Co-innovation for digital services – what changes, what remains, are you ready for transformation?

Strategic focus and experimentation with customers are crucial for the successful development of digital services. SmartAdvantage project partners and collaboration network members shared their thoughts and prospects on future advancements.

Digitalisation is a major global trend that is crucially transforming many sectors, including manufacturing, energy and several public services and media. Digitalisation will radically change the way the companies operate, and enabling technologies give rise to disruptive business models and entrant companies. As an example, according to the latest statistics of the World Bank there are 100 mobile cellular phone subscriptions per 100 people globally. The quick spreading of smart phones has led to major changes in the consumer behavior for the benefit of on-line media and loss of printed media like newspapers. This transformation has reflected also to the distribution of the advertisement income: in USA, the online media ad revenue exceeded that of the printed media already in 2009. While print advertising revenue’s share decreases, content is increasingly becoming the key source of revenue for many publishers.

The fact that the consumers read the news rather in the internet and mobile applications than newspapers has impacts all over the value chains. The companies producing newsprint paper have been struggling with declining demand and have reacted by closing down factories or changing production to fit new products. Digitalisation challenges incumbent companies to deploy emerging technological advancements and to renew their business. Digital transformation and opportunities were discussed in the SmartAdvantage project seminar in spring 2018. The seminar offered a forum to the SmartAdvantage project partners VTT Technical Research Centre of Finland, Tampere University of Technology, Pesmel Oy, Chiller Oy, Huurre Oy, SW Development Oy and Delete Finland Oy to share their thoughts, ideas and latest achievements in the area of digitalisation with the collaboration partners.

The forerunners´ digital strategies are not limited to technology development, but digitalization changes the way business is done. The next disruptive technology may be awaiting around the corner. The forerunners emphasize innovation and decision-making. Data, information and knowledge are in the core of this transformation. The role of the strategy is also central to the acquisition of ICT, software and enabling technologies for digitalization. Implementing acquisitions in small and manageable entities, within the framework of strategic policies, helps to implement cost-effective procurement practices and reduce risk. The development of digital services emphasizes the importance of the long-term vision, thorough understanding of customer and business benefits, and innovative approach with experimentations.

In the digital world, agility is indispensable. Silicon Valley’s start-up companies emphasize the importance of quick experimentation and failure as they boost learning: “fail fast, fail forward thinking”. SmartAdvantage project offers the companies an arena to develop and experiment with digital solutions together with their customers and other stakeholders. The experimentations reveal a variety of benefits and sources of customer value that may arise for example from improving the fleet management capabilities or optimizing total energy consumption. The customer may also benefit through the collaborative development of operational excellence, and by improved occupational safety. The experiments may also reveal benefits beyond original application. As an example, energy generated by cooling of ice rinks is used to heat other arena functions. In addition to economic value, the digital solutions may contribute to sustainable development and reduce CO2 emissions.

Not all digital solutions get air under their wings, but companies can learn also from failed experiments. Ultimately, the customer decides the benefits of digital solutions. A well-known indicator of the overall efficiency is OEE (Overall equipment effectiveness). From the client’s point of view, every OEE-percentage surge has equal value, but the cost required to achieve the benefits depends on how and by which technology the efficiency-enhancing service is being implemented. Agile methods and experiments with the customer have become part of the development of digital services. The strategy, portfolio thinking and the development of business models must be closely linked to service development. Significant, disruptive innovations are usually based on new knowledge that quickly replaces the technology or business model in use. Industrial digital transformation emphasizes entrepreneurial activity, continuous learning and the courageous ability to innovate.

More information:

SmartAdvantage – the project: https://www.vtt.fi/sites/smartadvantage

Smart asset management as a service – the report: https://www.vtt.fi/sites/smartadvantage/PublishingImages/publications/SMACC_SmartAssetManagement_julkaisu_032018_web.pdf

The World Bank indicators: https://data.worldbank.org/indicator/IT.CEL.SETS.P2

 

Helena_Kortelainen_2010
Helena Kortelainen
Principal Scientist, VTT
helena.kortelainen(a)vtt.fi

 

Yhteistyössä digipalveluihin – mikä muuttuu, mikä säilyy, oletko valmis muutokseen?

Strateginen fokus ja kokeilut asiakkaiden kanssa korostuvat digitaalisten palvelujen kehittämisessä. Ketteryys on välttämätöntä. Kaikki ratkaisut eivät saa ilmaa siipiensä alle, mutta rohkeasti kokeilemalla voi oppia. Viimekädessä asiakas määrittää digitaalisten ratkaisujen hyödyn.

Teollinen internet muuttaa radikaalisti teollisuusyritysten menestystekijöitä ja synnyttää uusia, kilpailun mullistavia yrityksiä samalla tavalla kuin internet mahdollisti Googlen ja Amazonin synnyn. Maailmanpankin tuoreen raportin mukaan maailmassa on noin 100 kännykkäliittymää per 100 asukasta. Älypuhelinten yleistyminen on vaikuttanut vahvasti digitaaliseen murrokseen muun muassa media-alalla. Teknologian mahdollistamat kuluttajakäyttäytymisen muutokset heijastuvat myös mainostulojen jakautumiseen eri medioiden välillä: USA:ssa on-line-medioiden hyvin nopeasti nousseet mainostulot ylittivät printtimedian mainostulot jo vuonna 2009.

Uutisten ja muun mediasisällön siirtyminen nettiin ja mobiilisovelluksiin on heijastunut laajasti median arvoverkostoihin aina sanomalehtipaperin tuotantoon asti. Digitalisaatio muuttaa voimakkaasti nykyisiä toimialoja, haastaa yrityksiä ottamaan käyttöön teknologian luomia mahdollisuuksia ja uudistumaan.

Digitalisaatiokehitystä ja digitalisaation mahdollisuuksia pohdittiin SmartAdvantage-hankkeen seminaarissa keväällä 2018. Mukana on kahden tutkimuslaitoksen (VTT Oy ja Tampereen Teknillinen Yliopisto) lisäksi viisi eri aloilla toimivaa yritystä – Pesmel Oy, Chiller Oy, Huurre Oy, SW Development Oy ja Delete Finland Oy – sekä yritysten sidosryhmien edustajia. Kaikkia yhdistää halu kehittää uutta, digitaalisiin ratkaisuihin perustuvaa liiketoimintaa.

Edelläkävijöiden digistrategiat eivät rajoitu teknologian kehittämiseen, vaan digitalisaatio muuttaa tapaa, jolla liiketoimintaa tehdään. Edelläkävijät korostavatkin innovaatioita ja päätöksenteon kehittämistä. Tieto, informaatio ja tietämys ovat tämän muutoksen ytimessä. Strategian rooli on keskeinen myös digitalisaation edellyttämien ICT- ja ohjelmistotuotteiden hankinnassa. Hankintojen toteutus pienissä hallittavissa kokonaisuuksissa strategisten linjausten puitteissa auttaa toteuttamaan käytännön hankinnat kustannustehokkaasti. Digitaalisten palveluiden kehityksessä korostuu vision määrittämisen sekä asiakas- ja liiketoimintahyötyjen tunnistamisen ja nopeiden kokeilujen tärkeys.

Digitaalisessa maailmassa ketteryys on välttämätöntä. Piilaakson pk- ja start-up yritykset korostavat kokeilemisen ja epäonnistumisen merkitystä oppimisessa: “fail fast, fail often, fail forward thinking.” SmartAdvantage-hankkeen yritykset kehittävät ja kokeilevat digitaalisia ratkaisuja yhdessä sidosryhmiensä kanssa. Hyötyjä ja asiakasarvoa syntyy sovelluksesta riippuen esimerkiksi parantuneen laitekannan hallinnan tai kokonaisenergiankulutuksen optimoinnin myötä. Asiakasta voidaan myös tukea toiminnan kehittämisen ja parantuneen työturvallisuuden kautta. Kokeiluissa voi paljastua myös laajempia ja moninaisempia hyötyjä: esimerkkinä uusi jäähalleihin suunniteltu jäähdytysjärjestelmä, jossa jäähdytyksessä syntynyt energia käytetään muiden jäähallin toimintojen lämmitykseen.

Kaikki digitaaliset ratkaisut eivät saa ilmaa siipiensä alle, mutta rohkeasti kokeilemalla voi oppia. Viimekädessä asiakas määrittää digitaalisten ratkaisujen hyödyn. Paljon käytetty kokonaistehokkuuden mittari on OEE (Overall equipment effectiveness). Asiakkaan näkökulmasta jokainen OEE-tason nousuprosentin tuottama taloudellinen hyöty on yhtä suuri, mutta hyödyn saavuttamiseksi vaadittavat kustannukset riippuvat siitä, miten ja millä teknologialla tehokkuutta lisäävä palvelu toteutetaan. Ketterät menetelmät ja kokeilut yhdessä asiakkaan kanssa ovat tulleet digitaalisten palveluiden kehittämisen osaksi. Strategia, palveluportfolion kehittäminen ja liiketoimintamallien kehittäminen on yhdistettävä kiinteästi palvelukehitykseen. Merkittävät, disruptiiviset innovaatiot perustuvat yleensä uuteen osaamiseen, joka korvaa hyvin nopeasti käytössä olevan teknologian tai liiketoimintamallin. Teollisuuden digitaalisessa murroksessa korostuvat yrittäjämäinen toiminta, jatkuva oppiminen ja rohkea kyky uudistua.

Lue lisää:

SmartAdvantage – projekti: https://www.vtt.fi/sites/smartadvantage

Smart asset management as a service – raportti (pdf)

The World Bank indikaattorit: http://data.worldbank.org/

Helena_Kortelainen_2010
Helena Kortelainen
Principal Scientist, VTT
helena.kortelainen(a)vtt.fi

 

Digitalisation accelerates the circular economy

When talking about the circular economy, the role of digitalisation is almost always mentioned. The deployment of digital solutions may reduce the use of resources and facilitate the implementation of circular economy systems. However, as yet not much research has been done on how digitalisation enables the transition to a circular economy in practice. The CloseLoop strategic research project of the Academy of Finland systematically assesses challenges associated with the development of new business models, and brainstorms new circular economy business models and concepts for Finnish companies. These concepts are developed and tested in collaboration with companies and stakeholders, including end-users and consumers.

Digitalisation may provide assistance for achieving three objectives of the circular economy. The digitalisation of the industrial sector increases resource efficiency, helps to close the loop of material cycles and contributes to keeping materials in use for a longer time. Intelligent solutions enable, for example, the reduction of energy consumption, optimisation of logistics chains and more efficient use of capacity. Digitalisation can be used to gain access to material-specific data and resource consumption, which enables the product life cycle to be optimised for circular economy solutions. Good examples of this include Resq Club and Lunchie, which offer restaurant food for consumers through a digital platform. They reduce food waste by providing an easy way to buy food that would otherwise go to waste.  eRENT  offers companies a platform for the digital sharing and tracking of machines and devices, making it possible to improve their usage rates.

Circular economy systems with interconnected cycles often contain large amounts of data. Digitalisation offers new ways to collect and use it in real time. This data can be put to use when decisions need to be made about the phases of the product’s life cycle, reuse of waste materials, logistical arrangements and the operators needed in the value network. For example,  Konecranes offers warehouse management as a service that includes remote monitoring and preventive equipment maintenance and advanced digitalisation, enabling the monitoring of the entire supply chain. The solution allows Konecranes customers to efficiently provide their suppliers with information on warehouse usage levels.

In the circular economy, the coordination of materials and information flows is of crucial importance. Information on the quantity and quality of products and the raw materials they contain must be collected, stored and used efficiently. It must be possible to do this in a reliable and transparent manner, for which such methods as block chain technology may provide a solution. Digital technologies enable data storage combined with materials and the use of waste as a resource.

Digitalisation comes with a lot of challenges

The key challenges of digitalisation are related to business models, data ownership, data sharing, data integration, collaboration and competence. Issues related to the availability and ownership of data are of crucial importance. There are also challenges related to the sharing of data between competitors, protection of privacy, the IPR rights and confidence building. Integration of the large amounts of data owned by various operators is also needed, because the management of data flows is also a big challenge.

Other important issues include the organisation of cooperation between different partners, the definition of joint processes, search for suitable partners and pooling of different areas of competence. The pooling of the competences in information and communication technology and sustainable development also has its own challenges. At the moment, many organizations lack sufficient competence related to the basic concepts of the circular economy and sustainable business models.

Hackathons, training and research projects promote cooperation across disciplines

Cooperation, networking, increased transparency and the provision of information are key methods for promoting digitalisation. Collaboration can be practiced by sharing expertise between organisations and pooling competences between different actors. The operators should come from different fields and include both small and large organisations. In training, the cooperation between schools and enterprises could be increased. Various competitions and hackathons could be increasingly used for cooperation purposes. Participation in research and development projects is also a good way of creating cooperation networks.

It is important to involve consumers or end-users in the planning and implementation of a service, because consumers themselves function as service providers in many services that use platforms. In such a case, getting a critical mass involved in the process from the outset is of paramount importance, and the service must offer a first-rate solution to consumer needs in terms of both attractiveness and usability. One example is Zadaa, which provides consumers with a mobile application that makes it easy to put used clothes up for sale and to find clothes that fit. Digital solutions make it possible to reach consumers and end users in a more efficient way than before. It is important to note that instead of the earlier one-way communication, the solutions needed today must allow end-users to give feedback on products and services.

Read more: www.closeloop.fi

 

Maria Antikainen VTT

 

Maria Antikainen
Principal Scientist
maria.antikainen(a)vtt.fi
@MariaAntikainen

 

Teuvo Uusitalo VTT

 

Teuvo Uusitalo
Senior Scientist, VTT
teuvo.uusitalo(a)vtt.fi
@TeuvoU

 

 

Kiertotalous_digitalisaatio

Under the theme “Digitalisation as enabler of the circular economy”, we organized a workshop at the From Waste to Valuables event held at the Hotel Torni of Tampere on 23 November 2017. It was attended by 62 representatives of business and research organisations. The workshop presented three innovative examples in which digitalisation forms an essential part of the operations: Uusioaines Oy, Hiedanranta and Resq Club. We discussed in small groups how digitalisation contributes to the circular economy, what challenges this entails and how they can be solved

Digitalisaatio tuo uusia palvelumahdollisuuksia ja asiakasarvon lähteitä käyttöomaisuuden hallintaan

Digitalisaatio luo uusia palvelumahdollisuuksia käyttöomaisuuden käyttöön ja ylläpitoon. Yrityksissä tarvitaan analytiikkkaosaamista ja asiakkaiden liiketoiminnan ymmärtämistä, jotta näitä mahdollisuuksia voidaan hyödyntää. Haasteena on tunnistaa ne hyödyntämättömät mahdollisuudet, joilla on merkitystä riittävän laajalle joukolle maksavia asiakkaita.

Väitämme, että kokonaisvaltainen näkemys asiakkaan prosesseista tukee palveluntarjoajan tuote- ja palvelusalkun kehitystä. Alla olevassa kuvassa esitetään digitaalisten palvelujen kehitysprosessin tärkeimmät tekijät. Kehitysprosessin aikana on erityisen tärkeää pyrkiä ymmärtämään asiakastarpeita ja asiakasarvoa mahdollisimman hyvin.

image_FI

Digitalisaation mahdollisuuksien ja vaikutusten ymmärtämiseksi laitevalmistajat (OEM) ja palveluntarjoajat ovat laatineet tiekarttoja digitaalisten teknologioiden käyttöönotosta. Digitaalisten palvelujen kehittämisessä keskeisiä tehtäviä ovat asiakkaiden liiketoiminnan analysointi, asiakkaalle tuotettavan lisäarvon määrittely sekä palvelujen suunnittelu.

Luotettavuus- ja kriittisyysanalyysiä voidaan soveltaa tunnistamaan, missä kunnossapito ja investoinnit voivat saada aikaan parasta vastinetta rahalle, paljastamaan asiakkaan prosessien pullonkaulat sekä mahdollisuudet digitaalisiin palveluihin. Elinkaarikustannus ja –tuottolaskelmat (LCC / LCP), elinjaksokustannus- (TCO) ja kokonaistehokkuusmallit (OEE) antavat lisätietoa tehokkuuden ja taloudellisen toiminnan näkökulmista. Suurten kone- ja laitekantojen tietoja voidaan hyödyntää tarjoamaan vertaisarvioitua tietoa.

Viime vuosina on kerätty suuria määriä käyttö- ja huoltotietoa. Tätä tietoa on kuitenkin usein hyödynnetty varsin vähän. Suhteellisen pienet panostukset esimerkiksi kunnossapitohistoriatiedon analysointiin voivat auttaa tunnistamaan, missä kunnossapitoa tarvitaan eniten, missä suurin osa kustannuksista syntyy ja missä on eniten toiminnan kehityspotentiaalia.

Digitalisaatio luo mahdollisuuksia uusille liiketoimintamalleille. Liiketoimintamalleissa keskeisiä elementtejä ovat arvolupaus, arvonluonti ja arvon haltuunotto.

Arvolupaus

Arvolupaus ja ymmärrys siitä, miten arvo syntyy asiakkaiden prosesseissa, ovat digitaalisen palveluliiketoimintamallin ytimessä. Lähtökohtana on visio teknologiasta, prosessimuutoksesta tai palvelusta, jolla saadaan aikaan myönteinen muutos asiakkaan toimintaan. Alusta alkaen tarvitaan systemaattinen lähestymistapa. Tarvittaessa arvolupausta muokataan liiketoimintamallin kehittämisprosessin aikana. Digitaaliset tuotteet ja palvelut edellyttävät usein arvolupauksen uudelleenarviointia, jossa tuotteiden ja palvelujen koko elinkaari on otettava huomioon. Digitalisaatio mahdollistaa suorituskyvyn myymisen tuotteiden sijaan, koska tuotteiden käyttöä voidaan seuranta ja valvoa. Asiakasprosessien optimointi on myös alue, jossa digitalisointi avaa uusia mahdollisuuksia. Tällöin palveluntarjoajien analytiikkamalleja ja asiakkaiden toimialatuntemusta on hyödynnettävä tehokkaasti yhdessä.

Arvonluonti

Asiakassuhteet muuttuvat yksittäisistä liiketoimista kohti jatkuvaa kumppanuutta, ja uusia asiakassegmenttejä voidaan hankkia digitaalisten tuotteiden ja palveluiden avulla. Asiakkaiden kanssa on tällöin tärkeää yhdessä määritellä ja sopia mittarit, joita seurataan palvelun laadun varmistamiseksi. Uusia kumppanuuksia saatetaan tarvita arvolupauksen toteuttamiseksi. On tärkeää tunnistaa nämä kumppanuudet ja luoda tarvittava liiketoiminnan ekosysteemi. Yhteistyökumppanit voivat sisältää esimerkiksi pilvipalvelujen tarjoajat, analytiikka-asiantuntijat ja ICT-yritykset. Hyötyjen jakamismallit on luotava yhdessä.

Arvon haltuunotto

Digitalisaatio tarjoaa uusia mahdollisuuksia tavoittaa asiakkaita suorilla kanavilla, myös maailmanlaajuisesti. Lisäksi tulee mahdollisuuksia asiakasvuorovaikutukseen liittyvien prosessien automatisointiin esimerkiksi automatisoimalla tilauksia tuotannosta saatujen tietojen perusteella. Digitalisaatio mahdollistaa jatkuvan kassavirran ja tuotot elinkaaripalveluista, joiden hinnoittelu voi perustua yhteisiin hyötyihin. Tietojen keräämiseen, tallentamiseen ja analysointiin liittyvät kustannukset on kuitenkin otettava huomioon, koska esimerkiksi data-analytiikkaan tai pilvipalveluihin liittyviä palveluita on hankittava.

Kohti uusia digitaalisia liiketoimintamalleja

Digitaalisten teknologioiden nopeasta kehityksestä huolimatta liiketoimintamallit ovat toistaiseksi pysyneet pitkälti transaktiopohjaisina. Näyttää kuitenkin siltä, että arvopohjaiset ansaintamallit ja arvon jakamismallit tulevat entistä tärkeämmiksi erityisesti tulevissa liiketoimintaverkostoissa. Tämän vuoksi tarvitaan uusia valmiuksia ja työkaluja, kuten arvon jakamiseen liittyviä malleja, keskeisiä suorituskykymittareita ja elinkaarikustannusten ja -tuottojen laskentamenetelmiä.

Uusi raportti ”Smart asset management as a service” esittelee lähestymistapoja ja menetelmiä, joita voidaan hyödyntää digitaalisten käyttöomaisuuden hallinnan palvelujen kehittämisessä.

Teuvo Uusitalo
Senior Scientist, VTT
teuvo.uusitalo(a)vtt.fi
@TeuvoU

Jyri Hanski
Research Scientist
jyri.hanski(a)vtt.fi
@jyri_hanski

Toni Ahonen
Senior Scientist
toni.ahonen(a)vtt.fi
@ahonentta

New service opportunities of customer value through digitalization in asset management

Digitalization offers several new service opportunities for the operation and maintenance of asset fleets. Companies need competencies in analytics and an understanding of the customer’s business to utilize these opportunities. The challenge for companies is to identify untapped opportunities that are relevant to a large enough number of paying customers.

We argue that a holistic view of the customer’s processes supports the development of the service provider’s product and service portfolio. The figure below shows the key elements related to the development process of digital services. We particularly highlight the importance of customer knowledge and the understanding of customer value creation being utilized throughout the service development process.

image

 

In efforts to understand the potential and impact of digitalization, asset owners, original equipment manufacturers (OEMs) and service providers have established their roadmaps for the adoption of digital technologies. Roadmapping for digitalization and analysis of the value potential related to circular economy, as well as comparisons of the customer organizations’ and service provider’s roadmaps and plans are among the key tasks to be done when starting to identify concrete steps towards digital services.

Reliability and criticality analysis may be applied to identify where maintenance and investments could result in the best value for money and also to reveal bottlenecks in the customer’s processes and the potential for digital services. Life cycle cost and profit (LCC/LCP), Total Cost of Ownership (TCO) and Overall Equipment Efficiency (OEE) models provide additional information in terms of efficiency and economic measures. Data regarding large fleets may be utilized to provide benchmarked knowledge and act as a gap analysis for the customer.

Large amounts of operations and maintenance data have been collected in recent years; however, use of this data has often been limited. Relatively small investments in the analysis of maintenance history data, for instance, may provide significant support in identifying where maintenance is most needed, where most costs originate and where the most potential lies in operations and maintenance.

Digitalization creates opportunities for new business models. Key elements in business models are the value proposition, value creation and value capture.

Value proposition

The value proposition and an understanding of how value is created in customers’ processes are at the core of the digital service business model. This begins with a vision of the technology, process change or service with which a positive impact on the customer is to be achieved. A structured approach is needed from the outset; however, there is room for iteration regarding the value proposition throughout the business model development process. Digital products and services require rethinking the value proposition. The whole life cycle of products and services must be considered. Digitalization enables new ways of selling performance instead of products, as it is possible to monitor the use of products. Optimization of customers’ processes is also an area where digitalization opens new opportunities. This is a particular area where novel analytics models and domain knowledge of the customer and provider organizations need to be efficiently utilized together. Data analytics provides information that can be used in improving the efficiency of processes.

Value creation

Customer relationships change from individual transactions towards continuous partnerships. New customer segments can be considered with digital products and services. It is important, jointly with customers, to define and agree the KPIs that will be monitored to ensure the quality of service. New partnerships might be needed to deliver the value proposition. It is important to identify these partnerships and create the business ecosystem. Partners could include, e.g. cloud service providers, analytics experts, and ICT companies. Models for sharing benefits within the ecosystem need to be established.

Value capture

Digitalization also provides new opportunities for reaching customers through direct channels, as well as globally. Furthermore, digitalization enables the automation of processes related to customer interactions, e.g. by automating orders based on data received from production. Digitalization provides new opportunities for continuous cash flow and revenue from life cycle services. Pricing can be based on shared benefits. However, costs related to collecting, storing and analysing data need to be taken into account, and services related to, e.g. data analytics or cloud services may need to be purchased.

Towards new digital business models

Despite the rapid development of digital technologies, business models have so far remained largely transaction-based. However, there seems to be a mutual understanding that value-based earning models and value sharing models will increase in importance in the future, specifically in future business networks. Capabilities and tools are required, such as measurements for value sharing, key performance indicators and models for life cycle costs and profits.

Teuvo Uusitalo
Senior Scientist, VTT
teuvo.uusitalo(a)vtt.fi
@TeuvoU

Jyri Hanski
Research Scientist
jyri.hanski(a)vtt.fi
@jyri_hanski

Toni Ahonen
Senior Scientist
toni.ahonen(a)vtt.fi
@ahonentta

New report on smart asset management as a service presents approaches, methods and frameworks that can be utilized in the development of digital asset managem

Open technologies will democratize AI

The ongoing digitalization and AI-driven change of the global economy, national economies, and corporations has started and seems to have no end in sight. This change represents societal disruption with many impacts. Continuous change, development and experimentation is the new normal. In order to stay competitive, organizations need continuous exploration of opportunities to exploit data and AI technologies to improve existing business processes and offerings, as well as to find new ones.

A recent PWC report estimates Artificial Intelligence (AI) could make $15.7T potential contribution to the global economy by 2030[i].  The same report identifies nearly 300 use cases for AI spanning business and society.  Finland’s goal to become a leader in applying AI represents an ongoing digitalization and societal change[ii].

AI and the information, communication and automation technologies used in its realization are developing at a breathtaking pace. Development is so fast that education systems face challenges to meet rapidly changing skills needs in the training of workforce to the labor market. Various on-line courses and mini-degrees have increased their popularity in response to rapid skill development needs[iii].

Availability of open AI technologies and related pool of experts has been growing steadily over the past few years.  In 2017, the GitHub community for open source software developers reached 24 million developers working across 25 million repositories of open source code[iv].  Open AI technologies have become a serious option for commercial AI technology offerings.

For example, Google has opened the source code of its machine learning platform behind its own production services, which has created a significant developer and user community around it. In 2017, TensorFlow and TensorFlow Models were two of the top ten most active code repositories on GitHub. Several other AI technologies have also become available with open source licenses.  Just under half of the 100 largest companies in the United States (by revenue) use GitHub Enterprise to build software.  Furthermore, to address the AI skills shortage, globally only 5 thousand teachers and 500 thousand students actively used GitHub in 2017.

Development of new services requires strong AI technology expertise

VTT and IBM Research – Almaden are in research exchange co-operation at Silicon Valley. The goal is to study architecture, ecosystem and future development of open AI technologies from the viewpoint of AI systems development and engineering. Preliminary results of the work are published on a joint blog (http://opentechai.blog) and the topic is discussed at the international OpenTech AI Workshop in Helsinki.

The advantages of open AI technologies include rapid pace of development. The research activities on the field of AI produce new algorithms and machine learning models. For reproducibility of results, these are often implemented and made available with open technologies first. In addition to open source code, lot is happening also around open datasets, machine learning models, benchmarking and leaderboards. The ecosystem around open AI technologies has emerged and is evolving rapidly. This evolution is not only worth following in the sidelines, but calls for active participation to research, development and exploitation of open AI technologies. Clarifying the role and importance of open AI technology for any organization is wise preparation for the future.

The evolution of open AI technologies is a development that has emerged during the past few years. This is continuation to the open source development in software products, which started already earlier. The open development on AI technologies is democratizing opportunities for exploitation of AI; It enables building needed skills, code sharing and exploitation independently of individual vendors in an open ecosystem. Also in the field of AI, value creation and commercial competition are shifting from software products to applications and related services. Here crucial is strong and versatile expertise on AI technologies and capability to apply new and rapidly evolving technology together with customers.


Daniel Pakkala
Principal Scientist, Data Driven Solutions, VTT

Jim Spohrer
Director, Cognitive Open Technologies, IBM

For more information:

http://opentechai.blog

https://developer.ibm.com/opentech/2018/01/29/helsinki-march-2018-opentech-ai-workshop/

[i]  PWC (2017) Artificial Intelligence Study. https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html
[ii] VTT (2018) Finland AI Strategy. http://www.vttresearch.com/Impulse/Pages/Finland-seeking-top-spot-in-application-of-artificial-intelligence-AI.aspx
[iii] For example, for a freely available, easy to access online set of courses see http://cognitiveclass.ai
[iv] GitHub (2017) State of the Octoverse. https://octoverse.github.com/