Customers and services should be the focus when developing digi-solutions

Manufacturing industry has become widely interested in developing digitalisation. Companies are interested in gathering data from existing devices and using it to develop new products and services. They want to get new ideas to the finish line quickly, while growth and internationalisation are on offer. But while technical solutions are being developed at a frantic pace, services are lagging behind. Companies remain unsure of how to create added value for the customer and what the customer is willing to pay for.


In industry, digitalisation is being exploited by connecting machines or devices to the internet and analysing, and combining the data obtained from them for business purposes. However, the customer only actually benefits from various value-added services. Technology-driven development of digitalisation can seldom respond directly to the customer’s needs. On the other hand, the service business perspective shifts the focus to the holistic development of digitalisation, by combining the service provider’s and customer’s perspectives with technological potential.

Developing digitalization solutions from this perspective ensures that added value is generated which the customer is willing to pay for. It is also ensured that the business, strategic objectives and services of the company supporting the services being developed can be implemented profitably in terms of its service processes and business.

When developing digitalisation solutions, consideration must first be given to business objectives and how the solutions fit with the company’s strategy. Specification of a business model aimed at target groups can begin after this, not forgetting the value promise and earnings logic. The technological solutions and information processes required for the services are also defined when designing and outlining the service processes. Quick experiments are conducted at the customer interface during development work; this provides a realistic picture of the viability of the business model, earnings logic and technological solutions under development.

See you at the Subcontracting Trade Fair in Tampere from 26 to 28 September 2017

VTT Technical Research Centre of Finland has served as an expert and service provider in numerous projects to develop the digitalisation of Finnish companies. Elisa has created production solutions for similar companies, together with players from its IoT ecosystem. These two major players have now begun collaborating to help Finnish industry utilise digitalisation more effectively. Come and discuss the opportunities being created by digitalization with our experts at the Subcontracting Trade Fair on 26 to 28 September 2017, at VTT’s stand (E210) and Elisa’s stand (C422).

Jyrki Poikkimäki                                                           Jukka Nurmi

Manager, SME Sales                                                   Director, IoT

VTT Technical Research Centre of Finland Ltd           Elisa Corporation 

Twitter: @JPoikkimaki                                                  Twitter: @jukkanurmi

Can a container be more than a container?

In our previous post, we talked briefly about how the concept of user experience (UX) can help build brand loyalty and create products and services that not only fulfil their functional requirements, but also feel good to use. As a thought experiment, let’s consider some more futuristic scenarios. In our current world, a shipping container is just a container. What if we could turn it into something that would create an experience – and this experience could generate revenue for various players in the logistics chain?

UX future

We are used to thinking of containers as simple boxes that provide no additional value beyond physically conveying things from A to B. Moreover, beyond the generic markings of each shipping company, containers all look alike, irrespective of what goods are being transported. But what if this idea was turned on its head?

What if, in the future, premium sports cars would be transported in beautifully designed transparent containers that announced to everyone that this shipment was really something special? Would this provide a superior experience compared to hiding the car in a traditional container? Would manufacturers see this visibility and experience as supporting their brand image and be willing to pay for it? Consumer electronics companies such as Apple have long understood the value of beautiful packaging as part of the total user experience. Could this be applicable for container logistics as well?

Or, for another scenario, what if shipping containers incorporated display technology – e.g. digital paint – that would enable their colour and/or surface images to be changed? This would turn a nondescript steel box into a smart surface that could advertise the products being transported. Going a step further, what if these smart displays could be linked together, turning the ubiquitous container stacks at terminals into massive, dynamic display matrices, alive with colour and information?

If containers became a form of prime real estate for advertising, subject to the same competitive supply and demand mechanisms as web advertising, it might turn out that the real profit in container logistics was not in the actual shipping of the container at all. If a single container-turned-advertising-billboard on a highway truck sounds radical, imagine a visual surface hundreds of containers wide and dozens high. Now, that would be a wow.

In addition to the obvious commercial applications, this would open up fascinating possibilities for urban design. A technology such as this could increase the transparency of port operations, giving residents and other stakeholders a clear and concrete real-time view of what the port is doing and what kind of value it generates for its community. If a container port were able to generate a visual and conceptual “wow” effect of its own, people might be happy and proud to live next to one.

UX goes far beyond the traditional concepts of usability and ergonomics. It’s not just about designing a crane cabin that is more comfortable to use, but about finding new ways of doing things better. Digitalisation increases the chances of finding these radical innovations since they are more and more about ideas, systems and connections, rather than features of specific physical equipment. What about a world full of autonomous container terminals that were operated by consumers over the Internet in the fashion of a gaming platform? This would create an experience of dancing robots operated by crowd-sourced operators and Artificial Intelligence (AI). Whether this could be a reality is not contingent on hardware capability. It is a question of imagination, digital connectivity and a totally new way of organising an existing industry.

Granted, the ideas outlined above are still somewhat far-fetched, but the general principle holds: It is only a matter of time before someone comes up with a combination of new technology and disruptive business model that will recast our conventional wisdom of how value and revenue are generated in the container logistics chain. And when this happens, it is more than likely that a superior user experience – a “wow” effect of some kind – will be at the core of it.

Author and futurist Arthur C. Clarke famously wrote, “Any sufficiently advanced technology is indistinguishable from magic.” In consumer products, this sense of wonder is something we have all experienced from now and then, and product manufacturers dream of creating that one groundbreaking device or application that transforms our entire expectation of how we experience our familiar technology. Would it be possible to bring some of that magic into the world of industrial logistics as well? After all, we aren’t creating services and solutions for machines. We aren’t creating them for the industry or the market. We are creating them for people.

This post has been published also at Kalmar’s blog.

Jari Hämäläinen Kalmar

Jari Hämäläinen (Dr Tech.), Director, Terminal Automation, Kalmar, sees interesting opportunities in the digital convergence of ICT, industrial engineering and services. He has led offering development in Kalmar and service concept development in Cargotec. He has a background in the telecommunications and software industries, with over 300 patents in 40 global patent families helping smartphone users in their daily business and pleasure. His passion is to lead renewal through technology and business innovation.

Maaria Nuutinen VTT

Maaria Nuutinen was programme manager of the FIMECC UXUS programme (2010–2015). Her passion is to understand and help human and organisational activity in the context of technology enabled business. She is particularly interested in developing ways for enhancing mind set change and value co-creation based on user and customer experience. Her research interests include organisational culture, change management and service innovations. She is a Vice President in Business, Innovation and Foresight at VTT Technical Research Centre of Finland Ltd. Maaria Nuutinen received her PhD in psychology from the University of Helsinki in 2006.

Twitter: @MaariaNuutinen

Getting lost among hype and buzzwords or finding future success in outcome economy?

Fast browsing through blogs and short articles on the outcome economy could provide terms and sentences that already sound very familiar – some of them you believe and perhaps some of you have already turned down. What’s new then? It depends. It is related to where you are now and where you have been – and more importantly where you would like to be.

What could we do better to realize the potential – and support competitiveness and the competitive advantage of the company and its ecosystem? There are – of course – multiple ways to do that. In this blog, I’ll take a mindset perspective – which to my mind means the way an organization continuously learns to take care of its core task in the changing activity environment and records it into its cultural heritage.

Keep on pursuing something new and if you find it, do not lose it!

Any hype or buzzword is not a bubble or success in the first place, but they all do carry renewal and innovation potential and thus new paths to create value for and with your customer. Adopting a cynical attitude towards yet another buzzword might sometimes be tempting. But do not let it prevent you from discovering something that is new for you or helps you to rediscover an old beloved idea (this might sometimes feel like meeting a good old friend), the timing of which just wasn’t right in the past, and strengthen it. (By the way, this applies both to business and to research).

Then again, if the hype or buzzwords just remain buzz, even though inspiring for a while, their real impact might even turn negative by preventing any forthcoming efforts to enliven people and get them interested. So you get impact, sure, but the direction is the opposite to that intended. The strengthened mindset might be like: “let’s play along but do not change anything important, they’ll turn around, right?”. Turning the hype and buzzwords into real guidance for strategic choices on business and actions, such as where to invest, what development and research programs to launch etc., in a particular firm in a particular situation with particular heritage, is not an easy task.

Drafting the idea of transformation in terms of business perceptions, R&D and management practices, technologies and customer relationships etc., as mirrors of the present and targeted culture provides the basis for discussions on the present and the preferred future. There might turn out to be a need for a proper critical evaluation of the present state of the business and development practices to start with. “Stealing” ideas and technologies from outside your industry and experimenting with those could be a good awakening. Stretching the idea of the “end-customer or end-user” of the whole system as far as possible and thinking of the preferred outcome in terms of experience offers a good framework for turning old thinking inside out. (See examples or a recent blog). Scanning potential business models together with your present rivals could take you even further into unexplored territory.

What could a new hype term or buzzword offer – what should you look for when starting the process?

  1. Open your eyes wide: Rethink your business – threats and opportunities. There is always room to do things differently.
  2. Scanning new technologies as enablers for renewing your business – particularly, you could seek ways to provide extraordinary experiences to end-users and customers or to demonstrate the outcomes to pursue in order to boost the construction of the business ecosystem.
  3. Redefine your identity and rethink your partners through new eyes. If you’d like to proceed, then it would be a good idea to share this openly and thus awake the interest of the others to join in.

Looking back: Finding your path for the treasure?

To demonstrate possible paths guided by the new buzzwords, I just picked up examples of related to user experience to illustrate possible lessons learned.

User experience (UX)

  • End-users and their experiences are also really important in B2B although the users are not normally the same people who make decisions on buying.
  • Experience driven development provides multiple ways to enhance your competitiveness.
  • Value is multidimensional, it includes subjective, personal and emotional aspects.

The typical progress could include UX strengthening the role of industrial design within the company and UX being first used for getting customer interest, sometimes with rather superficial solutions. One conclusion to be drawn is that becoming a market leader or staying in that position requires more than good products with more functions than your rivals, reasonable usability or more power, and better energy efficiency etc. This leads to discovering that focusing on end-user experiences opens up endless sources for innovations and differentiation. This is a good track to develop new collaborative and open methods to co-innovate with users and customers for future solutions. This way it could challenge the mindset to accept that there are still many people related issues (H2H) to work with, however practically unmeasurable (with reasonable costs), they are relevant in business and could be systemically developed for.

For an outcome economy, this provides good grounding to proceed and discover your way.  There is still huge treasure to be found for Finland’s export industry in robotization, automation and digitalization if looked at with new eyes – together!

If you are interested in considering this more, you can directly contact or meet us at Manufacturing Performance Days 2017, join or follow our seminar Creating the Future Success, Creating the Future Success” Tuesday 30th of May, at 8:30-12:00 and its results.

Maaria Nuutinen VTT

Maaria Nuutinen
Vice President, Business, innovation and foresight
Twitter: @MaariaNuutinen

Are you ready for the shift from B2B to B4B?

B2B is over! The manufacturing industry is shifting to B4B, where suppliers no longer focus on selling things to customers but rather on creating outcomes and value for their businesses. In B4B models, customers pay much less up front for a product or service, sometimes nothing at all. Instead, the supplier gets paid when customers use their products and often only according to the benefits they receive.

So where does the value come from and how can businesses reinvent themselves to stay in the game? For suppliers value will come from knowing what outcomes customers really want, creating solutions to meet those needs and making their value-add visible. It’s also about finding win-win outcomes balancing both supplier and customer needs, which we are seeing more of in new partnership-based businesses.

Digitalisation must go deep into the DNA

These B4B models require transparency, which digital technologies enable. Digitalisation is also a big part of the solution where products can behave more like digital platforms that bundle data to enable outcomes to fit customer needs. So once you’ve sold a product it can become a launching pad for new future products and services for your customer.

Digitalisation is critical, but on its own it’s not enough. If it’s used like a sticking plaster, only quick fixes can be achieved whereas B4B models require real and sustainable value add. Real change needs to go deep into the DNA of a business, reflecting the most critical customer needs in a real operating environment.

B4B much more than just nice apps and XaaS offerings

We all know the story of Air BnB and the two guys with one extra room who couldn’t make rent. They launched a web site and disrupted the entire global travel and hotel business. Doing the same in big industry is much more complicated. Most of us understand how the hotel business works. You take a room, have your stay, and pay the money, and then you leave. But how many know how to run an electricity grid? If you really want to change the DNA of a smart grid, something critical for society, you need to know about much more than just digital technology, you need to know all the technical ins and outs of the business, how it’s run, where the valued add or beef of the business is, and all of the many technical restrictions that come with it.

In B4B we’re better together

As no single entity can overcome these complex challenges alone, effective networking is a core success factor in B4B. Just as you a consumer might consult a social media network to share or learn more from crowd knowledge, at industry level, companies big and small are also jumping into sharing partnerships to develop their competitive advantage. Partnerships can be with researchers, ICT providers, sometimes customers, and even with competitors, in the growing spirit of coopetition.

Take an example of Company A: a small business with a big idea. They’re in the healthcare industry where the fail-fast approach is not a viable option. In order to test and prove their idea they need a cutting edge 3D printer but the cost of purchasing one upfront would be a prohibitive especially with no guarantees that the idea will actually fly. In this case, an effective innovation path can be found through sharing partnerships with shared infrastructure and expertise networks.

VTT testing and piloting platform can help

VTT, together with Tampere University of Technology, has developed an open ecosystem platform that will help Company A take their idea and run with it. The platform, called SMACC (Smart Machines and Manufacturing Competence Centre) brings instant access to a 3D printer to test their idea. If glitches arise, help for small or large questions will come from a joint knowledge network. Finally, when the time is right, Company A will have its own collaboration team to help pilot the new solution cost effectively and at speed.

Using the power of partnership platforms, VTT is well-positioned to play a central role in helping business make the shift toward outcome-driven B4B products and services. We want to work like genetic engineers, drawing on our extensive knowledge networks and research, and applying rapid solutions not just to quick fix your business but to transform it over time.

The shift to B4B will be one of the big topics of the Manufacturing Performance Days in Tampere at the end of May. I look forward to taking it up with you there!

Kalle Kantola VTT

Kalle Kantola
Vice President, Research
Smart industry and energy systems

Kohti tulostaloutta ja Suomen teollisuuden uudistumista

Koko Suomi kärsii, jos teollisuutemme ei toimi tehokkaasti. Teollisuus on edelleen pääsiallinen kasvun ja hyvinvoinnin tuottaja ja Suomen talouden selkäranka. Tarvitsemme myös vahvaa vientiteollisuutta, sillä kaupankäynti pelkästään maan rajojen sisällä ei riitä pitämään kansantaloutta käynnissä.

Mistä kasvua tulevaisuudessa?

Valmistavalla teollisuudella on edelleen tärkeä rooli Suomessa, mutta sen suorituskyky edellyttää älykkäiden ratkaisujen hyödyntämistä. Tulevaisuudessa tuotto ei tule niinkään tuotteiden ja palveluiden myynnistä, vaan siitä, miten asiakkaat hyödyntävät niitä oman liiketoimintansa tukena. Tulevaisuuden tuotteet muistuttavat digitaalisia alustoja, jotka kokoavat asiakkaan saamiin hyötyihin ja tuloksiin liittyvää dataa. Taloudesta, jossa asiakkaiden saavuttamat tulokset ohjaavat toimintaa, käytetään nimitystä tulostalous (outcome economy).

Tulostaloudessa menestyminen edellyttää, että tuotteet ja niitä valmistavat laitteet ovat entistä älykkäämpiä. Älykkyyden lisäämisessä keskeistä on yhteistyö ja jakaminen.

Testausta ilman suuria investointeja

Tarvitaan uusia alustoja, jotka auttavat pieniä ja keskisuuria yrityksiä ja uusia tulokkaita löytämään kasvumahdollisuuksia ja testaamaan ja pilotoimaan uusia tuotteita nopeasti ilman suuria etukäteisinvestointeja. Voisiko jaettu infrastruktuuri olla esimerkki jakamistalouden hyödyntämisestä teollisuudessa? Myös suurempien ja vakiintuneiden yritysten on etsittävä eri aloilla toimivia kumppaneita uusista verkostoituneista ekosysteemeistä, jotka hyödyntävät big dataa ja analytiikkaa uusien toimintatapoja testaamisessa ja arvon jakamisessa.

Uudenlaisissa verkostoissa voi olla toimijoina niin asiakkaita, kumppaneita, toimittajia, palveluntarjoajia, startup-yrityksiä kuin kilpailijoitakin. Kilpailijat yhdistävät kilpailun ja yhteistyön (co-opetition), kun ne pyrkivät tuottamaan asiakkaille enemmän arvoa. Haasteena on se, että kaikkien ekosysteemin toimijoiden täytyy kyetä tarjoamaan lisäarvoa, joka sopii yhteen muiden toiminnan kanssa.

Valmistavan teollisuuden helpdesk

Yksityishenkilöt, jotka haluavat jakaa tietoa tai oppia muilta, voivat liittyä erilaisiin verkostoihin tai some-palveluihin. Yritykset voivat vastaavasti liittyä oman alansa kumppaniverkostoihin.

VTT on luonut yhdessä Tampereen teknillisen yliopiston kanssa osaamiskeskittymän nimeltä SMACC (Smart Machines and Manufacturing Competence Centre). Se on avoin osaamiskeskittymä, joka auttaa yrityksiä löytämään uusia yhteistyömalleja ja edistää innovointia ja kilpailukykyä.

Suomi voi nousta edelläkävijäksi

Tällainen yhteistyö ei tietenkään ole Suomessa mikään uusi asia. Nokian inspiroima ICT-klusteri on jo menestyksekkäästi hämärtänyt rajoja perinteisen teollisuuden ja digitaalisten startup-yritysten välillä. Molempien elinehto on, että ne jakavat tietoa ja osaamista keskenään. Meillä on monialaista huippuosaamista ja erittäin vientikelpoinen ICT-sektori. Kun yhtälöön lisätään Suomen laajat osaamisverkostot ja huippututkimus, meillä on erinomaiset edellytykset paitsi uudistaa oma taloutemme myös käynnistää maailmanlaajuinen muutos.

Nyt on aika toimia!

Tulostalous on vahvasti esillä Tampereella 29.–31. toukokuuta 2017 järjestettävässä Manufacturing Performance Days -tapahtumassa, johon myös VTT osallistuu. Tapahtuman keskeinen kysymys on, miten tulostalous voi vauhdittaa Suomen valmistavan teollisuuden muutosta ja etenkin pienten ja keskisuurten yritysten toiminnan uudistamista. Jos olet yrittäjä, mieti, mistä asiakasarvo muodostuu. Miten tulostalous tulee vaikuttamaan yrityksesi toimintaan? Onko yrityksesi valmis muuttumaan?

Erja Turunen VTT

Erja Turunen
Liiketoiminta-alueen johtaja, älykäs teollisuus ja energiajärjestelmät

Tervetuloa Manufacturing Performance Days 2017 -tapahtumaan tapaamaan meitä! Lue lisää ja rekisteröidy.

Manufacturing Performance Days 2017

VTT ja Tampereen teknillinen yliopisto järjestävät tiistaina 30.5.2017 klo 9–12 Creating the Future Success -seminaarin.

Erja Turunen esitelmöi keskiviikkona 31.5.2017 klo 10 aiheesta Customers of the future. Tervetuloa kuuntelemaan, kuinka asiakas vaikuttuu!

Seuraa Twitterissä: @mpdays

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)