Bosch BASF Smart Farming, the new joint venture between Bosch and BASF Digital Farming, is an excellent example of purpose-driven ecosystem collaboration in the manufacturing industry. I had the opportunity to exchange views with key stakeholders from both companies. According to Florian Gwosdz, managing director of Bosch BASF Smart Farming, “Closer collaboration in industry ecosystems has become increasingly important for manufacturers, as bundling competencies and skills related to hardware, software and digital technologies will be key to increase the overall customer value.”
I can only echo this, as the new joint venture demonstrates quite nicely that the customer value of a product or solution can be increased if the partners combine their individual capabilities and collaborate more closely with each other.
This is key, as higher customer value can also be a competitive advantage.
Collaboration in Ecosystems Increasingly Part of Manufacturers’ Strategic Business Agendas
Drivers of collaboration in ecosystems generally include increasing operational efficiency, boosting supply chain transparency and ensuring business resilience — but also increasing customer value. According to IDC research, 31% of manufacturing organisations worldwide already have a well-aligned and agile ecosystem to support and develop new and innovative solutions. A further 61% also have plans to expand their ecosystems to scale existing products and create new offerings.
So, from my perspective, now is the time for manufacturers to think more and more about engaging with their ecosystems. Otherwise, they will end up falling behind those manufacturers that have already understood the value of better collaboration with their ecosystem.
Upheaval in the Agricultural Industry as Momentum for Industry Ecosystems?
To become more profitable and efficient, farmers are looking for holistic solutions related to a more sustainable farming practice. This is not only driven by regulations (such as EU law) but increasingly also by consumer demands.
The core ecosystem in the agricultural industry comprises farmers; OEMs of agricultural vehicles and equipment; service, maintenance and repair providers; and manufacturers of fertilizers, pesticides and seeds. To deliver holistic sustainability solutions to farmers and increase customer value, stakeholders in this ecosystem need to collaborate.
The new joint venture between Bosch and BASF Digital Farming exactly addresses this and aims to increase the overall value for farmers by offering a joint solution.
Bosch and BASF Digital Farming: Joint Solution Overview
Bosch and BASF Digital Farming announced in late 2020 that they would establish a joint venture to internationally market and sell smart digital farming solutions from a single source. Both players are recognised and respected leaders in their fields.
The joint venture aims to offer farmers a holistic solution to support and foster more efficient and sustainable farming. The first two products to be launched, a Smart Spraying Solution and an Intelligent Planting Solution, will include innovative solutions to help farmers reduce their use of herbicides while also maximising crop production and controlling seed distribution according to fertility, enabling optimal soil use.
The joint solution comprises capabilities from both Bosch and BASF Digital Farming:
- Bosch will bring in its knowledge of hardware and software as well as control systems and embedded software.
- BASF Digital Farming will bring in its xarvio Field Manager as a leading digital product powered by a real-time, automated and field-specific agronomic decision-making engine. This will help to optimise field and field-zone specific crop production and to automate weed management.
The herbicide-saving Smart Spraying solution combines Bosch’s camera sensor technology with the xarvio field-specific agronomic decision-making engine that is part of Field Manager, and it aims to optimise weed management and more efficiently use herbicide. Field trials show that herbicide volume savings of 70% are achievable.
What’s in it for Farmers?
Using the products and services of the Smart Spraying solutions reduces farmers’ use of herbicides and results in cost savings for them. So, the increased value for farmers not only lies in reduced costs, but also in helping farmers to address environmental and social issues.
What’s in it for Bosch and BASF Digital Farming?
Given the strong momentum in the market for sustainability, it would also be risky for Bosch and BASF not to address the demand for connected solutions, especially if other stakeholders in the ecosystem have pushed forward faster. By moving fast, Bosch and BASF — both experts in their fields — want to maintain and affirm their market-leading positions by offering agricultural clients connected sustainability solutions, thereby increasing value and benefit to customers.
Momentum in Europe is currently high due to EU regulations such as the Farm to Fork strategy (at the heart of the European Green Deal), market awareness and market demand, driving investments accordingly and from which Bosch and BASF will benefit by jointly offering solutions.
From my point of view, providing innovative solutions for sustainable farming through technologies such as Smart Spraying can be considered an important pillar of BASF’s long-term sustainability strategy. This might also include building up a new channel that addresses new market demands related to sustainability, in addition to traditional digital sales channels. For example, BASF is also participating in other platforms that focus on volume sales.
Being able to capture field data from farmers will enable the joint venture to feed this data into their AI/ML-based algorithms that will make their solutions for sustainability-driven crop optimisation even better over time, leading to better ROI for farmers.
Collaboration in Industry Ecosystems Is all About Trust
I keep repeating myself, but collaboration in ecosystems requires, above all, trust. Yes, collaboration in ecosystems requires the use of digital technologies and platforms, which are both important enablers and drivers of industry ecosystems. But trust is a prerequisite to establishing successful ecosystem collaboration. This includes trust between the collaborating stakeholders, upon which there can be a clear, mutual goal that ensures a win-win commercial situation for all partners, as well as clear expectation management on technical capabilities and what is possible and what is not.
Read the full case study, IDC Case Study: Bosch, BASF Digital Farming Join Forces to Increase Customer Value in the Agricultural Industry.
Our IDC European Manufacturing Executive Digital Summit 2021, to be held on November 18, will provide a great opportunity for manufacturing executives to discuss this and other key issues related to how to best respond to changing market conditions and customer requirements and how to establish transparent and responsive operations leveraging digital technologies.
To learn more about our upcoming research, please contact Stefanie Naujoks, or head over to https://www.idc.com/eu and drop your details in the form on the top right.