Bogota, N/A, CO
Environment, Energy and Agriculture
National Federation of Colombian Coffee Growers (Juan Valdez/Cafe de Colombia)
Contact Center efficiency
Short SummaryThe life of Colombian coffee growers has changed by using INTERACTIVE VOICE RESPONSE (IVR) technology. They are a very scattered community made up of 566,000 coffee growing families that are located throughout 16 states, known as departments, and over 500 municipalities. Most of them are small producers that work mainly in coffee cultivation and are associated in the NATIONAL FEDERATION OF COFFEE GROWERS OF COLOMBIA, an 80 year old organization.
The Federation has found an effective ally in Nortel IVR MPS500 for its institutional communication’s needs. This tool has been the medium to develop as of today three great projects in order to benefit the coffee community, which faces great obstacles such as lack of information, long distances to the main urban areas, low educational levels, and income from a single activity: coffee cultivation. The projects are:
1. Information on coffee prices, which provides the producer with a reference price in order to obtain the highest price for his coffee.
2. Voting via telephone, which allowed the coffee grower’s to participate in the democratic polls and elect their Federation representatives.
3. Suscribing to preferential shares for companies made public by the Federation, such as the one that operates Juan Valdez coffee shops.
These projects have helped strengthen the Federation’s mission to improve the producers well-being in the following ways :
- Thanks to the daily price information, the coffee grower can make the appropriate decisions to maximize his income.
- It encourages the democratic participation of the coffee growers, which strengthens the organization.
- With the producer’s participation in value added businesses, the capital is democratized.
Introductory OverviewKnown for its Juan Valdez® trademarks, the National Federation of Coffee Growers is a democratic, non-profit organization, created in 1927 by Colombian farers. Today, the Federation represents over 560,000 coffee growers. Over 380,000 of them produce coffee in at least 0,5 hectares (1.2 acres) or have planted a minimum of 1,500 coffee trees, and can also elect or be elected as Federation representatives of their communities in a democratic process that takes place every four years.
The Federation provides a unique range of services to Colombian farmers, which include research and development, support and advice through over 1,000 agronomists and technicians, advertising through the 100% Colombian campaign and the Juan Valdez® coffee shops, and the provision of a transparent market environment that optimizes domestic prices.
The vast majority of coffee growers are small holders, lacking in many instances access to market information or negotiation power due to their limited production. The Federation provides growers with a network of 498 purchase points distributed throughout the country, where coffee can be sold at market conditions that reflect international prices. The price given at any of these locations not only takes into account the New York coffee exchange and premiums for Colombian coffee, but also transportation costs from the purchasing point, observed yields and average export and packing expenses. The Federation effectively provides a floor price that reflects the coffee market conditions, the current exchange rate, the costs associated with each location and the expected yields to all 498 locations at least once a day, or more than once a day if prices have a large variance in intraday trading. The prices given at each location are communicated without intermediaries, making sure that growers have timely access to market information without depending on third parties.
The IVR (INTERACTIVE VOICE RESPONSE) technology has been an essential tool to let coffee growers know the minimum price at which they can sell. Through any telephone, including those that have been installed at 290 purchase points, known as the blue telephones, coffee growers obtain information on the market prices they should expect in their communities. Thanks to this tool, which was launched with a communication’s campaign (see image), producers are better informed and can make better decisions.
Apart from providing this valuable benefit with huge social and value added implications, the IVR system has been instrumental in other projects such as:
1. In the latest coffee elections of September 2006, growers were granted the possibility to vote using their cellular phones to call the coffee line. Just a call was enough to vote for their candidate to represent them at local, provincial and national Federation bodies. These new participative channels were used by 51.685 coffee growers, who did not need to travel to the voting desks to cast their votes. This figure is hugely significant, since it represents 25.12% of all votes cast during the election and stands for an unprecedented event in the electoral processes in Colombia. We believe the provision of this technology is a breakthrough in terms of allowing a large number of constituents to be involved in decision making processes.
2. The IVR system was instrumental in allowing Colombian coffee growers to have access to buy preferred shares of Procafecol. This company currently operates Juan Valdez ® coffee shops, and launched a restricted public offering that only benefited Colombian coffee growers. Over 2 million preferred shares were bought exclusively by 22,610 Colombian coffee growers in a six-month period. Growers were able to reserve shares using the IVR system, which effectively provided access to capital markets to members of rural and often isolated communities.
BenefitsHas your project helped those it was designed to help? Yes
What new advantage or opportunity does your project provide to people?
Specific advantages include:
1. The coffee toll-free line
It is a free, reliable and immediate information system that producres can use anytime and anywhere in the country. The coffee grower is thus empowered and able to make better decisions when selling his coffee.
The figures are self-explanatory: A monthly average of 13,000 calls are placed requesting coffee prices. We estimate that a given caller provides information to at least 2 other growers, giving accurate market information to substantiate nearly 39,000 small coffee transactions per month, or nearly 470,000 per year. Growers now dial the equivalent of an 800 number or use the telephone at a purchasing location, and the IVR system provides the local minimum price. Other benefits include saving time and resources since producers do not have to commute to other locations to get the best prices.
2. Higher democratic participation resulting in a more robust organization
More coffee growers were able to participate at democratic processes due to the new voting channels that were made available to Colombian producers. The aim was to help them exercise their right to vote without having to commute to the distant urban areas. Of those who voted, 12% used their mobile telephone and 13% used a home or fixed telephone. This also meant saving time and money for the producer. However, democracy benefited the most since it gave more legitimacy and support to the Federation.
3. Access to capital markets to an often neglected population
The placing of the Procafecol share issue through the phone reservation system promoted the equitability, the ownership, democratization and the possibility of a better income for coffee growers. The IVR system made the process totally transparent and accessible to all producers without exceptions; it also decentralized the process.
Has your project fundamentally changed how tasks are performed? Yes
How do you see your project's innovation benefiting other applications, organizations, or global communities?
The coffee toll-free line project is a model for remote third world communities, where cellular phones are becoming more prevalent, and whose population is located far away from urban areas People need adequate market information systems. Non performing markets are often caused by lack of access to information or asymmetries generated by information only known by buyers.
Additionally the IVR voting system used made it possible to achieve higher participation in democratic processes in isolated rural areas. This is certainly another tool to empower communities in many regions around the world, including those of developed countries.
Finally the reservation of shares through electronic media demonstrates that these systems can be very effective in similar issues.
Overall the alternatives that the National Federation of Coffee Growers of Colombia has launched by using the IVR technology can be a model to be followed by those projects that aim to offer fairness, participation, accessibility and decentralization to scattered communities that face time-consuming or commuting problems. These projects may share the need of being supported by robust, stable and flexible systems to provide access availability at anytime, anywhere.
The Importance of TechnologyHow did the technology you used contribute to this project and why was it important?
Any technological development should be thought so that it can solve end users' problems, regardless of their contact with technology or their education background. This was exactly the contribution of the IVR (INTERACTIVE VOICE RESPONSE) Technology. This technology allows the user to directly access specialized computer solutions in real time through the telephone, and obtain information regarding different items such as price, share subscriptions and electronic voting. Furthermore, this technology helps overcome obstacles such as geography -which in the case of Colombia can be an actual challenge-, and it becomes a reliable well-timed and easy-to-use mechanism.
The Information Technology Area of the National Federation of Coffee Growers has been very careful in the selection and development of systems that fit accurately with the culture of coffee growers, the majority of which do not have primary education. On the other hand this area identified that the telephone was the preferred communication’s channel that was widely available in the rural areas of Colombia.
One of the main strengths of the Federation is to own an alphanumeric and geo-referenced database holding all the information of each one of the 560,000 coffee growing farms and its owners. This database is dynamic and permanently updated; it keeps information on social indicators that makes it possible to implement and personalize technological solutions. The development of single-target solutions is based on this kind of information according to the special objectives of each particular project. The first achieved aim, and the main purpose of developing this technological solution, was to provide the coffee growers with up-to-date and reliable market information at each purchasing point.
As for the elections, once the coffee grower identified himself using his national identification number, the IVR system was able to confirm that data and his member status and led him throughout the voting process. At the end of the process the system confirmed the success of the participation. This process generated feelings of reliability and credibility to coffee growers.
Another very important benefit of this system was the possibility of subscribing shares of the Juan Valdez Coffee Stores and the holding company Procafecol. The system confirmed the caller was a coffee grower, checked the number of shares available and matched the request. It was possible to reserve shares for up to 7 days before they were paid for.
OriginalityWhat are the exceptional aspects of your project?
It is important to point out how much the technology has helped not only to support the core processes of the organization, but also to make the coffee growers be part of the business value added chain. On the other hand its implementation has resulted in the straightening of the communication channels with 566,000 coffee growers, whose standard of living is the main objective of the NATONAL FEDERATION OF COFFEE GRROWERS OF COLOMBIA.
How is it original?
The project is original not only in achieving its stated aims of providing a competitive price floor to coffee growers around the country, but in the optimization of the IT infrastructure to use it to complementary projects and ideas.
Originally, and as part of the Federation's commercial strategy, the system permitted to inform the producers about relevant changes regarding the coffee prices through a fast, friendly and reliable mechanism, which has generated a positive answer from them and therefore has helped them to be more competitive.
Once growers were acquainted with the IVR system, ithe Federation started using it to allow growers to vote using their telephone. In Colombia nobody had ever used this voting method, even though it can also be as reliable as the usual voting alternatives.
Booking of Juan Valdez The same system and infrastructure was used for the share subscription, which had never been used before. This took some effort to convince Colombian authorities, but was hugely successful to expand capital markets and opportunities country wide.
Is it the first, the only, the best or the most effective application of its kind? All of the above
SuccessHas your project achieved or exceeded its goals? Exceeded
Is it fully operational? Yes
How many people benefit from it? 500,000
If possible, include an example of how the project has benefited a specific individual, enterprise or organization. Please include personal quotes from individuals who have directly benefited from your work.
The participation rate at the coffee elections, which reached 64.6% of elegible voters, represents a record in the history of the Federation. It exceeded the participation rate obtained at the President, Congress, Governor and Mayor elections, which lately has been within 40% and 50%, and in many other democratic processes around the world.
Another outstanding and unprecedented event has to do with the fact that the votes received through the electronic medium exceeded all expectations and amounted to over 25% of total votes. As stated late last year by Gabriel Silva, the Federation’s CEO, ."the excellent results of the coffee elections strengthen the legitimacy of our Federation and demonstrate that we have a coffee culture, which is more and more participative every time and that everyday more coffee growers want to lead their own future.
On the other hand, the placing of Procafecol´s. $20,000-million-peso shares could not have been more successful. Whereas it was estimated that 10,000 coffee growers would purchase shares, 22,610 did. Today they are direct owners of an important part of the Juan Valdez coffee shops, and the aim is to achieve that in a few years most of the 566,000 coffee producing families will become shareholders of the added value projects and receive direct profits from the higher income obtained by the company.
The most powerful social impact, however, is the correction of a market failure buy simply providing market information. This has increased the purchase price in some locations in up to 40% from transactions observed without this tool.
How quickly has your targeted audience of users embraced your innovation? Or, how rapidly do you predict they will?
The implementation process and its adoption by the coffee growers was initially achieved thanks to a great communication’s campaign carried out using information media such as newspapers, radio and television (see image, we have videos in Spanish that can be supplied if requested). This campaign helped to deal with the impact new technologies might bring about. The result was highly positive, as measured by the recorded calls per month and the participation in both the elections and the share subscription.
DifficultyWhat were the most important obstacles that had to be overcome in order for your work to be successful? Technical problems? Resources? Expertise? Organizational problems?
As for the system design, there were no inconveniences since the IVR is a tool that adapts very easily to meet the targeted needs. The Federation allocated all the necessary human as well as financial and infrastructure resources to implement these projects aiming to benefit the Colombian coffee community.
There were difficulties to obtain the fixed lines needed in purchasing points given the lack of interest to some coffee buyers. Also, the availability of tone-based phone systems was an issue, as many locations still work with rotary phones.
Additionally, obtaining the necessary approval to use the IVR system from “Superintendencia Financiera” (the equivalent of the US Securities and Exchange Commission), has also a challenged we had to overcome. Managing peak volumes of calls (30 simultaneous calls) was also an issue towards the end of the public offering, to make sure that the number of shares subscribed were not higher that the number of shares issued.
Often the most innovative projects encounter the greatest resistance when they are originally proposed. If you had to fight for approval or funding, please provide a summary of the objections you faced and how you overcame them.
During the implementation process of the IVR (Interactive Voice Response) system for the already mentioned projects, it was expected that the Colombian coffee growers would have a hard time getting to trust the system due to their scarce contact with technology, which would jeopardize its acceptance and use. This difficulty was overcome through training programs and a variety of contests that simultaneously encouraged the coffee growers to participate. All this in order to help the coffee growers get familiar with the tool and adopt it.
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