14.03.2016

Digitalization for Breakfast

This year’s SAP Innovation Forum is behind us. Bilot took center stage and managed to attract the vast majority of the 600+ attendants to its Full-stack Commerce stand. Less visible to the general audience was the VIP Breakfast event we hosted before the actual keynote speeches rang out in the large auditorium.

This year’s breakfast plot was about bridging together three levels of reality:

 

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Digitalization for Breakfast: Jani Puroranta, Turkka Keskinen, Mika Tanner & Pekka Ala-Pietila

 

Pekka Ala-Pietilä (member of SAP SE Supervisory Board) took a stab at the first topic from a macrosystem perspective to provide the breakfast plot with a suitable high-level framework. The winners of the digital game are those who understand the dynamics of the ecosystem and the power of the platform.

“The winner is the one that is the fastest and most adaptable to change.” – Charles Darwin

Industries are converging, time-to-profit is accelerated and the leadership paradigm is shifting. The engine of growth consists of four cylinders (user experience, compelling business model, technological superiority and cost competitiveness) where the combustion of innovation as the fuel. The dynamics of competition is played on either a vertical dimension or a horizontal. Ala-Pietilä wrapped up his insightful narrative with a clear call-for-action. For the ecosystem to have opportunities to develop and grow, the market must invest in development to generate a pull effect. Sufficient suction to pull innovation out of the ecosystem into the market and into use.

With this excellent back-drop, Turkka Keskinen (CIO of Biofore giant UPM) described how business transformation and digitalization co-exist. UPM’s ten year transformation has been staggering. It has reshaped itself from and integrated paper company to a collection of growing new businesses. By doing so, the company managed to defer the decline in revenues, double its operating income, halve its net debt, nearly double its productivity and exceed its long-term return targets in nearly all six businesses. Keskinen structured UPM’s IT strategy with an Ironman analogy – The Triathlon. The three disciplines are Build, Run and Transform.

“IT supports Biofore by Digiforce” – Turkka Keskinen

IT has an essential role in UPM’s business development, IT forms the backbone for business operations and it is an important cornerstone in implementing strategy. IT must be able to provide a coherent framework for the development of capabilities which provides maximum business continuity, ensures efficient portfolio practices and doesn’t compromise agility. IT development fundamentals didn’t have to be reinvented: doing things right and doing the right things.

Bilot’s Jani Puroranta (Head of an Amazing Offering) took a very practical stance and illustrated by means of meaningful business examples the gap between Digitalization in dreams and in practice. The discussion scope was digital, omnichannel commerce. Business priorities drive IT solutions – Jani selected relevant and topical drivers to illustrate how Bilot’s full-stack commerce framework provides a state-of-the-art solution. He showed four use cases which have direct business benefit: contextual merchandizing, fast routine orders and searchandizing, live scheduling and synchronized logistics and margin management. All four use cases have a strong impact on topline revenue and operating income.

“Digital Commerce Success is more than just fancy webshops” – Jani Puroranta

Harnessing data and understanding customer behavior is the first step in building a world-class commerce solution. Bilot’s full-stack commerce is of course just one example of how companies can amplify and secure their competitiveness. It nevertheless closed the loop to Ala-Pietilä’s rhetoric and hooked into Keskinen’s narrative on UPM IT Triathlon, which is all about transforming, building and running.

The three discussions confirmed my hypothesis of how the IT market is evolving. As a contradiction to the widely spread simplification theme, in fact the IT game (and business technology landscape) is becoming more complex. Perhaps a better term is ‘more sophisticated’ because control has also improved. Enterprise solution landscapes are not entirely cloudified yet and the emergence of increasingly compelling and even disruptive software solutions beckons insightful decision-making on architecture and eco-systems.

For a while it looked like platform dominance (the classical definition that is) was a genuinely possible scenario. But innovation, competition and technological progress has kept the game very dynamic. Also the outsourcing (and off-shoring) trend is reaching maturity and there is evidence of on-shoring. Especially in the large enterprise category, companies’ IT partner/vendor strategy is undergoing a renaissance towards a more conscious segmentation of vendors into two or three categories.

In addition to an undisputed need for scalable global (RUN) solutions for AMS and infrastructure, the need for application development (TRANSFORM) and early adoption (BUILD) partners has re-surfaced.

IT vendors must be able to adapt to a multi-vendor environment where the joint-mission is to provide long-term customer value. This heterogeneous partner lay-out is the new platform – which means platform equals ecosystem.

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Mika Tanner

Bilot Alumni