Economic forces driving


The importance of an information system (IS) for the operation of any organisation or business nowadays is widely recognized. The aim of implementing an information system is to improve the efficiency/effectiveness of an organisation, According to Beynon (2009) an information system is a communication and interaction between people. Information systems and the organisations they support are complex, artificial, and purposefully designed. They are composed of people, structure, technologies, and fork systems (Bunge et al, 1995).

This paper looks at the Economic forces driving the use of Information system (IS) implementation in the sheep industry in the United Kingdom (UK). Currently the use of computerised systems by farmer is in use. Some famers use relatively sophisticated information system (IS) to support their whole business, it has also been said that most of the farmers do not use the computerised system, rather they prefer to make use of paper record.

The main aim of the proposed electronic tagging system is not only to monitor the amount of sheep in the United Kingdom (UK), but also to control harmful diseases that may have devastating effect if they should occur and are not properly managed which in turn will affect the economy of the country. A significant fact is that in 2007, the UK sheep industry was worth £628million in total (Barclays, 2007). Another benefit of the tracking system is the ability to track animals through a production system, which can help minimize the extent of a disease outbreak investigation. According to Smith et al (2005) ''Tracking'' has been defined by some as the ability to follow the path of an item (sheep) as it moves downstream from beginning to end;(birth to harvest or death). The system is already in use in countries like Australia and the United State and till date it has been a huge success to the economy of the country.


The need to have an information system (IS) has become increasingly important, information system as indeed become very important for any organisation to perform effectively in its every day activity. An effective (IS) is an integral part of any business or organisation. An information system should be designed in the sense that the key features of such system need to be determined prior to the construction and implementation of the system, the following are some benefits of an effective Information System.

  • Accuracy: Increase the accuracy of information
  • Quality : Provide better quality information
  • Usability : Provide more useful information
  • Flexibility: Ability to use information more flexible
  • User satisfaction: Increase work satisfaction
  • Reliability: More reliable service
  • Productivity: Increase level of working
  • Speed: Getting information quickier
  • Volume: More information can be stored

According to Beynon Davies (2009), he explained information system as a system which involves the communication of people; it involves collection, processes and dissemination of information. The new system proposed by the European Union (EU) under the directive 21/2004 to have all sheep tagged by 1st Jan 2010 will go along way in dealing with future disease outbreak and affect the economy of the UK in a positive way. The main reason of the proposed system implementation was because of the previous diseases outbreak. An example happened in the year 2001 ,when there was a outbreak of foot-and-mouth disease (FMD), the impact of the disease was felt in France, the Republic of Ireland, the Netherlands and Northern Ireland, but the impact was greatly felt in Britain (Alister Scott et al, 2004).

The negative effect caused the department for environmental, Food, and Rural Affairs (DEFRA, 2003) to publish a preliminary cost study of the implementation of EC 21/2004 in the UK, it was concluded that the use of the electronic identification has a lower cost than the conventional system (C. Saa et al).The need for sheep to be identified and the traceability of the sheep are very important both in disease control and to the consumer.

The current identification system for sheep's in the United Kingdom (UK) has its drawbacks. Examples of errors that occur are wrong data entry in a paper-based system; also it might slow down livestock market selling process. The new system says that all sheep must be identified under DEFRA, and must have a unique number. This will allow DEFRA know the amount of sheep on a particular farm, and also in the country. DEFRA use a specific ear tagging system (double tagging) for the current cattle system in the country. The benefits of the system are very significant for the agricultural and stockbreeding areas, the United Kingdom as the highest population of sheep in Europe, currently there are about 34million sheep's in the country, the economic benefits of the system will have a huge impact in the country compared to other countries, currently there are 150,000 sheep identified electronically in Saudi Arabia by Shearwell Data limited, countries with a sheep population of over 600,000 threshold will be affected by the EID regulation.


The European Union (EU) issued a regulation for tracing every movement and origin of a particular animal (sheep), to this end the United Kingdom (UK) government from 1st of January 2010 will implement the use of EID tagging system to monitor the movement of sheep in and out of the country. An information system will be implemented having a central database.

The implementation of any new information system will come with some issues; Examples of some of the issues that may arise will be user resistance to the new system and huge implementation cost. The Radio frequency identification (RFID) will be used, today RFID is referred to as a generic term for technologies that use radio waves to automatically identity people or object (Robert, 2006). The system however might have some problems due to incorrect installation. Electronic interference can affect the operation of the (EID) system, metal poles, rails, electronic motor are some materials that can interfere with the operation of the system. To avoid the problem the antenna works best when installed on wooden rails. The EID tag is a microchip that reads electronically in a matter of seconds by producers who have the panel reader. The transponder is placed in the animal ear, when the transponder in the animal is read, it then transfer the reading to a remote computer which is located at the central database. Some of the records that are kept in the database are, weight gained or lost, breeding history, birth history, e.t.c. These data's are necessary for the stakeholder in decision making.

Central Database

The purpose of the central database in this case is to store information related to the management of animal tracking and to monitor the information at a central level. The central database will have all data's of farm that are registered to the animal using the RFID tracking device (system). The central system will enhance communication with the local subsystem which will be located on each farm.

Discussions and Analysis

Economic forces are very important in the implementation of an Information System (IS) system. 'Information systems are critical to the organisation performance in economic markets' (P.B Davies, 2009). An important option in preparing for a potential outbreak of an infectious livestock disease is to initiate an animal tracking device (System). Apart from giving vital information about animal movement, the main aim is to improve disease management.

Economic Efficiency:

The system has a lot of advantages, the economic efficiency of an animal tracking system will greatly depend on factors such as inters herd contact rates. The economic factor of implementing the system is very important in a case of highly infectious animal disease outbreak, the system will enable a substantial economic losses.

A study looked into the economic consequence of the food-and-mouth disease outbreak in the united state (US), with increased level of sheep traceability and surveillance concluded that total customer and producer combined losses from the disease would decline from $266.3billion to $50.3billion with a depopulation rate that rose from 30 percent to 60 percent of latent infectious herds, which was attributed to increased animal traceability (usda, 2009).

Improvement in The Beef Market:

Another economic factor beside that is , consumers may be willing to pay more for a meat product that are traceable, According to Golan et al (2004) farmers who's sheep are traceable on a system possess otherwise unobservable attributes, such as current vaccinations, appropriate feeding procedure would potentially be able to sell their animals for higher price.

Trade Improvement:

This will also affect the trading aspect with other country, a country known with a good information systems (IS) on livestock will attract a huge amount of trading with other countries; the consumer may also be willing to pay for other characteristics beside traceability, which can be verified using animal (sheep) tracking system, such as humane animal treatment. Due to globalisation, people now trade internationally, the new system will not only improve trading between countries in Europe, but will also enhance trading with countries from different continent, currently the UK as 34million sheep's, if implemented successfully it will affect the economy of the country In the area of global market extension, Productions, distribution along with consumption are activities that deliver numerous values, which operates both within and between economic actors; the economic actor are the suppliers, regulator, customer, competitors. Beynon (2009) describe an economic system as the way in which groups of humans organise their material provisioning, and essentially involves the coordination of activities concerned with this.

Enhance Employment:

The new system will increase employment rate in the country, as farmers will look to have an IT specialist around. Information system is very vital in organisation performance in economic markets, as various systems managers will be needed on each farm for maintenance of the system.

Apart from the economical factor, other factors can drive the use of IS, such as political forces, social forces and the technical forces, but the economic forces is the most vital amongst all. The essay will also look into some aspect of cost implementation of the proposed system.

According to Michael Porter (Porter and Millar, 1985) he explains an economic environment using various numbers of dimensions, involving relationship between four of the types of economic actors.

Competitive structure of the industry:

The issue of pricing will occur due to the implementation of the electronic system, therefore it's vital for the country to have a good system in order to be at the fore front of the industry. The most vital role that highlights the role of Information Technology (IT) in competition is '' value chain''. The value chain of a product is measured by the amount customers are willing to pay (Porter and miller, 1985). An organization will have a competitive advantage if it operates at a lower cost.

State of technological deployment in the environment

The use of the EID system will boost the market; in some markets the use of technology is important to the competitiveness of the industry. According to Porter and Miller (1985) companies that anticipate the power of Information Technology (IT) will be in control of event. Therefore, the deployment of technology is necessary in the economic environment for greater competition.

Basis of competition

The basis of product and service will be the main way in which the organisation competes in the economic environment. Organization will compete in the economic environment by reducing meat production, thereby increasing price of beef in the long run. Organizations also engage in the sheepskin. A market survey commissioned by meat south in south west of England regional development revealed that in the year 2005 raw lambskin wool on export realized £2.6m per million skins (*9.74m) and £4.9m per million for raw wool-on sheepskins (*2.54m)


The implementation of the new system would have its itches; the following factors if not properly dealt with will affect the successful implementation of the new system.

  1. Farmers across the United Kingdom (UK) will require sufficient training in order to use the new system appropriately; however the success of the program (training) cannot fully guarantee a successful implementation. The initial phase of any new system is very important to the overall operation.
  2. The electrical device used will have its effect. The conditions of the weather will go a long way in determining the success of the new system. The electrical device used (EID) should be built in a way to adapt to any weather condition.
  3. The new systems will also increase the responsibility of each farmer, which may cause user resistance.
  4. The lack of system testing and a huge implementation cost.
  5. The lack of well communicated aims and objectives amongst stakeholders.


The farmer says the current system in the UK is simple and efficient. There is a form of resistance on the part of the farmers and this can be narrowed down to the implementation cost, the famers says the new process will be too expensive and that they can't afford it, one of the way to fight against such resistance is to subsidize the price of each EID equipment. Below is a survey snapshot table.

Derfa (2008) came up with an analysis concerning farmer's income which was between £5,900 and £8,700. They estimated that the EID equipment will cut down 40% off the farmer's income overnight. The issue of training comes up and if not treated urgently will affect the successful implementation of the system. The government should subsidize the price of the equipment and should also introduce a training course for the farmers; a clear vision of the system should also be made known. The proposed tagging systems as lots of benefit to the famers and to its economic environment, though the farmers are resisting the system, but the benefit will be seen at the long run.


The paper highlights the economic factors behind the successful implementation of an information system in the sheep industry. The implementation of the new system will come with huge benefits to the sheep industry and to the country. A major point noted in the paper was the impact of trading between countries. Also stated in the paper was the worth of the UK sheep industry, which as at 2007 was worth £628million. During the Foot and Mouth disease outbreak, the impact was felt more in the UK. With the introduction of the new system and in an event of disease outbreak, the system will effectively reduce the disease management which in turn will not affect the economy of the country. Therefore with the new system in place and with appropriate management by the stakeholders, the income of the sheep industry will increase tremendously. The paper also suggested the reduction of the EID equipment and need for sufficient training on behalf of the farmers to avoid resistance. The full implementation of the system will make the sheep industry in the UK a lucrative business for the country.

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