an evolutionary, self-organized system, which can
contribute to the sustainability of the local and regional development through a well-
defined software platform. Moore first introduced the concept of a business
ecosystem as a strategic plan (Moore, 1993). Moore indicated that organizations form
a part of a business ecosystem and as such they should be viewed as a collective
rather than an individual entity. The idea of the Digital Business Ecosystem is "to
create an integrated, distributed pervasive network of local digital ecosystems for
small business organizations and for local e-governance which cooperate exchanging
dynamically resources, applications, services and knowledge." (Nachira, 2002). As
envisioned by Nachira, the DBE is intended to foster new and flexible ways of co-
operation and networking through a dynamic aggregation and self-organizing
evolution of services and organizations by means of open-source methods of
software and service creation. According to Nachira (2005), the key elements of a
business ecosystem (top-most layer) include 1) governance, regulations and
industrial policy, 2) human capital, knowledge and practices, 3) service and technical
infrastructure, and 4) business and financial conditions.
The idea of a technology (or industrial) ecosystem has been used to describe
relationships between technologies and organizations (Adomavicius at al, 2007). As
an example, consider the specific ecosystem view, which had laptop computers as the
focal technology and the wireless networking capabilities as the context. The
framework is based on a laptop-related Wi-Fi technology ecosystem, but business
ecosystem evolves participants to a new landscape (Li, 2009). Another more
comprehensive demonstration of the analytical approach is an ecosystem model of
technology evolution facilitates by focusing on the digital music industry
(Adomavicius at al, 2007). The interoperability focuses on inter-enterprise distributed
business processes and flows. According to IEEE’s definition (IEEE, 1990),
interoperability represents "the ability of two or more systems or components to
exchange information and to use the information that has been exchanged".
Application integration (comprising message, process, transport and interface)
represents the technological part, while information integration refers to the
linguistic, social and philosophical solution (comprising data, context, ontology and
interpreter) (Peltoniemi and Vuori, 2004). By integration we mean the cooperation of
processes and applications at the event and message levels while multiple systems
become one logical unit (Chituc, 2007).
The very important point is the issue of the interoperability. The aims of the
INTEROP project were to harmonize and synthesize existing researches around new,
flexible and adaptive architectures of the interoperability, - such as the model driven
approach, service-oriented architecture approaches, peer-2-peer architectures, agent
architectures and federated architectures (Panetto at al, 2004). A P2P network is built
275
of interconnected smaller networks which are the result of long-running transactions
corresponding to automated (B2B) business activities (Pappas at al, 2007; Razavi at
al, 2009). ERPs for SMEs do not have such wide of range functions as ERP II which
is for a organisation but many basic functions are necessary for the interoperability
features with other SMEs in the DBE (Fig. 2.). An example for creation of a DBE for
the shoe domain which requires a reliable and secure communication infrastructure
among SMEs describe by Chituc at al (2007).
Interoperability is a multidimensional problem that can concern different layers of
the enterprise (Salampasis at al, 2005; Tektonidis at al, 2006). The above mentioned
problem is mainly caused by incompatibility in the information representation and in
the adopted software application methods (Jardim-Goncalves at al, 2006).
Information /knowledge interoperability has to focus on the following aspects:
information/knowledge representation and management, learning ability, rights to
access information, knowledge sharing, aspect related to adaptation and
recombination of knowledge in a collaborative network during its life-cycle. The
Framework for Enterprise Interoperability (FEI), which is currently under
standardisation (CEN/ISO 11354) defines a classification scheme for the
categorisation of knowledge for interoperability in the line of three dimensions:
interoperability barriers, interoperability approaches, and enterprise levels (Naudet at
al, 2010). The technical architecture of KodA is based on SOA and subsequently
consists of three basic layers: business process management layer, business services
layer, business application layer. In food tracking and tracing system we have to
create a communication channels among partners (Manicas and Manos, 2009;
Manicas at al, 2010) The KodA focuses on the supply chain for processing food
products which was communicated and discussed at different forums. This has
resulted in establishing the agriXchange group that has the objective of harmonizing
agricultural data exchange on a European level (Wolfert at al, 2009).
3. Research methods
The methods and tools of the electronic business technologies (e-business) and the
Information and Communication Technologies (ICTs) pertaining to business
applications. The activities accomplished through e-business mean both the e-
commerce transactions (procurement, acquisition, sales) performed in the B2B
(Business to Business) relations, as well as implementing ICT technology for the
internal and external business processes with the proper IT support. The business
opportunities offered by the e-commerce and the Internet reach beyond the earlier
solutions. They contain new and constantly changing possibilities with their direction
changing dynamically, but their impact being sensed in our everyday life. The
technological pressure generated by the Internet presents the enterprises with new
challenges day by day. It is not easy for the company leaders to adapt the ever
changing Internet to their existing systems in order to achieve the strategic goals of
the company.
On the electronic market appeared not only businesses but the private as well as
state sectors with the aim to carry out their internal and external business transactions
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in electronic form, through the Internet. Multinational companies – as they were the
first ones to step into the network – forced and are still forcing all other participants
of the business sector to perform their business transactions in this way. Connecting
to these systems that have great resource requirements is a great burden for the small-
and medium enterprises (SME).
The starting point of the analysis was in-depth professional interviews and
consultations were pivotal to preparing the case studies. The professional interviews
provided vital and direct background information that helps understand the examined
topic. Thus the validity of the gathered information was not only supported by the
quantity research but also by primary type quality research as well.
As the result of the professional interviews and primary research we have prepared
the appropriate questionnaire with the aim of analysing the digital business
communication of the small and medium-sized enterprises of the Northern Great
Plain Region of Hungary. The professionalism of the questionnaire was checked by
professional-, and it’s interoperability by 20 randomly selected control groups. We
have amended the questionnaire based on the feedback of the control groups. As
target group for the research we have considered all existing small and medium size
enterprises that are based in the Northern Great Plain Region of Hungary.
In order to support the survey, an on-line version of the questionnaire was
prepared with the help of the Lime Survey software system. The survey was needed
for the research to set up in a way so that the audience could answer the essential
questions regardless of their professional background. As there aren’t holistic and
accessible statistics about this period on this topic, we wanted to scan the actual
status of the region through the help of the survey. Purpose of the research was to
have the following questions answered:
What type of IT infrastructure do the SME of the Northern Great Plain Region of
Hungary have? To what extent do they take advantage of the new software
technologies that appear on the market? What is the degree of importance of the
different info-communication tools at the given „connection points” during day to
day operation? What is the mental attitude of the given SME towards the ICT tools?
What is the level of ICT preparedness of the SME of the Northern Great Plain
Region of Hungary? What percentage of the yearly revenue is designated to maintain
their IT systems?
We selected 750 companies that we approached in person and/or per telephone. Of
these, 250 were willing to fill out the questionnaire. We have mailed the
questionnaire to them and 210 were returned by deadline. Some of the questionnaires
that were sent out were filled out on-line through the research server of our faculty.
Based on this, the 210 responses meant that the willingness to respond was over
25%.
As the survey encompasses 15 questions and 17 question blocks (224 questions
altogether), we have reduced the questions – with the help of the main component
analysis – into 22 components. As aim of the main component analysis is to expose
the background variables (dimensions) that control the variables in a way that the
variables that are connected with each other are gathered into a main component, we
have gained data that was easier to handle without substantial loss of information.
Moreover 2 quantitative and 4 qualitative characteristics were preserved. On the
resulting main components we applied the Variance Analysis and built 2 LISREL
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(Linear Structural Equation System Involving Multiple Indicators of Unmeasured
Variables) models. Beside this we tried to point out other key information with the
help of cluster analysis.
Our method of approach was to draw general conclusions about e-business and
observe trends based on considering and systemizing both the theories revealed in the
first part of this work as well as the knowledge gained from the interviews and
survey (inductive approach).
4. Results of survey
With the help of variance analysis we were looking to find the differences in the
attitude of the SMEs based on their answers, while grouping them based on specific
criteria. Using cluster analysis we have examined the areas of connective operation
that companies should concentrate more on. With help of LISREL models we
examined the factors that impact the use of the community applications and the
factors that impact the increase of the on-line sales.
4.1. Differences in attitude of SMEs
After performing the analysis we have made the following main observations.
No company, regardless of category, makes use of the advantages offered by the
gathering pages and free on-line voice transmission solutions.
In companies with low revenues the spread of the ICT products is hindered to a
greater extent, when compared to others, by
lack of sufficient IT expertise of the employees,
the fact that they do not know the services provided,
employees handle the tools with difficulty.
Personal referral is an important factor in every category, but it is relatively of
most importance in services, constructions and commerce.
Short and long term profit, as a goal is important in every sector, with the
relatively highest role in the group of commerce and other industrial enterprises.
There was a sensible difference in how companies viewed the potential business
impact of the gathering pages and free on-line voice transmission solutions. In case
of the industrial sector these applications have a relatively lesser role compared to the
agricultural sector where their role is relatively great.
The role of company website and web shop is significant in the commerce and in
the other industrial enterprises sector.
The spread of the ICT products is hindered to a greater extent by the lack of
sufficient IT expertise of the employees, their lack of knowledge about the services
provided, and the fact that they handle the tools with difficulty in agriculture,
commerce and industry and seems to be less of a problem in the area of services.
The IT development increases in direct proportion to the increase in the number of
personnel. Searching and browsing is relatively high in companies with 11-250
employees.
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The spread of the ICT products is hindered to a greater extent by the lack of
sufficient IT expertise of the employees, their lack of knowledge about the services
provided, and the fact that they handle the tools with difficulty in companies with
less than 50 employees.
4.2. Analysis the types of communication
To determine this we have inserted questions into the survey to reveal who is the
communication partner for the given company. We have made a distinction between
internal-, customer-, and vendor communication. Once providing these three forms,
we have defined the form and purpose of communication. We then created the three
tables that provided an easy possibility for the experts of the different companies to
give an answer. After the survey was completed and the answers systemised through
cluster analysis, we were able to determine the communication areas that the
enterprises should also consider based on their existing preferences. We have
conducted the analysis for each sector separately and illustrated the results on the Fig
1. Below is the description of the three part connotation for the proper interpretation
of the diagram: XYZ
X: Communication Channel: SZ: personal, T: telephone, E: e-mail, H: Internet
voice solutions, F: forum, K: Community platforms, I: Information system based
Y: Other party (With whom I am in contact): B internal, Ü: customer, S: Vendor
Z: Name of business process: G: gathering information, É: inquiry, A: requesting
an offer, M: ordering, F: payment, S: services
Fig. 1. Cluster analysis for the agri-food sector
The following conclusions can be drawn through cluster analysis. Any enterprise,
once the sector of activity is defined, has to find the communication channels listed
on the diagrams that are considered to be important (For example the information
gathering done via E-mail (EBG)). Once the appropriate clusters are defined, they
can then find within the clusters further methods that could be important for their
business. From these, only the existing ones are worth improving.
279
4.3. Impact factors for e-sale
We developed two LISREL models aiming to examine the factors that impact the use
of the community applications and how they impact them, as well as the factors that
impact the increase of the on-line sales.
In the case of both models the GFI value shows an over 0.8 value that proves the
validity of the model from a statistical perspective. After analysing the completed
models we were able to draw the following conclusions.
There is an increase in importance from the business perspective of the internet
community market spheres, the B2C and C2C market spheres and of the community
platforms.
There is a decrease in importance from the business perspective of the internet
community market spheres, the B2C and C2C market spheres and of the community
platforms, if the main goal is cost reduction, because the introduction of a new
technology at corporate level definitely implies an increase of expenses in the first
stage of the rollout.
From business perspective the personal community spheres are important in case
the goal is to increase the on-line income. Not overly surprising is their expectation
that these spheres will help improve their image and lead to cost reductions. Of
course maintaining and updating such sites demands time and energy, therefore the
businesses need to invest money in it.
The information sharing community portals are advantageous for those businesses
that consider searching and browsing to be important by default. They are considered
to be important by the businesses that believe that more on-line presence will lead to
an increase in both short term and long term profit. Furthermore they are considered
to be important by those businesses that believe that such spheres will help improve
their image and lead to cost reductions.
4 A Prototype Solution and Possible Application Domains
Applications based on DBE philosophy can be used in many places. As it can be seen
in the figure (Fig. 2) the data are stored in individual peers separately and there are
DBE servers which require data from these peers. This structure of the data storage
creates the possibility that all of the data owner store own data securely and the data
are send only to an appropriate request by a duly authenticated server. This method is
very advantageous in many ways.
The Fig. 2 shows that many master servers can be implied in the ecosystem and
the peers can connect to them.
280
Fig. 1. The DBE model
Since it is designed in a way that a peer can connect to more than one main servers
the data modified in one place (maintained) can be displayed in several places
(servers). The contact between peers and servers are made by XML, so a peer can
connect to any of this ready-made ERP for accepting the request to join.
With our prototype solution the SMEs can provide safe, transparent, direct
services to potential customers. According to the Client-Server architecture, all data
are stored on an assigned server. This can provide great advantages for the server’s
owner. Our vision is based on P2P SOA technology and all components are written
with Open Source tools. In multi-agent systems, the underlying networks in a Digital
Business Ecosystem are always dynamic and network topologies are always
changing over the time.
Fig. 3. Layered model of the prototype
The main server is always able to work, but the other habitats sometimes are up or
down. The P2P communications are working via OWL (Web Ontology Language),
281
WSDL (Web Services Description Language), XML, RDF (Resource Description
Framework) technologies (Fig. 3).
The Fig. 4 shows the structure of the database and as it can be seen in the portal it
is made up of modules. Some modules are compulsory (example user or log), and
others are optional. The peer tables are installed on the peers. The peer-specific
offerings are stored in these tables, which are downloaded to the portal after the site
selection process. The other tables are located in the main server (portal). These
tables help to communicate, sharing the knowledge, blogging, etc. (Fig. 4)
Fig. 4. Database structure of the prototype
4.1 Applications in (agro) tourism
We believe that it is worth to capitalize the potential of the DBE philosophy in much
more fields. Our prototype can assist that kind of businesses which are able to join to
any value chain. For instance the typical good application area is the tourism
management, especially the destination management.
Many SMEs who work variety of business activity can join to the value chains in
tourism sector. These SMEs can create value chains according to community
principles and find our places within the value chain. Additional services make the
site to become more useful for the members of the community and for the potential
costumers as well. The different types of knowledge basis which are characterized by
meta-data attached to each other and to adequate part of the value chain as well thus
extend the usefulness of the portal. Because the most of enterprises already use
282
different ERP system or at least their data are stored somehow. To get out the
problem of the duplicate storing, we offer the opportunity supplying the data from
their own database with the help of XML technology. With the XML technology the
companies without any particular investment can join to the DBE community and
they can find new markets, knowledge and community.
4.2 A prototype tracing solution in the agri-food sector
The food chain traceability are more and more important (Herdon and Füzesi, 2011)
and it could be based on DBE solutions. One of the most important properties of this
method that all data is stored in the owner database and the data is served if it is
requested by the authenticated DBE server. All connected nodes have own database
are stored in their own database server. Forasmuch many organizations have exiting
information system (ERP), where they store the necessary data. We assure possibility
to connect other existing systems to the DBE by XML technology (We use the
portability property of the XML).
The database structure is available for download and use. In case of the
traceability the XML file contains the following information: Company name, TRU
(Traceable Resource Unit) identification number, Output id., Input id. In addition, we
need a web server where the portal software is running. The portal was prepared with
open source tools according to DBE principles. The prototype system is suitable for
both top-down and bottom-up tracking and tracing.
With this prototype we have an opportunity to trace the full path of life of the
product, if only all participant have been joined to the community. The above
solution can greatly facilitate the precise monitoring the flow of substances occurring
in food. Thus, the appearance of any food safety hazard we have opportunity to
achieve rapid and efficient product recall.
Conclusions
Enterprises are faced with new challenges as they try to keep up with the
continuous technological changes. The decision makers of the enterprises are in a
more and more difficult situation trying to figure out which systems they should
integrate into their existing systems, and which ones they should introduce in order to
support their business processes. We have carried out our research along these
questions. The results of our research have proven that the introduction of modern IT
solutions could significantly enhance the business opportunities of the SME, and they
could thereby ensure for themselves a sustainable presence in the on-line segment. Of
all the results of our research, we would like to highlight the following.
Utilising the main component and variance analysis methods, we have grouped –
based on the answers to the survey - the communication directions and types
according to importance. The survey makes it possible for the SME to identify the
useful, yet unused communication forms, and develop their communications
portfolio along these forms.
283
Using the method of variance analysis we have observed that although considered
as very important by the private sector, the advantages of the free on-line voice
transmitting solutions and of the gathering pages is not being exploited by the SME.
We have prepared 2 LISREL models, through which we have concluded, that the
on-line market spheres, the B2C, C2C community spheres are important for the
businesses that would like to avoid leeway, are interested in long-, and short term
profit increase and those that recognise that training of the employees and getting
them familiarised with new technologies, methods and procedures is very important.
We have designed and created a prototype system that can be used for the set-up
of digital business networks, with its most important partial results being.
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