May 25, 2016

Forest and manufacturing in the digital competition - four predictions on how digitalization changes industrial business

Jaakko Vilén

Sales Director, Fintech Customer Experience, Tieto

This spring I have been travelling across Sweden: Växjö, Norrköping, Sundsvall, Stockholm and next up Falun hosting multiple breakfast seminars, presenting our view on digitalizing industrial business and learning about our customers’ view on this. Having met several forest and paper industry companies, I have had a good chance to compare Sweden and Finland.

In these sessions we have discussed what digitalization means to traditional manufacturing and process industry. You can expect to hear the usual buzzwords: IoT, digitalization, customer experience, innovation, big data. But actually these guys take it pretty seriously! And with a smile.

Last year we conducted a study about customer experience management amongst European forest and paper companies. We found a clear group of fore-runners with nominated responsibilities for the customer experience. We also saw that Swedish companies were investing somewhat less into this area than their Finnish peers. However, the forest and paper industry is a heavy producer of export business in both countries, providing a larger overall input to the national economy than the simple revenue. Also, the amount of networked cooperation is very significant: forest is a national asset both in Sweden and in Finland, a growing, renewing value-producer.

A note for comparison: Swedes use mobile apps more than Finns – this applies to the forest owners as well, who are on average 60+ years old.

The industrial business, in my opinion, is a lot more complex game than the consumer business. Take e-commerce as the most self-evident example: combine the heavy industry nature with large orders, customer-specific pricing, claim handling and all the supply chain partners. You don’t talk about “Click ‘n Collect” anymore! However, the customer experience across digital and offline touch points generates competitive edge just as much in B2B – Nordic companies are competing with speed and quality against the other global players.

What digitalization will change in the industrial business? My predictions:

  1. Online business: if it can be provided online, it will be. B2B buyers prefer to use their own ERP rather than a web shop? Fine, the solutions will be integrated and still give the same user experience as your favourite consumer store.
  2. Customer service: virtualization enables right people to serve the customer at the right time. And be proactive on it.
  3. B2B sales: nagging that the sales don’t update the CRM is yesterday’s news. The real question is that how do you make your sales more efficient than the ever-growing competition, especially from Asia. Data, analytics, mobility – it may sound simple but it will require new skills.
  4. B2B marketing: this will undergo the most significant transformation. CMO’s best friend will be the smartest data analyst who calculates the conversion rates through the customer journey.

What is common to all these aspects is that the technological change is the least difficult factor. Processes and people skills need to change as well. We at Tieto CEM have identified these four themes as the building blocks to our industry concept. To read more, please visit our new website: https://www.tieto.com/industries/manufacturing/tieto-industrial-experience

PS. The curious, non-business related fact from touring Sweden? The Swedes really turn up to a breakfast seminar at breakfast time, 7:30 am. In Finland I doubt that the attendance would be that high so early in the morning!

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