April 8, 2015

Will younger generations lead the digital change in the forest and paper industry?

Jaakko Vilén

Sales Director, Fintech Customer Experience, Tieto

Customer Experience Management (CEM) is not widely recognized as a key business driver or enabler in forest and paper products industry, but there are clear signals that early adopters are far on their way exploring the opportunities of digitalization.

These are the first results from a survey study conducted by Tieto on digital Customer Experience Management in European forest industry to find out about development plans in 2015-2017.

Interestingly, digital CEM is not high on development priorities list in the forest and paper industry, although customer loyalty and operational efficiency are found to be key drivers for the industry. I believe the reason for the lower level of investments at the moment is simple: traditionally the major parts of forest companies' business results, and competitiveness, have been improved by focusing on production and supply chain. This may no longer be enough in global competition.

In comparison to similar recent survey in 2014 on Financial Services and Retail industries, Forest is lagging behind in CEM development activities, due to skepticism and a lack of a sense of urgency. In the Nordics, the investment levels are clearly lower than in banking or retail sectors. Therefore eyes are set on other industries to lead with inspiration, rather than looking what competitors are doing.

Forest companies have been undergoing very heavy transformations – many are moving away from paper production and entering the global competition. Value chain operations are on high level: joint innovations from wood or pulp based products are common and provide even wider growth expectations on Nordic economy. For these reasons I believe that forest industry has a good capability to exploit digitalization as an opportunity faster than other manufacturing industries.

The next transformation, serving the B2B customers through digitalized channels, steered by computer intelligence and providing real-time delivery information, will not be visible to people in common but will change the way of doing business. As the first movers are already testing the waters, the change is inevitably on its way. Customer service video meetings and chats are spreading with speed, while e-business solutions are already common in wood supply services. In Finland for example the big three, Metsä Group, Stora Enso and UPM all offer services for forest owners in a secured online platform. More demanding customers and visionary managers will probably be the ones to lead the forest sector CEM transformation into B2B business similarly.

In my blog I will next invite experts in the forest industry to share their views on how the industry is expected to evolve in the digital era. You can read Matti Ketonen's views on Customer Experience Management here. He works at Metsä Board as the Vice President of Supply Chain Planning. From here you can find Jaakko Partanen's blog post. He works as the Communications and Customer Relations Manager at Stora Enso.

Read more about our study on the Forest Industry here.

Stay up-to-date

Get all the latest blogs sent you now!