Digital Transformation, not Digitalisation, is what’s new

July 7, 2017

ai-cropped-640x353Digitalisation is frequently used as the name of the game today. But digitalisation, i.e. conversation from analog to digital representation of information, started some 60 years ago and has been going on ever since. When a process is fully digitalised, from end to end, the process will be much more efficient than before. But most processes today are only partially digitalised which is like building a bridge and leve some meters here and there. Let’s take the example of a smart electricity meter, where the collection of usage data is digitalised and hopefully the receiving systems at the energy company. But then the processed details often are put on paper and sent to the customer who hopefully pays in a digital fashion or god forbid calls customer service.

A fully digitalised process is quite efficient but more importantly it is a great starting point for artificial intelligence in any form or shape to be applied. Imagine that we could move the simplest 30% of the decisions in a process from people to computers. What would that mean to your organisation’s cost, quality and speed of execution, and not to forget your competitiveness? What if we could add an algorithm making our system self-learning thus provide qualified decision support for the remaining decisions made by your staff and maybe even advise to your customers. This is what Digital Transformation is about and that is what we should talk about rather than digitalisation. 

It is IoT that adds the last meters of the digital bridge. By connecting the real world to the Internet where we already have people and organisations we can start complete the digitalisation of our processes – a sensor that tells when a door is open, where a car is located, when it’s time to repair a fridge or when the level of carbon dioxide is too high. And this is exactly what the more progressive organisations are working on right now. And since organisations and processes are quite unique there are a huge amount of opportunities for companies to develop algorithms to support specific processes. I already have many members in my alliance for Swedish IoT startups working with machine learning including Ekkono, Watty, Aifloo, CombiQ, BellPal and Imagimob

The effects of Digital Transformation will be massive in all industries and large-scale redundancy will definitely hit white-collar employees as organisations get their act together. I miss awareness and a serious debate about this in Sweden since it limits our chances to come out of this transition strong, the longer we wait to address the challenge.

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Small and big companies must learn how to work together

July 22, 2016

thingsenterprisecircleThe pace of technological development remains vivid and it takes great people and sharp focus to understand what to use it for and how. Like if this wasn’t challenging enough, a new generation of internet is rapidly emerging where things are added to the people and organisations already connected. The three key deliverables from IoT are efficiency, security and sustainability and this alone will make huge impact on business and society. Almost everything will be affected why it’s vital to start work on risks and opportunities in all fields now. The only big difference from when Internet arrived is that ignorance will not be an acceptable excuse this time.

Imagine combining 3D scanning, Internet, data analytics, design software and 3D printing. What would that do to fashion, retail, healthcare and distribution? Or heat cameras, drones, Internet, cloud computing and data analytics. What could that do to fire fighting, border control, building management and search for lost people.

We are facing huge change in the magnitude of when we went from farming to industry and it’s really time to start working on all the opportunities and issues.

Most new solutions involve connected hardware which makes life somewhat more difficult. Hardware adds complexity and time, requires financing, impact the environment directly and increase financial risks. Large scale manufacturing has moved to developing countries and with that also experience and skills. It’s quite easy to see the value added by data from the connected things but unless someone connect them there will be no data. We simply will have to cope with the fact that things will stay in the physical world even if the virtual world is much easier and faster to work with. One important implication of that is that innovative and successful startups with hardware as part of their solution hardly can scale up to become global since it will take too long time. This is why we have to learn how to transform innovation in sharp startups to value creation in large international companies.

We started the hardware hub THINGS downtown Stockholm in March 2015 to learn how to make this transformation. We have some 30 carefully selected startups and Sweden’s biggest maker organisation in our 2000 m2 building at the campus of KTH Royal Institute of Technology. And we have a handful of export companies including ABB, Assa Abloy, NCC and Husqvarna as main partners. Since hardware is too broad we focus on themes agreed with our partners and these are IoT, sensors, wearables, 3D scanning/printing, automation and robotics. We have been practicing for over a year now with all types of meetings, events and workshops with our industry partners and other enterprises including Deutsche Telekom, Daimler, l’Oreal, Airbus and Nike. By now we have learnt enough to scale up our efforts and involve more startups and enterprises. The current startup community involved includes some 150 startups now and in June we launched THINGS Enterprise Circle to build a community of Swedish and international enterprises who want us to help start or accelerate their technology innovation and digitalisation efforts.

At this point it’s clear to me that efforts to learn how to transform innovation from small to large companies have to be based on processes not one-off events, absolutely common interest (i.e. IoT and hardware are far too generic but battery technology and energy harvesting or wearables are ok) and really careful selection of companies and people for workshops. The purpose of a workshop is to inspire and bring new ideas and approaches to the enterprise and the aim is to have the enterprise to buy projects and prototypes from the startups to get the collaboration going.

Small and large companies who learn how to work together in an efficient and mutually beneficial manner will be the winners in the networked society. We are determined to figure out how to make this happen at THINGS and welcome enterprises and startups who want to be part of our journey.


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