PACIOLI 2, Accounting & managing innovation

Table of contents

Innovation and management
Summary of workshop report 2
Summary of reflection paper 2
Stakeholder analyses
PACIOLI distraction
Participants of the second workshop

Innovation management

In innovation theory usually several stages are identified. These steps in the innovation process are: strategy development

  1. innovation plan
  2. definition
  3. development
  4. preparation
  5. implementation.

To understand the objectives of the PACIOLI project, it must be clear that PACIOLI only covers the first stage: strategy development. The activities that are part of the strategy development stage in the innovation process are represented below. The PACIOLI project has been built around these activities.

Summary of workshop report 2

In the first workshop the objectives of the PACIOLI project were discussed and it was concluded that the main objectives for innovation in the FADNs are improvement of the quality of FADN data, the use of data and the cost effectiveness of FADNs. A mature level of strategic information management is a prerequisite for more flexible FADNs that supply high quality data in a cost effective way.

In the second workshop the national FADNs were the main subject. According to the principles of Strategic Information Management (SIM) and Information Modelling (IM), each country presented their FADN in a global description. Both the organization around the FADN and within the FADN are described.

Around the FADN, the management and funding structure of the organization of the FADN is described, as well as the stakeholders: everyone who deals with the FADN in one way or another. The section on accounting at farm level gives an impression of the technological and fiscal environment of the FADN. Within the FADN, a process model is given and the latest innovations which have taken place are mentioned.

The FADN stakeholders are very important for the PACIOLI project. As the objective is to innovate the FADN, we have to know to whom we should listen and from whom we should pick up ideas for change. Especially the relation between the FADN and the policy makers is discussed extensively. Their need for up-to-date data was expressed, because policy making is 'future making'. At the same time researchers ask for data similarity between the countries in the RICA data set.

On the way to innovation, the gathering of data on issues like environment and forestry is discussed. The conservation of the environment and forestry management are examples of these topics. In the software field the use of data with 'client' software (a client-server approach using an interface based on Windows) was presented by Italy.

The participants that were present at the second PACIOLI workshop agreed that the next step in the process is to make lists of potential innovations and to order these topics on importancy and preference. To contact and maybe involve the most important stakeholders is another task. During PACIOLI 3 the topics will be described and the need for change will be pointed out. The effect of the changes on the information model will be discussed and a stakeholder analysis will make clear how to deal with the most important stakeholders. This should result in a list of subjects which can be worked out to make actual project proposals. By preparing innovations in this structured and 'stakeholder-oriented' way, the chances our efforts succeed, will improve.

Last but not least this second workshop made the enthusiastic network of accounting experts, information scientists and FADN experts of 7 EU countries even more enthusiastic. Experts from Belgium and Germany have already joined this group. For the remaining two workshops the other EU member states are still invited, in order to get a broad platform for ideas about innovation of FADNs.

Summary of reflection paper 2

The second reflection paper 'On innovation management in Farm Accountancy Data Networks' provides suggestions for the decision making on the further developments of the European FADN. This reflection paper is submitted to the management committee of the RICA.

First, some concepts in innovation management are identified. Innovation needs to be distinguished from an evolutionary adaption and a revolutionary change. In innovation theory several stages are identified. The PACIOLI project only covers the first stage: strategy development.

Second, innovation at farm level is discussed. Differences in farm accounting between member states are explored. Important factors explaining these differences are market and institutional factors. A profound knowledge of these factors and of other local circumstances is a key factor in succesful innovation. Therefore it will be hard to support innovation at farm level from the top of the RICA organization. The International Accounting Standard Committee (IASC) started to develop a specific standard on accounting for agriculture. RICA is not yet very much involved in such standardization efforts, but it seems to make sense to do so because the RICA committee is in a certain sense itself a standard setting body. Accounting is probably not a favourite management tool of farmers. Their interest is mainly focused on the bio-technical process, while accountancy data focusses on the economic and financial process. A method to bridge this gap is to integrate technical data and financial data in one information system.

Third, recent innovations in FADNs are described. A short overview of succesful innovations in several FADNs is given, because these experiences can help to foster innovation in the future. Especially changes in the demand by users of the FADN seem to have a driving force in the reported innovations. Examples of innovations initiated by policy makers and researchers (the most important users) are given.

Fourth, the institutional aspects of the RICA are discussed. The second PACIOLI workshop used the framework of Information Engineering to try to identify the factors that might influence the process of innovation in a FADN. This will be helpful in assessing future potential for further innovation. For strategical (information) management purposes, process models were made that describe the current situation of the FADN. In addition a stakeholder analysis has been carried out. The process model and the stakeholder analysis for RICA are described extensively. Process models identify activities that are common between member states and the EU's RICA. Hereby areas for potential cooperation can be identified, e.g. in innovation or in software development. One step further is the use of the process model to outsource some of the activities. The mission of the RICA unit can thus be compared to the activities carried out.

Stakeholder analyses

Stakeholders are those persons or organizations that can influence The organization inone way or another, in this case the FADN. In discussing innovation it is necessary to have an overview of the possible influence that stakeholders might have on the innovation path both positive and negative. It must be made explicit if and how the various stakeholders are involved in the innovation path and what their role might be.

At an abstract level, the conclusion based on the process models and the stakeholder analyses is that two types of FADNs can be identified. The extreme types could be called 'type X' (ministry buys farm accountancy reports) and 'type Y' (research institute gathers farm data). From the point of view of the Ministries of Agriculture, the 'type X' FADN has 'low cost - low value', while the 'type Y' FADN has 'high risk - high value'. In reality in most member states aspects of both types can be found. Both types have their particularities but they also have a lot in common and one type is not necesarrily better than the other.

To conclude, the analysis of the innovation process in RICA stresses a need for more flexibility. The ongoing trend to gather all the data variables for all 65,000 farms in the whole of Europe makes less and less sense. It hampers innovation and leaves the Commission and the research community with an outdated set of data

PACIOLI distraction

During the second workshop in Valkenburg (The Netherlands) a visit was paid to a 'Management Durable Dairy Farm'. The farmer gave a conducted tour on his farm and spoke about the special way of managing his farm. The bookkeeping part was supported by an accounting advisor, who gave us insight into the computer system of data gathering in the Netherlands. Special attention was paid to the electronic way of getting financial data from the bank and the data on fertilizer use.

Financial year :



Farm :

63190 Adm. number:



Entry :



<<<<<<<<<< BALANCE 95 >>>>>>>>>>



1 = date

= 01-07-95


2 = product

= 10096 MCPP-SUPER

mean :


3 = quantity

= 5 LTR


4 = amount

= 95



5 = crop specification :




690 durable grassland




min. :


7 = do not record entry

mean :


9 = everything o.k.

max. :


0 = everything o.k., STOP WITH THIS FARM


choice =

Participants of second workshop

Pentti Hyttinen
Reijo Pittrijärvi
Jouko Sirén
Simo Tiainen
Emmanuel Chantry
Bernard Del'Homme
Jérôme Steffe
Guido Bonati
Carla Ciaramelli
The Netherlands
George Beers
Conny Graumans
Gijs van Leeuwen
Krijn Poppe
Carlien Pruis
Inmaculada Astorquiza
Miguel Merino Pacheco
Carlos San Juan
Arne Bolin
Lars-Eric Gustafson
Bo Öhlmér
Per Persson
United Kingdom
Alastair Baily
Sandra Dedman
Nigel Williams
Jacques de Dooy
Luis Florez-Robles
Nigel Robson

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