Innovations

What Real people say about digitalisation and technology disruption?

This month Si2 Partners were at Copperbergs’s Field Service Forum running a panel discussion on how different leaders are coping with the challenge of gaining competitive advantage through technology.

We ran this event because we were fed up with listening to industry guru’s telling us what was possible, but instead wanted to hear from real people how they are approaching this challenge. The result was stunning in its simplicity. Real people do not focus on technology. Instead their priorities are on:

  • Value
  • People
  • Play then scale

But like all simple messages, digging into the details reveals that the transformative nature on organisations and culture is so deep, its much more about change management.

Along these lines, the first key message revealed by our expert panel was that technology in service is an enabling capability, which allows the communication or analysis of information. It is not the place to start but more the place to finish.

In fact nearly all our panel said that their start line was either the customer or a business need. Two common themes emerged:

  1. Enlightened leaders who intuitively recognise the potential for technology to grow their business and are willing to invest. A good example of this came from ThyssenKrupp whose commitment to the Industrial Internet of Things (IIoT) comes from the CEO himself.
  2. Business Unit leaders that deeply understand how they can influence their customers profitability. For example at Al Shirawi Enterprises, a Scania Truck dealership in the Middle East, they recognised that fuel consumption represented 35-40% of the truck’s Total Profit of Ownership (similar to Total Cost of Ownership, but looking at the profitability to the supplier). This insight helped them concentrate all their efforts on developing service propositions and supporting technologies that reduce fuel consumption.

All the panellists stated that leadership support is critical and if missing, great initiatives stay localised or worse stagnate.

But its not just about people and leadership. For example just being determined to taking an Outside-In perspective can make a big difference. At Swisslog they have been running workshops with their customers to explore together how to develop processes and products to create new value. This co-creation process is helping them to develop a much clearer view of how to use technology to gain competitive advantage.

If understanding the customer’s value chain and needs is the start point, then the attitudes and mind-set of the people employed by an organisation appear to be key to moving ideas forward. One of the people challenges an organisation can face is to move away from the push style of product sales thinking, where a transactional approach based on specifications and features are the norm. In fact Service or Solution sales requires a much more pull style, which is based on collaboration with the customer. This often means that from the OEM’s perspective, sales, service and engineering must collaborate to sell and deliver service-based solutions, which means cutting across the traditional organisational silos. The implication is that to be effective, new approaches to organisational design and performance management have to be found. This is why many of the leaders on the panel stated that being successful in implementing transformative technologies is fundamentally a major change programme. They saw that technology could present an opportunity to re-imagine processes and reskill their workforce to overcome skill shortages caused by aging workforces. The bottom line is that the greater the change in the business model, the more change that needs to be managed, which is important for managers to consider early in their programme as they scale up solutions across their organisation.

At a more practical operational level, it’s also important to recognise that different cohorts and groups in you organisation have different skills and approaches which can be leveraged to achieve faster change. For example at Stedin, the Dutch Energy Utility, the use of customer data has become an key element to efficiently rolling out smart meters across the Netherlands. They recognised that they had younger more data savvy resource in their organisation who might be able to leverage the data analytics more effectively. By giving these employees the space to develop their ideas, they have been able to more actively leverage their data to improve operating margins.

The third common theme was that it’s not a question of having an idea and rolling it out across the organisation. In fact there is an element of play before scale. Thyssenkrupp started their journey by first connecting up their equipment and running small pilot projects to see how to use the intelligence they created. Stedin ran small pilots to check the data integrity of their analytics on smart meter installation, before quickly scaling up.  These small projects not only allow the solutions to be developed, they also enable a deep insight into the true customer value to be gained, which makes it much easier to demonstrate business success for both internal stakeholders as well as prospective clients. Many companies have taken this approach when looking at remote solutions and found that by saving technician visits they can develop a very clear business case. This piloting process becomes more important for more complex solutions where the value proposition is more complex and more capability needs to be developed. Again a common theme from the panellists was to take many small steps to develop capability rather than giant leaps into the unknown. The recommendation was to follow an iterative agile approach of plan, do, learn, plan, do, learn……..

These were the three common themes that came out of all our discussions. Certainly the message to leaders is not to be intimidated by the technology, the guru’s or the terminology. Instead they should rely on their own business acumen to develop action plans and strategies in these three key areas. Do that and the technology and ‘scale up’ will follow.

Many thanks to our panellists at the Field Service Forum who talked about the challenges they face every day so eloquently:

  • Ivo Siebers: Head of Global Logistics ThyssenKrupp Elevators
  • Lars Moller: General Manager After Sales Al Shirawi Enterprises
  • Steve Thorp: UK Service Director and global responsibility for Industrie 4.0 strategy at Swisslog
  • Barthjeu Ammerlaan: Head of Service Operations, Stedin

Nick Frank is a Co-Founder of Si2 Partners. The original interview can be found through this link

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