Happy New Year from Safefood 360°! To restart our blogs we thought it would be appropriate to write about how and why we think IT will shape food safety compliance in 2016 and the years beyond.
Food safety management has reached a critical confluence point and, over the next five years is set for rapid change in the way that it is managed in FBOs. I will hold a detailed breakout session about this topic, our customer conference in January, but this blog post is a brief summary of how change will occur and what transformational new concepts are going to be delivered to Food Safety Management practices through effective harnessing of IT.
Use of software in food safety compliance is generally years behind other business areas
So, firstly, isn’t this just marketing speak, designed to increase our sales, to suggest that food safety management systems are about to undergo a rapid change? The answer is no. IT solutions around food safety really have lagged woefully behind cutting edge technologies in accounting / ERP, CRM and e-commerce to name but a few sectors which have IT absolutely at their core. The fact that 90% of food companies still have manual systems – by which I mean a set of processes written on paper or on own-built Excel / Word sheets is clear testament to this outdated methodology.
90% of food companies still have manual systems
Compare this to say, bookkeeping, where the vast majority of businesses that have been trading for more than 6 months use an accounting package like QuickBooks, Sage, or Xero. As a 25 year veteran of business applications, I’m simultaneously intrigued, yet not surprised that this has been the case with food safety software and am equally sure that we are now about to enter a period of rapid change and development in these platforms.
The commercial drivers for using food safety software are now clear, just recently
To believe this we first have to understand why food safety management software has lagged so far behind the available technologies. The answer is actually quite simple and logical. All innovations in business software have been driven by companies’ need to increase efficiency or output and therefore maximise profits. So, for example, accounting software developed because people recognised that doing this exercise using a computer program was faster and more accurate than doing it by hand, and so by adopting a computerised accounting solution a business would be more efficient and thus more profitable. In fact, the business logic of having a computerised accounting solution has now become so uniformly accepted that no business at all considers doing accounting by hand, the decision is simply which bookkeeping package to buy.
For many years food safety was treated as a necessary evil
Why, then, has this logic of improved efficiency driving profits higher not permeated into the food safety management space? In basic terms, there was simply no sufficiently compelling commercial driver to make it happen. For many years, the food safety management function in an FBO was treated as a necessary evil but one that did not have a massive impact on the business. Clearly, if the company produced very poor food, consumers would ultimately boycott their products, but as most manufacturers produced food to an acceptable standard, this rarely happened in developed nations. To an FD or CEO in an FBO, the food safety department was essentially a collection of technicians whose job was not mission critical enough to demand improvement and investment (which is what drives innovation from software developers) in the same way as, say, their accounting function or supply chain. Food safety management departments could thus continue using outdated and inefficient manual systems because the impact of this inefficiency was small enough on the business not to merit any investment to improve it.
Cost of noncompliance has recently shot through the roof
If this is the case, then, why do we believe the status quo has fundamentally changed in the food safety management world and why is IT going to be such an important driver in shaping this new reality? Ultimately, as with all things in business, it just comes down to money and profits! This is where the confluence of factors that I mentioned above has come into play. In business, innovation can occur for “stick” or “carrot” reasons, which is to say a virtuous or positive set of reasons to make improvements (e.g. computerising accounting processes to increase efficiency and therefore profits) – which are “carrot” reasons. The opposite is a set of “stick” factors which means where innovation is driven because the consequences of not doing something, or doing something wrong, would have serious, or indeed disastrous, effects on a business’s profits.
FDs and CEOs are sitting up and taking notice of food safety management
A series of well publicised food safety failures around the world in the past 15 years (BSE, dioxins, infant milk and Horsegate) have been coupled with the massively influential power of digital media exciting and harnessing public opinion means that a significant food safety failure can quite simply put an FBO out of business. FDs and CEOs are now very definitely sitting up and taking notice of food safety management which has muscled its way onto the Boardroom table as a necessary evil which absolutely cannot be ignored or relegated to a low priority issue.
The complexity of new regulations is unmanageable for manual systems
Following these food safety crises, governments have not been sitting idly by but recognized they needed to do something. A plethora of new and enforceable legislation has been introduced which also serves to focus the attention of Directors in FBOs who are now caught between the twin pincers of a powerful media ready to pounce on any mistakes and this new legislation. A consequence of this is that Food Safety Practitioners in FBOs are now being subjected to significantly increased urgency to comply and not make mistakes, which creates the perfect environment for innovation in their processes – something which IT is uniquely positioned to deliver on.
The silver lining in the cloud
From an IT perspective, the twin opportunities of the FBO now urgently requiring an effective solution together with the emergence of cloud based technologies (which make such systems much more cost effective to deploy in geographically dispersed organisations) make the case for developing modern food safety systems far more compelling for software companies. Furthermore, the main elements of operating (as opposed to building) a food safety management system revolve around being prompted to do certain things and then recording the outcomes of these events or tests – repetitive steps that very much lend themselves to computerisation.
Until recently, many of the food safety solutions on the market had their origins in more generic process / risk management solutions from other sectors, such as manufacturing or engineering, and were modified to fit the food safety environment. The pressure is now on, in the increasingly regulated world of food manufacturing, to have specialised systems built from the ground up, systems which both facilitate the building of food safety plans, automatically drawing upon the required food safety legislation, and then executing them once they are in production.
In summary, then, thanks largely to this confluence of elements, the food safety management environment market is set for a transformational change, led by innovations in IT, over the next few years. Read about Safefood 360°’s vision of what this innovation will look like in our next blog!