“The biggest risk of all is to do nothing”The Industrial Internet is forcing Finnish companies to change their thinking in a radical way, states the new report on the IoT (Internet of Things) and Industrial Internet from the digital business consulting company Solita. Finnish companies should not shun the changes and innovations brought by the IoT. They should start conducting IoT experiments immediately, urges Solita’s Think Tank group of industry experts.
According to the report, there are no alternatives to jumping on the bandwagon, since the IoT is about to fundamentally change the everyday lives of both individuals and businesses over the coming years. The IoT (Internet of Things) generally refers to products, devices and services that are connected to the internet, at which point they start producing vast amounts of data about their environments. Companies in the industrial sector refer to the corresponding change as the Industrial Internet.
A company’s success is, to a large extent, determined by its ability to understand the value and potential of the data it possesses and its ability to use that data to its advantage.
The report by Solita’s Think Tank was released at the Internet of Things 2016 event held on 19 April. In the autumn of 2015, Solita put together this Think Tank group and tasked it with clarifying the state of the Industrial Internet and the possibilities of taking advantage of it in Finland. This Think Tank was made up of Kati Hagros, then Senior Vice President of Development, Digitalisation Strategy and Service Business at Kone Corporation, Pirkka Penttinen, CIO of Metso, Anders Stenbäck, Digital Director of If, Juha Pankakoski, Chief Digital Officer and CIO of Konecranes, Timo Seppälä, a postdoctoral researcher at Aalto University, Vesa Pirinen, SVP (IT) and CIO of YIT and Solita’s directors Mikko Aro and Ossi Lindroos.
The IoT is wrecking current business models and requires clear changes to leadership
The Finnish corporate world has been talking industriously about data and the Industrial Internet over the past few years. But according to Solita’s Think Tank, they are still mostly in the initial stages when it comes to its practical implementation.
Finnish companies are too cautious in their activities. Old hardware and an aversion to risk, as well as a lack of standards, visionary approaches and change leaders, is holding Finnish companies back in moving beyond the initial steps.
The Industrial Internet and IoT also require an entirely new kind of leadership. Corporate managers must be able to make quick decisions, change course while moving and learn from experiments – quickly. At the same time, they must understand and be aware of the risks, and think in a new way. Corporate leaders also need to have an increasingly good understanding of their customers’ needs.
Think Tank was unanimous in its opinion that the Industrial Internet provides Finnish companies with great opportunities to increase their competitiveness. Finland has good infrastructure, education and ICT skills. We also have a strong basic industry that can apply the Industrial Internet.
“Many companies have, for the most part, come to terms with the fact that the IoT will bring about changes. Still, they may not fully understand or be capable of internalising how this will affect management, budgets, funding and so on. The topic is familiar, but comprehension is still lacking with regard to the fact that the IoT will require experimentation, flexibility and tolerance of failure. While few are likely to deny that change is important, many are unwilling to change in practice,” says Solita’s Ossi Lindroos.
Eight steps for Finnish companies to win in the IoT
The group behind the report came up with eight key aspects on the IoT that companies today should be aware of.
1. Everyone will serve. All companies, traditional industrial companies included, will become service providers. In the future, customers will no longer want products, but solutions and services.
2. The customer interface is king. Digital business means competing for control of the customer interface. The IoT will allow new, agile operators to take customer interfaces over from ill-prepared, traditional companies.
3. Refresh your thinking. The IoT is not a technology project – it is a tool for renovating your business.
4. Utilise analytics and algorithms. Data and intelligent algorithms will become essential in all business models.
5. Get experience. There is no alternative to agile operation. The modern world is not a place where you should design your products up to the last detail. Rather than aimlessness, agility means that companies will run a lot of experiments and let customer feedback guide their development work.
6. Play the ecosystem game in cooperation. Many companies aspire to create their own ecosystem. Cooperation with other companies may be a good idea. Not all companies can be the centrepiece of an ecosystem. Companies should consider existing ecosystems to see if they could benefit from them.
7. Optimise risks. The digital world is full of risks, and companies pay the most attention to information security risks. Since you cannot fully eliminate all risks, they must be optimised.
8. Do not wait – waiting will backfire. Many companies are standing by, waiting for standards to be carved in stone. A company that gets moving only after all of the standards are in place will be hopelessly late.
The report encourages Finnish companies to take their first steps in IoT experiments today.
The biggest risk of all is to do nothing
Download free Solita Think Tank report Industrial Internet and IoT
The company’s report on the Industrial Internet is its fifth Think Tank report focusing on the various aspects of digitalisation. The previous reports discussed the impact of digitalisation on business and management, the digitalisation of the public sector, the future of commerce and the digitalisation of traffic. In all of its reports, Solita’s Think Tank has included well-known industry experts, leaders and influencers. With its Think Tank reports, the company aims to refresh Finnish discussion on topics currently being discussed in the business world.
Ossi Lindroos, Vice President, Solita
tel. +358 40 7507 637, [email protected]
Mikko Aro, Head of Industrial Internet Business, Solita
tel. +358 40 8443 400, [email protected]
Solita is a digital business consulting company. We are our customers’ travel guide in a changing world. We create new business and services for the private and public sectors by combining technology, business processes and content in a new way. Solita produces digital solutions and online services for digital business and services as well as business intelligence. Established in 1996, Solita is a growth company that has grown profitably at an annual rate of more than 20%. The company’s net sales in 2015 were EUR 49.7 million. It employs almost 500 digital business specialists in Helsinki, Tampere and Oulu.