The benefits of digitalisation cannot be converted into cash flow, unless service development takes the ideas of customers and employees into account.
Companies can only get the most out of digital services once they have changed their everyday activities to support new operations.
The Industrial Internet is currently talked about through technology, even though technology alone cannot bring the desired benefits to companies. Significant benefits can only be achieved once companies have transformed their everyday activities ready for the world of digital services. Five key rules of thumb are listed below.
1. Guided by strategy, supported by technology
During changes, technology may take the lead from strategy so that development does not move forward on the strategic path. No matter how busy they are, companies should stop and think about how technology best serves the strategy and business.
At the same time, they should think whether technology can sometimes by such a strong factor that strategy needs revising, as well.
“This may be the case if the strategy does not enable the utilisation of the opportunities presented by the digital age. Mainly, companies can get far by harnessing technology to serve their existing strategy,” says Marko Yli-Pietilä, business development director at consulting company Midagon.
After all, the strategy rather than technology sets limits for development.
2. Set clear goals for development
The IoT goals of companies can be roughly divided into three levels: At the first level, services are boosted, for example, so that customers can get quicker, or even preventive, maintenance. The next step is to change the business idea so that a company starts to sell a machine it has manufactured as a service. The most ambitious goal is to carry out a change to revolutionise the way everything is done in the industry.
“It is important to see what the goal is, even though it often changes along the way. If the goal is not ambitious enough, there may not be enough motivation to reach it,” says Tapio Haantie, development manager in charge of DNA's IoT range.
3. Be prepared for a long journey
The bigger the change is, the more companies need to change their operating methods, and the more they require new expertise.
For example, Siemens sells trains to railway companies as a service, for which it is paid according to the quality of its operations. Technology is making this more and more possible because, using remote connections and sensor technology, device suppliers are able to anticipate problems and fix them as quickly as possible.
“Such a development may require years to take place. Companies cannot change their operations on such a total scale in a blink of an eye. Instead, the change should be started by a suitably sized pilot,” Yli-Pietilä says.
4. Change your processes and evaluate your expertise
When a manufacturing company starts to change its operating model, it also needs to reshape its processes. Services are sold and bought differently from devices. For example, the company needs new agreement templates, incentives and even new talent.
It needs to understand its customers' business operations more comprehensively or its services will not satisfy their needs.
The company should also assess whether there is enough expertise in its current partnership network.
What is particularly important is to develop expertise in analytics because inventions are developed by analysing data.
“Understanding of analytics should also be developed within companies; after all, analytics forms the core of business,” Haantie says.
5. Develop together
Customers should be engaged in the development of digital services at as early a stage as possible. The development path has its twists and turns, and it rarely starts in the right direction. Customer feedback is the best tool to point the way.
What is more, employees should be engaged early. Digitisation changes job descriptions, which may result in clashes. That is why, shop stewards should take part in development work.
“Employees also offer important practical insight which, if ignored, may result in a situation where new solutions are used incorrectly,” Yli-Pietilä says.
Tapio Haantie also places emphasis on this.
“The personnel form the first target group to whom developers need to be able to sell the change.”