Precision Agriculture: FMC Transforms the Crop Development Operations
In our Digital Shift series, we showcase companies that are in the process of transforming their business through digital transformation. This month, we shed some light on FMC Corporation – an incumbent in agricultural chemical and technology that is committed to high yield and precision crop cultivation.
FMC Corporation is a US-based agricultural sciences company. Established in 1883 with $4.66B in revenue in 2020, the company operates in 50+ countries across the globe producing insecticides, agronomy products, and technological solutions for crop health, pest, and turf control.
FMC has achieved 9.6% growth earnings per share (EPS) within the last 5 years (2014-2019). This growth is comparable to the Fortune 500 median from the same period (%9.9). The firm has kept its resilient growth among its peers during the restructuring and digital adoption period of Agri-tech and crop development sectors.
Differentiation from the Industry
FMC has established itself as the pioneer entity of its sector. For the last couple decades, the company has approached agribusiness with a twist. FMC has built up its core innovation and research engine to focus on crop protection. Unlike its peers, Corteva and Syngenta, FMC has never invested in seed production and cultivation operations. Their focus has been on growers and agronomists. The company has diversified its operation and revenue channels drastically for the past 30 years. In the beginning of 2013, the company decided to shift its strategy to return to the core in a very similar trend of industrial giants in the aftermath of financial crisis of 2009. The company divested its adjacent businesses and focused on enhancing its core operations and business through M&A activities.
FMC’s long-term strategy to become a fully innovative agricultural science company has propagated the company towards initiatives aimed at the harmonization of technology infrastructure, improving grower confidence by applying core FMC crop protection solutions, and enabling its core business with modern solutions and process simplification. The company has been moving forward over the past 8 years with critical modernization and consolidation of business efforts to stay competitive, in a market where Bayer and BASF have also competed with its crop chemicals and pest control solutions in a dynamically digitalizing crop cultivation and growth sector.
The Digital Edge
This vision change had put pressure on FMC to establish priorities around modernization and restructuring of its business. This required the company to approach multiple angles to achieve this goal. The initial point of focus has been around modernizing the internal processes and capabilities across the organization with new technology tools and new principle development.
FMC has doubled down on its core operations to adapt its processes with modern technologies and capabilities. The company had initially established a technology help-desk to remotely assist its front-end sales and marketing teams on tools. Then company expanded its leadership and organizational development activities onto a digital platform. FMC had invested in field force productivity management digitalization to further drive customer-oriented operations for growers and agronomists around the globe. The company has expanded its operational capabilities with sales and distribution software for operational excellence as well.
The organization then realized the complexity that had emerged over the years of diversified investments in adjacent businesses. The technology infrastructure and way of working operationally differed a lot among different countries and business units. The executive team realized the need to harmonize all operations and processes where the necessity of achieving a true agricultural science was the ultimate company goal. The team began simplifying and consolidating all global processes and migrating all of the core enterprise systems to SAP S4/HANA through private cloud establishment. FMC along the big transformation journey has developed a business readiness mindset approaching transformation projects abandoning the change management model.
The company was aware of the need to modernize and evolve its offerings to accommodate the needs of its client base and enable digital discovery. FMC worked on augmentation solutions to complement and enhance its product and solution offerings via the establishment of a large platform called, “Arc Farm Intelligence”, announced 2 years ago. The company established the platform for growers to utilize its daily operations to precisely evaluate crop health and pest control with predictive and mobile capabilities. The company embraced the open API approach to integrate into ever growing precision farming and digital agriculture to integrate seamlessly into other vendor solutions. FMC recognized the importance of ecosystem strategy to scale its solution and it relied on existing and growing ecosystem in the market to fit its solution around it rather than building from ground-up. Another development with advancement its dedication and investment around technology was the PrecisionPAC equipment. The machinery is developed for agronomists to prepare and deploy ready-to-produce pesticide combinations that can enable more tailored pest control solution for differing soil, pest, and crop strain conditions around the world.
FMC’s almost 10-year-old focused approach towards agro-sciences and digitally augmented innovation in crop health and pest control has enabled the company to foster partnership with other peers to further down ramp up the company innovation engine. One example is the partnership that has been announced in pandemic year in 2020 with Zymergen. The partnership focused on joint effort to analyze pest strains and effects on certain crops to develop breakthrough pesticide solutions with micro-dosing and early diagnostics of turf management.
Incumbent stance on FMC Journey
More than 150 years FMC has been a pioneer in its field with vast solution for pesticides and crop health solutions. The company has diversified in adjacent businesses late 90s and abandoned that strategy with the changing market dynamics and demand. FMC dedicated to a vision 8 years ago and begin the transformation of its whole business through digitalization and innovation to become an agricultural science company with digitally enabled solutions for growers and agronomists for the large portion of agricultural economy in the world.
FMC accomplished a stable revenue, EPS and stable profitability over the past 5 years that mainly stems from successful transformation initiatives. Other incumbents of industries can utilize the approach of FMC to start with a vision to move along the journey with total dedication to simplify, increase precision and augment customer sentiment with digitally enabled offerings. FMC has secured a future-proof operation to adaptively fulfill the needs of its client base in the upcoming years. What will be the answer of your company along its strategy to diversify, innovate and stay relevant in a rapidly changing world?