Do you work in industry, the public sector or business? Then you need to know what the process of digitalization is all about.
We’ve created a model that visualizes this process and how it is developing. Many organizations find themselves at step three on a five-point scale. Products are connected, but it’s only in steps four and five that large opportunities are created and new service models emerge.
It’s the last two steps that hold most of the value, and these are also the most challenging steps, because they require cooperation.
A product is sold according to a linear business model. This reflects a traditional value chain between company and consumers.
The product is computerized and becomes a little smarter. This marks a transition from a product-based society to a society with greater focus on services. Smart products can simplify daily life, for example, with GPS navigation, making homes more secure, or creating a better indoor climate.
Products are connected to the internet and offer even more services and information via digital functions. Smart mobile phones, for example, connect automatically to car stereos via Bluetooth so that conversations use the built-in handsfree functions. The internet of things (IoT) makes its entry and numerous systems start communicating with each other, and with people, in real time. Autonomous factories are enabled. It’s increasingly important to keep up with software development and data processing.
Product sales are now combined with new services and solutions. The industrial ecosystem is a metasystem that includes energy, logistics, platforms, special products and parts aftersales. It’s all about smart, automated solutions and connected production – the keys are information and platform thinking.
Microsoft, Amazon and Google were among the first companies to abandon the linear way of thinking about products. Among industrial companies, Volvo realized early on that it was no longer sufficient to just sell a car, so they teamed up with Uber, a taxi company, to sell complete transport solutions to consumers. Epiroc, a mining machine manufacturer, sells mining operation services today, rather than just selling heavy equipment.
Development now takes a disruptive turn, leading to a real change in working methods. Everything goes so much more quickly when Big Data is automated and visualized. And it becomes central to be able to analyse software and data contents, as well as which information is made accessible. Moreover, the value of the old linear technology is only about a quarter of the value that can be generated in complex, digital, platform-based business models.
In the last stage, different ecosystems connect to each other and share information and value. In practice, an industry-specific ecosystem is connected to a production system, which is connected to a road-based transport system, which is connected to a waterborne transport system – and then all the way to an individual person.
Among the connected ecosystems that have come the farthest are that in Barkaby, a suburb of Stockholm, automated ports and smart roads, and carbon dioxide-free mining.
No single company can deliver a solution like this, since solutions build on cooperation among many actors and partners, often in different industries and disciplines. Fundamental parts of these ecosystems include AI, management systems, decision support and digital technology. Digital components such as IT, OT or product technologies become more compatible and begin cooperating via IoT, networking and Big Data to create an ecosystem. Starting this process requires an awareness and action plan that covers cybersecurity, in order to ensure that all parts of the organization are secure. It is also essential to have good data quality.
At Combitech we have accumulated experience from digitalization processes within the aviation, defence and telecommunications industries, among others. We have the expertise necessary to guide and integrate different parts of the digital ecosystem, while at the same time protecting and securing information and critical systems. We can help you find the right partners and the right components to create a digital platform. Our perspective is based on people. Our methodology takes you step-by-step from analysis and vision to realization and execution.