On May 5th, I was joined by Secretary of State, Lucie Katrine Sunde-Eidem; CEO at Dolphin Drilling, Bjørnar Iversen; Communication Director at IKT Norway, Line Gaare Paulsen; and Nordic Consulting Manager at IFS, Per Arne Flatebø to discuss post-pandemic Norway and what part technology will play.
The pandemic has affected Nordic and global businesses and industries in various ways. For some, entire livelihoods have been torn away overnight. For others, working from home and forced digitalization have opened up new possibilities. So, what does this mean to the Nordic business community? Has the pandemic affected our ability to respond to economic challenges?
A survey conducted by IFS last year showed that as many as 70% of all 3, respondents plan to increase their use of digital business solutions. This is not very surprising as digital solutions offer more flexibility, increase innovation, and support sustainable targets and growth. Society did continue to function despite no face-to-face meetings, no travel, and less paper. What changes do IFS foresee in the Nordic markets, and how can we benefit from these changes?
Unsurprisingly, we see an increased focus among our customers on increasing efficiency, cost control and the use of new technology to develop and introduce better products and services that enable them to respond to ever-changing customer demands. The cloud is a prerequisite as it provides the flexibility the business community needs to accelerate faster to a digital business model and adopt new technology and innovation. Analyst firm IDC predicts that by the end of 2021, 80% of enterprises will put a mechanism in place to shift to cloud-centric infrastructure and applications twice as fast as before the pandemic. IFS Q1 results that more than 80% of our software revenue is subscription-based, and we see an increase in cloud delivery of over 100% compared to the previous year.
How Does IFS View Digitalization?
Companies fall into two categories:
- Those who have made significant investments and plans for digitalization before the pandemic hit.
- Those who, for some reason, lag behind and now lack the right tools and flexibility to adapt to rapidly changing business criteria and introduce new revenue streams to their business. There are three areas that separate the winners from the losers:
- Virtual collaboration – many companies have used augmented and merged reality solutions to survive and operate their business efficiently despite pandemic-related social distancing mandates.
- Utilization of resources – technologies that help companies optimize their resources to ensure a positive operating profit.
- Customer engagement – to be competitive in today’s consumer society, companies must work more closely with their customers than they have ever done before, and ‘service’ will be the factor that differentiates one product supplier from another. It is all about having the right tools in place to anticipate customer needs, deliver high customer satisfaction, and achieve customer loyalty and repeat sales. In addition, companies must ensure the right employees are in the right place at the right time to achieve maximum operational efficiency to deliver your products and services.
How Can Customer Engagement Help Companies Get Back On Their Feet?
Although servitization has been a buzzword in our industry for many years, we now see an increased focus on service and what we call performance-based revenue models. Many of our customers are looking for opportunities for how they can grow their revenue streams and are now considering the possibility of adding services to their products in order to move to a more predictable results-based revenue model where extended sales agreements include services such as maintenance, installations, etc.
Technology and a digital business model help companies identify new revenue streams and give them the flexibility they need to develop and change to quickly offer new products and services in response to changing market demands. The winners in a post-pandemic world will be the companies that know their customers and what is important to them throughout the customer journey.
We see that traditional industries such as manufacturing and construction have introduced service revenue streams to their business models and use technology as an aid to success on this journey.
The Oil & Gas Sector: A Digitalization Frontrunner
One industry that has faced major changes in the market is the oil and gas industry. For oil and gas companies, like Dolphin Drilling, technology plays a vital part in continuing a sustainable and profitable operation without lowering safety and efficiency requirements. These companies are used to operating across geographical borders and understand the importance of mobility and flexibility.
18 months ago, no one would have thought that important projects would be delivered by 100% virtual teams. The fact that they now are will bring about major changes. Perhaps the companies of the future will be those who work ‘anyshore’, not ‘offshore’ and ‘onshore’. In other words, the companies that deliver their expertise from where the expertise is located. The oil and gas industry has had many of the necessary mechanisms in place for many years. Moreover, a majority of businesses in this space show a willingness to adopt new technology, learn from other players in the energy sector and quickly adapt to constant changes in the market.
As these companies are used to working remotely and across national borders, the industry is ahead of many others when it comes to digitalization and utilizing technology to streamline their operations. For them, it is not so much about reengineering processes from scratch but strengthening the processes and routines that they already have in place.
Efficiency will in the future come via capturing, interpreting, and operationalizing the large amounts of data to drive efficiency and growth. Owning the data will be as important as sharing the data. Streamlining has come a long way for the individual businesses, however, the next step must be taken collectively across all industry players (authorities, customers, suppliers, and employees). Only then can small improvements accumulate into large ones.
This post has provided a snapshot of the lively studio discussion I was recently part of, featuring luminaries from across the oil and gas, government, and technology sectors. To learn more, watch the full studio interview now.
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