Industrial renewal is upon us – be bold and gain a foothold!

Digitalisation, automation, IoT, AI, blockchain, 3D printing – I could continue the list with quite a few juicy terms. How many times have you read or heard one of these words during the last week? I dare to wager that it was quite a few. Certain themes rise to the surface and remain a topic for discussion, until a new trendy word rises to everybody’s lips. Instead of using inordinate amounts of time and energy around an individual concept or technology, we should shift our focus to the change taking place in the big picture and to what kind of a future we could create with the help of various technological enablers.

New trends force changes upon the current operations

Automation and robotisation alone are not enough to answer the challenges placed on companies by the global market and the increasingly demanding customer needs. Companies have no choice but to draw parallels between their development and, for instance, the following trends:

  • Smart products, production systems, production and delivery chains;
  • Renovation of the design of products and production through digitalisation and automation;
  • Need-based production, real-time delivery chain, distributed production;
  • Robotisation and flexible automation combined with artificial intelligence;
  • Service business with (or without) the help of digitalisation; and
  • Industrial ecosystems and platform economy.

I believe in the claim that the smart products and services of the future will be created in new industrial ecosystems supported by a globally connected platform economy. The leap from today to this vision seems wild, and the ability of companies to see the steps they need to take can be limited, when there is no concrete action plan available. It is therefore gratifying that we can find examples around us where a company’s own desire for development launches a networking project full of growth potential.

Expand your operations with the help of industrial networks

When a Finnish medium-sized machine manufacturer wishes to broaden its offering in order to speed up its growth in the global marketplace, the traditional model is to start planning business acquisitions. It would be more agile to avoid the risks and slowness of acquisitions by establishing a network structure, where a number of companies linked to the sector in question commit to creating a shared offering.

For global customers, this network appears as a seamless entity, while inside it, different actors work according to their own core competencies and deliver their share of the total. In this model, the success comes from working together, challenging each other within the network and obtaining help from select key customers.

Automation streamlines and adapts production

The radical renovation of design, manufacturing and service business with the help of digitalisation builds competitiveness and business opportunities for the industry also in countries with traditionally high cost structures. Robotics offers various solutions for making production more efficient and increasing productivity in the manufacturing industry.

However, it is not a question of robotisation only; an industrial company must be able to increase its agility and flexibility in order to create solutions that maximise the customer benefit. New manufacturing processes and the delivery chains built around them will bring customer-specific solutions up to a level we have not yet seen.

Thus far, automation has mostly been linked to equipment and production processes. However, the real leap in productivity will take place at the systemic level, where the entire delivery chain is examined, boldly questioning the current operating models. Must a company producing products have its own manufacturing capacity, or could it connect to a network of manufacturing plants and commission the manufacturing of the products from the plant that is most optimal to the need? On a longer term, one could think that this kind of a system is self-learning and able to adapt to the production needs of the owner of each brand. Once again, these are major questions from the perspective from the Finnish manufacturing industry; after all, we wish to ensure that we have strong connections to the future network models.

We help companies realise bold and ambitious visions

VTT possesses strong competence in the above-mentioned themes of industrial renewal, and even now, we are involved in enabling the birth of several industrial networks. In addition to technological research and development, we are a natural and competent partner also for the creation and organisation of new ecosystems.

Mika Toikka VTT

Mika Toikka
Vice President, Sales and Business Development
(Smart Industry and Energy Systems)

Together but individually at the same dining table – how is this possible?

At the end of the working day, many of us browse the shop shelves, hungrily wondering what to make for dinner. Despite the huge choice, everyday food tends to vary little in many families.

We would find shopping easier if our mobile phones could tell us what we had in the fridge. It would be even better if our phones displayed recipe suggestions and a shopping list of missing ingredients. And what if an application remembered what flavours you like, or which ingredients are unsuitable for you or family members?

In VTT’s Food Economy 4.0 Vision this is an everyday reality. In the future, food production will become service-based and personalised. Digitalisation – which enables the collection and combination of information on issues such as individual consumer habits, the nutritional content of food and the environmental impacts of food production – is a driver of this development. New kinds of digital services for consumers can be created by combining information from various sources, and connecting it up to devices and products.

Information is a key raw material

Due to the digital transformation, the consumer has an ever greater choice of foods in line with his or her needs, values and expectations. In addition to safety, localism and responsibility, consumers are interested in the health-promoting properties of food. This is reflected in the popularity of blogs, online services and television programmes on the subject. Sensor technologies are also becoming cheaper and the development of smart packaging is helping consumers to reduce food waste due to spoilage.

Food producers must change their product portfolios to respond to the needs of individual consumers. To build comprehensive well-being services, we will need open-minded collaboration between sectors and must combine information from a range of sources.

By combining information, we can create, say, food services that support the well-being of the elderly or people with special dietary needs. In addition, nutrition could be connected to applications, such as activity bracelets, which monitor well-being. At VTT, we are developing the Snacktracker, which guides the user towards a more balanced eating rhythm.

Individualised food does not mean dining alone

The idea of individualised, customised food can conjure up alarming images of algorithm-controlled eating and the loss of human interaction. However, individualised food does not mean dining alone.

Food will still bring people together – individual choices do not mean living in a bubble. Choices are shaped by a community’s values and opinions; customised food can be eaten around the same table. Digitalisation offers new channels for community and sharing, in addition to face-to-face interaction.

Digital services such as HejaHeja and Facebook are among the big names in the creation of social networks. Through online communities, people seek to share their experiences with friends, acquaintances or other people with the same interests. Feedback and encouragement from a social network or experts are a key factor in motivating people to use digital food services.

Appreciation of home cooking and spending time with friends and family is growing. There are food services which promote these by providing personalised meal planning, varied recipes and online home delivery. Finnish services that make everyday life easier include for example Miils, Hellapoliisi and Sannan ruokakassi. Time saved on food shopping can be used for, say, cooking together.

Digitalisation brings us around the same table

Digitalisation brings people together around food, both locally and globally.

Airbnb has revolutionised accommodation services. It is a good example of digitalisation enabling a new breed of service. Similar services are also emerging in the food industry. Last year, Helsingin Sanomat reported on a new startup called Eataway, through which ‘Restaurant Day meets Airbnb’. This is a platform which brings together cooking enthusiasts with tourists and locals in search of good home cooking.

In Finland, Yhteismaa ry, which started out with a communal Cleaning Day event, has come up with an open-air dinner concept. The idea is to tempt people to eat around the same tables. This year’s aspiration is to have people participate all over Finland and make the open-air dinner an annual event.

Customer a participant in the development of future food services

Consumers can directly converse with manufacturers and personalise products and services online. Correspondingly, food producers can use tailoring to create added value for customers. Digitalisation also enables consumers to find information on product origin, production methods and transport conditions.

Online retail and improving logistics solutions are revolutionising the centralised food trade. To benefit from this change and develop consumer-based food services, the food production sector must acquaint itself with new business models.

Kaisa Vehmas VTT

Kaisa Vehmas, Senior Scientist 

Maria Åkerman VTT

Maria Åkerman, Principal Scientist 

Is security achievable in a digitalised and networked platform society?

Mikko_Dufva

The digital transformation and platform economy are expected to herald an era of new growth and a break with existing industries. By platform economy, we mean a new, multi-directional way of creating value, in which producers and users of services are connected by social and technological structures and the distinction between them is blurred. Driven by the digital transformation, the rapid and extensive collection and analysis of information will enable networked activity within the platform economy.

Companies based on the logic of the platform economy have already gained market share from actors sticking with traditional practices. However, the impact of the platform economy is not restricted to new companies breaking into the market, but challenges the current economic logic in general. For example, the concept of the cooperative is enjoying a renaissance, while the sharing economy is creating a new kind of communality. All of this is giving the tax man grey hairs.

What do you mean, security?

Discussions of the platform economy have gradually shifted their focus from technology-orientation and the contemplation of new business models to social impacts. The debate has centred on the transformations in various industries and the workplace. Less attention, on the other hand, has been paid to security – now is the time to consider preparing for the changes being ushered in by the platform economy. Security is about more than information security and privacy issues; it also concerns other challenges and opportunities – related to trust, risks, the distribution of power and the management of complex wholes – that will accompany the new networked practices.

Networks and increasing mutual dependence have led to an entirely new approach to the concept of security. The risks are now much more complex and difficult to identify. In place of hierarchies, organisations are now network-based and temporary venues where traditional top-down control no longer works. This means that we are operating in a complex world of adaptive systems in which chaos theory would be a more appropriate starting point than process models. In this context, concepts such as power, control and trust gain new meanings and dimensions. What does power mean within an interdependent system? Can trust be outsourced to algorithms?

Rather than individual and single players, in the platform economy the focus is shifting towards communities and collaboration. The platform economy is a particular headache for legislators because its business models and the blurring of roles between customer and company do not fit into existing ‘pigeonholes’. Traditional supervision and regulation are difficult to apply when, for example, an accommodation service frames itself as merely a link between supply and demand – and owns no accommodation. Although regulations and restrictions will remain important for networked operations, the related culture will become an even more important source of security.

Will the platform economy take security to a new level?

On the other hand, security could be boosted by the platform economy, digital transformation and networking. Platforms connect people, while communities built on platforms take care of their members, particularly if the platform incentivises them to do so. The design of platforms and networks involves a social as well as technical and business challenges: how can we create platforms that promote security and build a sense of community? In a situation where all interactions leave a digital trace, will the resulting, reputation-based economy build trust or inequality? What role will companies, the state and individuals play in shaping platforms?

The digital transformation, platform economy and many other, corresponding terms refer to the transition from a production-based society to a collaborative one. Instead of focusing on which sector will be the next to be disrupted by a platform economy player, perhaps we should take a proactive attitude and talk about how to create the kind of future we all want. How can the digital transformation and platforms serve common goals and forge security? How can we ensure fairness, the minimisation of risks, and common ground rules?

These questions, among many others, are explored by the foresight, organisational dynamics and systemic change team at VTT in projects such as Platform Value Now.

Mikko Dufva, Research Scientist

mikko.dufva (a) vtt.fi

Twitter: @mdufva

Will sports technology replace the coach?

Alahuhta_Petteri

New digital products and services that analyse athletic performance are launched every week. They claim to help athletes improve their performance, encourage them to train, and give advice on when and for how long they should recover. These issues have traditionally been the coaches’ responsibility. Will digital sports technology make coaches a thing of the past?

From measuring the pulse to analysing athletic performance

Wearable products connected to wellbeing and sports have been actively developed in recent years. Heart rate monitors have moved from being specialist equipment for top athletes to being supermarket products available to ordinary people; at the same time, heart rate analysis is used to gather an increasingly large variety of information to help understand athletes’ training and recovery. Activity bracelets assessing people’s movement, sleep and energy consumption have rapidly developed into popular products for the general public, similarly to heart rate monitors.

At the moment, wearable sports technology is focused on products that can be used to measure the technique of a specific athletic performance and its flawlessness. In Finland, solutions are being developed for analysing the technique of running, swimming and cross-country skiing, for example. With such products, the performance analysis is based on data on the athlete collected using a small, wireless sensor. As for the business aspects, these are based on analysing the data and offering services based on the analysis.

Sports technology provides information to support coaching

The goal of sports technology is to provide information based on which the athlete and the coach can analyse the performance from a neutral point of view, without personal preconceptions. In world-class sports, the decisive moment of victory or defeat often lasts only a fraction of a second. Technology can be a great help when studying what happens in the high jump at the moment of take-off or in archery right before releasing the arrow, for example.

In addition to the trained eye, video cameras have been traditionally used to analyse performance, and measurements have also been made in test laboratories at training centres. These remain important tools, but they are starting to feel inadequate compared to the possibilities offered by wearable technology. Laboratory measurements can provide accurate data on a performance, but they nevertheless do not correspond to the performance at a competition. Video analysis of a performance that lasts for less than a second can likewise take several hours  to carry out.

Feedback immediately after the performance

With wearable technology, the performance can be analysed in the field instead of a measurement laboratory. We are approaching a situation in which the athlete’s total performance during training and competition is digitised through wearable technology. This gives the athletes detailed feedback about their performance immediately. The key performance indicators are an essential part of the feedback, but the performance can also be compared to previous performances during training or competitions, or they can be visualised for the athlete with the help of augmented reality.

Data-based coaching offers better tools for the coach and the athlete, who can focus on fine-tuning the performance. Director of Technology & Innovation for the U.S. Olympic Committee Mounir Zok agrees. At a sports technology seminar in early July he proposed that the use of technology in world-class sports is a key method in improving results: “Technology is the new secret sauce that will make or break any athlete, anywhere in the world.”

Smart networked products, the Internet of things, and real time data analytics revolutionise sports

The development of wearable sports technology is also promoted by the arrival of smart products on the wellbeing and sports market. It is based on the Internet of Things (IoT): the rapid development of sensor technology, wireless communication, data processing and digital services makes it possible to measure different kinds of events and phenomena with inexpensive, easy-to-use technology.

In the end, competitive sports share something fundamental with industry: improving competitiveness. If IoT looks like a solution for improving the competitiveness of the industry, the same logic can certainly work for competitive sports.

Will technology make coaching and coaches obsolete? No. Technology visualises what has happened during the performance. The new technology offers a more comprehensive picture than before, and it helps with understanding the performance and how it went. However, the athlete and the coach must decide together what to do next. Better information helps with making better decisions.

Petteri Alahuhta, Business Development Manager

Twitter: @PetteriA

The author has been a member of the Finnish national archery team and is currently acting as the Chair of the Finnish Archery Association.


Sports technology grows rapidly – Finland is at the top of the field

The goal of sports technology is to offer athletes and coaches better tools for improving performances. The investments in sports technology by capital investors have increased strongly in recent years. For example, during 2015 capital investors invested more than a billion US dollars in startup companies in the field. This shows faith in the demand for products and services in the field.

Finland has been a pioneer of sports technology for years. Established operators in the market such as Polar and Suunto have been developing their products for decades. In recent years, several startup companies have also started to develop their solutions for the sports technology market. Finland has high-level competence in data analytics, embedded devices, and software and service development.

As technology developers are combined with world-class sports research, Finnish companies will continue to create interesting wearable technology solutions for sports in future.

See also:

Wearable technology – VTT’s services

Presentations of the Sports Analytics Seminar in June 2016

Information about HILLA Sports Technology Growth Mill seminar

Theme digitalisation: How do business models change with digitalisation?

In their post to our Digitalisation blog series below, Jukka Hemilä and Anna Viljakainen consider how the business models of companies will change and what kind of competences the future business activities will require.

The previous parts of the series: Physical product or digital service?, How to navigate successfully through the digital transformation and Digital transformation calls for user-centricity and technological knowledge.

Jukka HemiläAnna Viljakainen

Digitalisation creates totally novel opportunities for business activities and even breaks traditional business ecosystems. Digitalisation is about a permanent change in the ways we act.

A classic example of the transformation brought on by digitalisation is the transfer from the film era to the digital era in photography. Camera manufacturers, film producers, and photo paper manufacturers – in other words, practically the whole value chain – were forced to renew their technologies, processes and operating methods. In order to secure the success of their business operations, they needed totally new kinds of competences. The operators had to adjust to digitalisation and seek a novel role in the value chain and clarify the idea of what will provide new value for customers and other stakeholders. It was an overall change in their business models, where technology appeared as the enabler of digitalisation.

In line with Tuomo Tuikka’s thoughts in the first part of our blog series, digitalisation is a driver in the transition towards a service business. The transition to services is taking place because they increase the competitiveness of companies and enhance their capability to survive the impacts of economic trends. The economic growth in Finland is increasingly reliant on services.

However, a service business differs quite fundamentally from the traditional production industry that we are used to. For that reason, company strategies, processes, sales practices and corporate cultures need to be developed further. We need to change the operating method by which we create services that produce added value. This means that companies must understand what digitalisation means in their business operations in particular. The higher the added value of the services we are providing, the bigger the role of technology in the production and validation of added value. As an example, we could mention the elevator company Kone, which is increasingly transferring from maintenance and development services to People Flow building management services, aimed at producing better experiences to users of buildings. A change like this requires a digitalisation strategy.

As IoT and the industrial internet are on everybody’s lips, broadly speaking, we are living in the midst of a transfer to a digital era. The Finnish Government Programme has set a goal to conduct a study on how Finland could turn digitalisation into growth. With it, the State has promised to create a growth environment for digital business operations, for example, by changing regulations and opening data sources. The role of companies in this transition is envisioned to be the development of new technologies and the innovation of business models, as seen in the Kone example mentioned above.

Time to renew business models?

Gary Hamel, one of the world’s most renowned business thinkers, has stated that competition no longer takes place between different products, but between different business models. Companies should systematically launch the development of their own digitalisation and the business model transformation it requires.

Tuomo Tuikka already pointed out that the creation of customer added value and greater competitiveness are key priorities of digitalisation from a business perspective. With a view to business renewal, we need to understand the new kind of customer value that digitalisation enables and creates.

Our CUSTOR research project has focused on the problems of customer value creation and strategic business development. Our guidebook Arvosta! uses examples to highlight our views on value creation and understanding it (Hemilä et al. 2016). Through digitalisation we can create new operative, financial and emotional value. In addition to enhancing production efficiency, digitalisation also enables new business opportunities and a total reform of business models.

Business model renewal begins with redefining customer value and analysing the opportunities offered by digitalisation. Recognising the opportunities offered by digitalisation is a major challenge, as we pointed out in our blog post entitled How to navigate successfully through the digital transformation.

Digitalisation is a major opportunity and strategic investment that often requires renewal of the business strategy. Strategy creates the direction and framework for digitalisation, following the realisation and understanding of future customer value and the opportunities offered by digitalisation. Business renewal must be managed by someone and its implementation requires different competences.

Courage to combine competences and technologies

The report “Suomi –Teollisen Internetin Piilaakso” listed a lack of vision and a common narrative, as well as the rigidity of the labour market and work communities as Finland’s weaknesses (Ailisto et al. 2015). Development and application of digitalisation requires innovation activity that combines novel competences and new ways of managing organisations.

Internationally, major corporations invest in organisational diversity, or in combining different competences (e.g. Intel, Microsoft). In successful business operations, one must invest in one’s organisation’s diversity and versatile competences and communication skills (Hemilä et al. 2016). In other words, success does not necessarily require development of a new technology, but incorporating technologies and competences into business operations in new ways.

Companies must now seize the challenges and opportunities of digitalisation and create a business model based on digitalisation. We will be able to find the business concept for future success by combining competences and technologies in new and bold ways. We at VTT are pleased to assist you with the renewal of your business operations.

Jukka Hemilä, Senior Scientist

Anna Viljakainen, Research Scientist

References:

Ailisto, Heikki (ed.); Mäntylä, Martti (ed.); Seppälä, Timo (ed.); Collin, Jari; Halén, Marco; Juhanko, Jari; Jurvansuu, Marko; Koivisto, Raija; Kortelainen, Helena; Simons, Magnus; Tuominen, Anu; Uusitalo, Teuvo 2015. Suomi – Teollisen internetin piilaakso. (In Finnish: “Finland – the Silicon Valley of the industrial Internet”.) Government’s analysis, assessment and research activities series of publications 4/2015. Government’s analysis, assessment and research activities. 32 + 4 p. ISBN 978-952-287-174-9.

Hemilä, Jukka; Kallionpää, Erika; Lanne, Marinka; Murtonen, Mervi; Rantala, Jarkko; Ala-Maakala, Mariikka. 2016. Arvosta! – Kuinka asiakasarvoa vaalitaan? (In Finnish: “Respect! How to foster customer value?”) VTT & Tampere University of Technology (TUT). 55 p.

Theme digitalisation: Digital transformation calls for user-centricity and technological knowledge

“Theme digitalisation” blog series offers now Olli Kuusisto’s and Anu Seisto’s views on user-centricity. Read also the previous digitalisation posts: Physical product or digital service? and How to navigate successfully through the digital transformation.

Internet of Things (IoT) and changes brought by digitalisation are increasingly becoming a part of our lives at work and at home. Gartner has predicted that more than 20 billion objects and entities will be connected to the Internet by 2020. A digital barometer published every year in Finland compares the abilities to benefit from digitalisation in various countries, where Finland ranked second just after Denmark in 2015. Norway and Sweden were also in the top five. What exactly does digital transformation mean in our daily lives?

Both consumers and employees are affected

Digital transformation refers to the use of digital technologies in all activities. For ordinary consumers, digital transformation is manifested in increasing number of everyday contexts. Domestic appliances can be connected to the Internet, and they can provide information for many uses. An often-cited example of consumer application is a refrigerator that can tell its owner about its’ contents or what is lacking. Sensors connected to the Internet can also show what is happening at home or at a summer cottage, and in the smartest services, sensors can adapt themselves based on our behaviour by using learning algorithms. Basically, intelligence can be added to any object or entity, which can then be connected to IoT network.

For employees, digital transformation can mean the adoption of new technologies in various ways. For example, augmented reality applications help maintenance persons to identify and repair faults faster, automatic integration of data reduces the amount of manual work performed by accountants, and digital identifiers make it easier to locate goods and keep warehouse accounts up-to-date at all times.

Whether we are talking about consumers or employees, the development of IoT products and services calls for understanding of user needs, technological opportunities and risks. A fancy technological solution without understanding of – sometimes hidden – user needs is not enough. Paying attention to the risks regarding e.g. data security is also essential. A development process that genuinely takes users and other stakeholders into account leads to better results.

Iterative co-creation process enables fast feedback loop

The best results are achieved when users and other possible stakeholders are engaged during the entire development work or a certain phase. In addition to providing ideas they can participate in developing and giving feedback on concepts, demonstrations, prototypes and service models. In this way, unfeasible ideas can be identified at an early stage. Depending on the case, rapid experiments may enable the creation of customised functional IoT prototypes in only few weeks. In addition to a sensor solution, a prototype can include mechanical modelling, wireless communication, mobile application and cloud-based services. Co-creative prototyping enables accurate feedback from users and customers faster compared to conventional interviews or needs assessments.

Besides user-centricity, there is a need for a wide range of technological knowledge starting from sensors all the way to the storage, processing and visualisation of the data in cloud services. Concept design and rapid experimenting offers businesses an efficient way to benefit from user and customer perspective and consider the effects of digitalization to their products and services. (Watch the video on co-creative prototyping process, with a smart rollator as case study).

Even though digitalisation is often perceived as a threat, it provides many new opportunities for doing things better or offering entirely new solutions to customers and end-users. By involving users and other stakeholders in the development process and carrying out quick experiments, companies can stay in the front line and create and develop customer-centric digital services.

Olli Kuusisto, Senior Scientist

Anu Seisto, Research Team Leader

A smart rollator concept and prototype developed through co-creative prototyping.

pic1pic2pic3pic4

Theme digitalisation: How to navigate successfully through the digital transformation

Jukka Kääriäinen, Päivi Parviainen and Susanna Teppola continue our blog series “Theme digitalisation”, launched by Tuomo Tuikka.

People associate many threats with digitalisation, but they have expectations as well. One of the first fears is that digitalisation will take away their jobs and radically change the way companies do business. For example, the trends related to digitalisation that are already visible – the sharing economy and automation of knowledge work, such as automated decision-making through data analysis – change also the content of work and work duties, and, consequently, the labour market as well. Digitalisation also brings a lot of new opportunities for companies, the public sector and citizens alike, but they will not become achievable without a proactive change in how companies, organisations and individuals operate.

Digitalisation means a change in the modes of operation, where digital solutions are utilised comprehensively in the operations of individuals, organisations and society. The impacts of digitalisation on organisations on the one hand and on their goals on the other can be related to internal efficiency, external opportunities or disruptive change.

Internal efficiency means better internal ways of operation using digital methods (e.g. reduction of routine manual labour, real-time monitoring of operations, and reaction to/anticipation of change). External opportunities, on the other hand, mean new business opportunities in the present business area (new services, new customers). Disruptive change then refers to the disappearance of the current area of operation and emergence of new possibilities, new roles in the value chain.

In his blog text, Tuomo Tuikka introduced the digitalisation theme and wrote that there are challenges when considering the issue of digitalisation against business activity, but these can be alleviated by means of determined planning and consideration of alternatives. This requires a systematic approach, in other words, consideration of how to manage and alleviate the change caused to an organisation by digitalisation.

Unidentified opportunities of digitalisation 

The Internet of Things (IoT) is one of the phenomena enabled by digitalisation. At the turn of the year, we asked Finnish businesses and the public sector for their views on the situation of IoT and related challenges. Big companies in particular said that the challenge lies in the lack of an IoT strategy, whereas small companies highlighted their lack of understanding of what benefits the IoT could bring, and their uncertainty of how to proceed with developing the use of IoT in the company. Accordingly, one of the biggest challenges companies identified is adopting a novel way of thinking and, through that, new business opportunities in own operations. Such general uncertainty would seem to be associated with the change caused by digitalisation even on a wider scale.

In other words, companies have recognised digitalisation as an opportunity in Finland, but they do not necessarily know how it will affect their particular operations, or what opportunities digitalisation might afford them. In practice, it is easier for companies to make multi-million euro decisions on the purchase of new production equipment than to start considering own business operations from a new perspective. At the same time as companies should consider whether they could offer their customers or other network stakeholders totally new services, they must also evaluate the willingness, maturity and readiness of potential partners to exploit the opportunities afforded by smart solutions.

Get ready for the change required by digitalisation

People everywhere are fervently considering the transfer to digitalisation and the relevant threats and opportunities, but how can all this be implemented in practice? Nobody likes surprises – particularly if they are negative. VTT has been developing a model by which threats and opportunities related to digitalisation can be assessed in a systematic manner, and digitalisation methodically introduced to the company’s operations and products phase by phase. This model will make the company more aware of the development of digitalisation within its own sector and better prepared for the change required by digitalisation in its own business operations.

In the first phase of the model, the company analyses the potential impacts of digitalisation on the company and conjures up a picture of what the company aims at through the change. In the second phase, the company analyses its current situation in comparison with the goals. This is a natural part of the improvement activity, as we need to know where we are at to know how big a “digital leap” is required. In the third phase, the company defines the improvement steps in practice and draws up a plan on how it will take the digital leap. In the fourth phase, the digitalisation solution is implemented and validated. The model is iterative, so that the goals, plans and the solution for the company’s digital leap can be formed gradually and fine-tuned, if necessary.

For a company, digitalisation can be a threat or an opportunity but, by taking systematic steps, the company can successfully navigate through this change.

Jukka Kääriäinen, Senior Scientist

Jukka Kääriäinen

Päivi Parviainen, Principal Scientist, Research Manager

Paivi Parviainen

Susanna Teppola, Research Scientist

Susanna Teppola

Reference:

Parviainen, P., Teppola, S. & Kääriäinen, J., Tackling the Digitalisation Challenge: How to Benefit from Digitalisation in Industrial Practice, under work, to be submitted to open access journal in spring 2016.