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What has five years of building solutions that use the Internet taught us?

1. It is not about the Internet . . . The crazy hype about the Internet being the new business model is all wrong. It is about using that great vehicle called the Internet to change your processes and create efficiencies and cut costs that were not possible before.
2. It is the Biology not the Technology that will trip you up. It has not mattered the size of company or the ingenuity in the strategy being implemented the technology has been able to perform as it needed to. The problem has been in the people, (the Biology). No matter how good the technology is there is still going to be an adaptation phase where people have to get comfortable with a new system, a new process or a new machine. The key to successful implementation in our experience is do not wait until it is fully developed and ready for implementation to get people involved. Take your system out in small phases. Start with something simple with the full intention of getting people comfortable with the new technology and using the Internet. No matter the size of the company those that started with something small have been the eventual winners.
3. Get Started with Something. This lesson ties from the last lesson but it is more aimed at the multitudes of E-commerce committees out there and the executives that oversee them. It is impossible to know exactly where the technology is going to be in two years and it is impossible to get agreement on the exact system requirements when most people don't even understand what is possible today. Therefore the winners today are the people that believed they could create significant efficiencies using Internet based tools so they gave their support to start implementing. However rather than waiting on a large committee approval they started with something small and while their people were getting used to the internet they people were also figuring out how this new technology could be applied to create better systems and save money. Croplan Genetics is a company that exemplified that process. Over the past three years they have implemented the most complete and fully functional ordering system that handles all their product orders. They started with a commitment to use the Internet. Then they implemented E-Markets Net Order product. Then they integrated it into their JD Edwards system and along the way they added some customized features that allow them to handle other vendors products and distribute them with regionally secure allocations. There is no way that three years ago they could have envisioned the Internet ordering system called SOAR21 they have in place today.
4. Decision Rules for Contracts^SM pricing tools (DRC^SM) are an easy way for grain companies to get people comfortable with the Internet, make money and solve some of the headaches of originating grain. Today over 420 elevators in the upper Midwest are using DRC's. We expect that number to triple by the end of next year. Those 420 elevators have originated over 15 million bu. of grain with the tool and at an average of 3 cents per bus for the service that has added $450,000 in revenue to the elevators using this system. In addition it cuts down on the cost of tracking marketing programs and it reduces the risk of not hedging the bushels bought.
5. The DRC pricing tool is a pricing mechanism for forward contracts on Grain, the system handles the account summary reporting on a daily basis by contract and a final reconciliation at the end of the contract. It also uses the Internet to allow both the elevator and the producer view the pricing activity as it occurs. The five pricing models are as follows:
   • Market Index Forward^SM pricing model--Prices equal amounts of grain each trading day of the pricing period.
   • Seasonal Index Forward^SM pricing model--Takes advantage of seasonal price patterns by pricing more bushels during periods of historically higher prices.
   • Trend Trail^SM pricing model--Rides prices rally and automatically prices at the first downturn.
   • Trend Tack^SM pricing model--Follows the market trend and prices grain when the closing price is above the trend.
   • Market Prospector^SM pricing model--Prices a portion of grain after significant price rallies.

Past results have proven that a simple market index forward product outperforms the market advisors who watch the market every day and apply the best information they have to guessing where the market is going to trade. AGMAS an independent monitor of market advisory services has noted the performance of these firms to the simple average of the daily market closes. Reaffirming that the market is indeed very random and you can not outguess the market on a consistent basis.