SIMMENTAL, Shorthorn and Limousin seedstock breeders are exploring the prospect of establishing a shared services business facility by mid-year.
The move is designed to improve business efficiency, share fixed costs, drive economies of scale, broaden membership services and provide risk mitigation across the three breed societies.
The arrangement would be contingent on acceptance of shareholder agreements by each of the participating societies, Simmental Australia members were told. If successful, it is proposed that the shared services business will commence from 1 July.
The purpose of the combined business was to provide finance and data administration, registrar and member services.
In 2019, the Simmental Australia board along with the boards from both the Australian Limousin Breeders and Shorthorn Society of Australia began discussions around the possibility of creating further efficiencies for breed society models. Currently all three societies duplicate many services for their members.
It was believed that creating a single business model might allow societies to provide these services with greater efficiency and effectiveness for members.
“Given the impacts of the recent drought, this process is considered important, however it is also critical that each society be able to deliver improved services to members as a result,” Simmental members were told in a communique.
Under the proposal, a new entity would be created, which will be owned by each society as shareholders, providing dedicated services to members.
“Each society will maintain its own independence, however basic services such as accounts, registrations, inventory, DNA services and all other services will be provided by the potential new business,” members were told.
The new entity would not be responsible for strategic or technical services beyond registrations, transfers, DNA submissions and inventory management.
“Every effort has been made to accommodate existing personnel from each society in the new model,” members were told.
While this model was new for Australia, similar models had proved extremely effective in New Zealand, where their Performance Beef Breeders (PBB) platform, operates along similar lines.
“This is an exciting step forward for the breed society model in Australia,” members were told.
Work is still being progressed on the finalisation of the business model and Simmental Australia said it provide members with more details once this was completed.
Great initiative, I can only see positives from this.
great move, well done.