Bound and determined collaboration
"Things are definitely happening regarding digital transformation within Swedish industry. The problem, however, is that it's not enough." This was stated by Mats Agervi, and he should know what he's talking about, since he is the Head of Combient, a collaborative forum for some of Sweden's leading companies. The sole purpose of the forum is to promote collaboration within the group in order to expedite the successful digital transformation of member companies.
"Perhaps it is just the nature of things, yet I consider this to be taking too long," says Mats Agervi. "But it's easy to become stressed when you see what's happening in the world. We are losing the advantage we might have had. We should stop beating our chests and learn from the USA and Germany – as well as some Asian countries." The reason for Mats' concern is that he sees how long it takes to convert traditional companies.
"It's easier to implement change when one is faced with a serious threat – when you have a gun to your head. But we're not quite there yet and that's why we're not moving fast enough. Moreover, there are still only a few examples of traditional companies who have made a successful digital transformation. Most are lagging far behind."
The consequences of this have been demonstrated ad nauseam and Swedish companies are, by all accounts, aware that change is needed. This can result in a new competitor appearing out of nowhere, or from a completely different industry, and introducing a new industrial platform before established companies have a chance to adapt. But, in reality, what can be done about this? This is the predominant question in numerous companies.
Danger of underestimating the scope
"There is a risk that companies do not understand that major changes need to be implemented. In cases where data becomes more valuable than the products, a company's entire business model can be expected to change. This may lead to your company losing the customer network you have 'always' had. Another company can usurp the sales model and you may become just another supplier among many others, with no direct communication with customers. Compare this to what happened all those years ago when Amazon was founded."
Of course, not all companies are affected to the same extent, but all are affected nonetheless – sooner or later. The first step should therefore be to develop a comprehensive digital vision for the company. The sooner this is done, the more prepared you'll be. Subsequent work can partially focus on strategically identifying a functional business model, and on rationalisation – by considering how digitalisation can impact company costs.
"A company must have goals linked to its business model and operations. This process involves traditional Change Management. What do we want to achieve? Which skills do we need? And how will we work towards this?"
At the same time, it is not always easy for an individual company to comprehend the degree to which the long-term consequences of digital transformation within other areas may influence its own operations, or how different technologies can be practicably applied. Fortunately, Combient has considered this in detail.
"We help our members to advance their digital transformation. We do this by examining that taking place at leading international companies, we evaluate research, participate in conferences and visit companies to gain insight. We recently travelled to New York together with our members to inspect the work being done by IBM and IPsoft within artificial intelligence and cognitive computing."
Impact on business models
At a more hands-on level, Combient is experimenting with technologies which, in all probability, will have an impact on company business models. This can involve everything from Machine Learning to Blockchain and Analytics. To seriously take a step in the right direction, companies can get help with implementation in their individual companies. Yet, this is not what Mats Agervi stresses is most important.
"The most important thing is to foregather people from various industries in order to jointly discuss how digital transformation can be undertaken in practice. None of our member companies is in direct competition with one another, which allows them all to be open with the progress they are making and to share their knowledge."
This can relate to how the companies are able to create a new customer segment based on how customers utilise digital services, or the development of solutions for preventive maintenance. Because there is no direct competition within the group, it pays for all companies to be as open as possible.
Desire for complete openness
This in itself may afford Sweden an opportunity to reclaim initiative in the global digitalisation arena.
"Sharing our knowledge so openly is, as far as I know, wholly unique. I have not seen this in the USA nor Germany."
Companies eager for something similar to this are welcome to establish their own forums, as Combient is not looking to expand at this time.
"At present, we comprise 18 companies. All of which participate pursuant to the same terms and conditions and each and every company actively shares knowledge and experience. And they take this very seriously. We have a valuable combination of companies and, if we become too many, there is a risk that our full openness will diminish and we will lose trust in each other."
Combient is a collaborative project involving some of Sweden's biggest industrial companies, most of which are linked to the Wallenberg foundation, such as Atlas Copco, Ericsson and Electrolux. The member companies have a collective turnover of more than SEK 800 billion. And all are bound and determined to take digital transformation very seriously.