Dr. Richard Hubach demonstrating a VIEW 1101 Pattern
Recognition System attached to a wirebonding machine.
February 2nd, 1980. (Wikimedia Commons, Jecknowledge).
Digitalization is frequently cited as one of the major trends changing the society and business in the near and long-term future. When dealing with buzzwords and hyped technologies, a common trend is to overstate the effects in the short term, while the long-term effects are underestimated. A natural consequence of the initial disappointment is to become overly cautious with respect to long-term benefits of investing in new technologies and corresponding business model innovations. This causes excess inertia and reduce the abilities to gain competitiveness by adapting to changes in their business environments in an agile manner.
Our research has addressed the challenge of digital business transformation in a continuum of the projects, including Cloud Software, Need for Speed, IT Houses to Boost Industrial Internet, Gognitive radios for 5G (CORE++) and a current effort towards a comprehensive digital transformation model, among others.
Based on the survey conducted by the institute and VTT on behalf of the Oulu Chamber of Commerce, well over two thirds of the nearly 100 responding companies in Northern Finland indicated that they will invest in digitalization during the coming twelve months, and expect to increase their investments. Cost savings, more agile process management, more efficient marketing and increased customer satisfaction were seen as the key benefits of digitalization.
However, the respondents also indicated several challenges. Appropriate competences related to technology adoption and business transformation were seen as the key hindrances of digitalization. These were similar to the results from an other survey over 200 German companies.
Moreover, one defining characteristic of digitalization is that it is a moving target, meaning that the ability to take an advantage of the emerging opportunities requires attaining the right combination of technologies and business models. The benefits do not come from technologies per se, but companies must transform their processes and offerings. Hence, a need to increase our understanding the challenges of the future digital business in a systematic and analytical manner is evident.
Timo Koivumäki
Professor of digital service business
Timo.Koivumaki[at]oulu.fi, Timo.Koivumaki[at]vtt.fi