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Wärtsilä undergoing a Digital Transformation: Marco Ryan
At the moment, it is speeding up the change at the accelerate phase
Marco Ryan, Chief Digital Officer and Executive VP, Wärtsilä.
Wärtsilä is a global leader in smart technologies and complete lifecycle solutions for the marine and energy markets. By emphasising sustainable innovation, total efficiency and data analytics, Wärtsilä maximises the environmental and economic performance of the vessels and power plants of its customers.
Marco Ryan, Chief Digital Officer and Executive VP, and a member of the Board of Management of Wärtsilä Corp. tells us more. Excerpts:
BW CIO: How is Wärtsilä leading companies to become digitally enabled, data-driven and insights-led entities?
Marco Ryan: Wärtsilä is undergoing a digital transformation, the biggest change the company has ever been through. Our change is planned in three different stages defined in our digital strategy: when we started the transformation, we went through a bootstrap phase – many quick pilots, trying new ideas and scaling those that were successful.
At the moment, we are speeding up the change at the accelerate phase – this is picking the ideas to scale and getting the right capabilities, milestones in place to drive quantifiable outcome. After accelerate comes sustain which is literally sustaining what we have achieved during the transformation.
Our digital strategy is very ambitious: we are set to change Wärtsilä into digitally enabled, data-driven and insight-led smart technology company.
However, we are not just to change ourselves, but also the industries we operate in. We are leading to change both Marine and Energy industries. We are looking to connect all our different technologies, share data more openly and create new as a Service business models base on the combination of data, insight and emerging technologies.
Some of the recent examples of our digital transformation in action is in the field of automated shipping where we tested the world’s first dock-to-dock automation in Marine; plus we have been doing predictive analytics and maintenance for many years.
BW CIO: What is the Smart Marine Vision? How will it support and enable working efficiently on business priorities?
Marco Ryan: The world is changing. The world's largest means of transportation, Marine, is undergoing a transformation that will impact every aspect of our industry. A Smart Marine Ecosystem will begin to take shape. With the most complete marine portfolio in place – including recently acquired new competences to help digitalise its services and connect platforms, vessels, ports, cities and beyond – Wärtsilä is in the ideal position to drive this change, lead the creation of a Smart Marine Ecosystem, and make the future of shipping a reality today.
Digitalisation will transform the marine operating environment, enabling a new network of united shores. This will bring into being new technologies, a new level of integration, new business models, and new approaches to sharing. With the widest, most comprehensive offering, no company is better placed than Wärtsilä to initiate this movement. We call it an Oceanic Awakening.
The Smart Marine strategy is based on this combination of thought leadership, technical know-how, industry expertise, big data and commercial innovation. It looks across the full value chain of marine – not just the traditional seaborne segment where Wärtsilä has been a dominant player – and looks at where the inefficiencies exist – typically between phases of that value chain. Smart Marine allows us to partner and create new solutions and services through that partnership up and down the value chain. This way we can increase the three main interests of our customers: Fuel efficiency, Safety and asset optimisation.
BW CIO: What is the Smart Energy Vision?
Marco Ryan: The revolution towards 100 percent renewables has started. The energy landscape is in transition towards more flexible and sustainable energy systems. Wärtsilä envisions a 100 percent renewable energy future. We are leading the transition as the Energy System Integrator – we understand, design, build and serve optimal power systems for future generations. Engines and storage will provide the needed flexibility to integrate renewables and secure reliability.
The journey towards a 100 percent renewable energy future is different for every continent, every country and every city – each has their own individual path. Wärtsilä understands the role of different technologies as part of our customer’s power systems and puts the assets of the customer together through software, full EPC offerings and global services capabilities.
BW CIO: How are you aligning efforts in the DACs (Digital Acceleration Centers) in innovation, in venturing, in cyber security and building the new IoT platform?
Marco Ryan: The Acceleration Centre concept is a new way for us to connect digital opportunities into Wärtsilä’s core products and services. Wärtsilä Acceleration centre combines a Digital Acceleration centre with a particular focus area e.g. cyber security. Acceleration centres act as incubators for new business ideas.
Using service design principles, we can rapidly assess their potential and quickly create a concept. The best ideas get funded as internal start-ups and move to create a Minimal Viable Product (MVP) in the transformation phase. Acceleration Centre emphasises fast learning by creative problem solving methods and skills that utilize customer insight, data and rapid prototyping. When they are proven and need scaling, they are seeded back into one of business lines.
The focus of Acceleration Centres (Digital Acceleration Centre & IM Acceleration Centre) is to explore new Business models and Growth opportunities, but also to drive greater internal efficiencies Such as using RPA to reduce repetitive tasks or to explore CRM ideas or tools that can increase efficiency and reduce our cost to serve.
This happens through testing and experimenting with new business ideas and business models.
Acceleration Centres provide a safe place for this testing outside existing businesses with needed facilities, skills, facilitation and guidance.
We currently have three Acceleration Centres across the globe (Helsinki, Vaasa, and Singapore). Acceleration Centres provide people with relevant skills, dedicated facilities, methodologies and collaboration friendly facilities for running the projects.
We work with customers, partners, start-ups, academia etc. in the spirit of open innovation and ecosystem thinking.
The IM Acceleration Centre (IMAC) accelerates strategic business and support function initiatives and extracts maximal value out of core IT platforms.
In IMAC, you can quickly experiment, test strategic business and support function initiatives. We extract maximal value out of our existing investments in core IT platforms and enterprise systems.
BW CIO: How have DACs helped in testing ideas and incubating new business models, embracing new ways of working in IM with the IM Acceleration Centre?
Marco Ryan: During just 1.5 years, the Acceleration Centres have profiled nearly 300 ideas. And, 150 of which have been assessed, about 50 have been through an incubation stage, and about 10 have been moved forward to the MVP/Transformation stage.
It critically creates an environment where we can co-create solutions with customers; helping to show how our company has shifted from transactional selling of engines, to a mature digital partner able to rapidly solve their pressing needs.
It has also helped to:
* Establish centres in both Helsinki, Vaasa and Singapore, and process of growing the network.
* Created an industrialised platform for innovation management methodologies and processes, including business design, service design and Lean Start-up.
* Scaling new digital businesses with Agile methods.
* Successfully supported ramp-up of Wärtsilä Businesses expertise in design thinking, service design and digital capabilities.
* Create continuous learning platform for growth.
In the IMAC, we typically focus at internal processes a round our core systems, it is bringing the best of the lean startup world to the Core IT systems and teams. The first initiatives were Salesforce focused but IMAC also explores and incubates new technologies and later other key enterprise platforms.
IMAC emphasizes lazer-focused creative problem solving methods and skills that utilize customer and user insight, data and rapid prototyping.
IMAC is one of the key components in learning new digital ways of working at Wärtsilä. This approach is a continuation to the agile way of working in IM. Now we have allocated dedicated internal Wärtsilä and Salesforce resources to extract business value and generate best in class experiences for customers, employees and partners.
The Acceleration Centre process consist of four phases: ideate and incubation are done in the Centres whereas the transform and growth phases are done outside of the Centres. Prior to these four phases a discovery phase is usually conducted in order to qualify candidates for the ideate phase. The Incubation develops the idea and educates the team members in how to work in an agile way.
The Transform phase takes the MVP script produced in the Incubate phase and develops it in sprints. The final phase is the growth phase, which extends throughout the operational life of the project. These projects utilize the “lean start-up” way-of-working with the aim to get things done at velocity. We incubate quickly and scale or fail fast – and if a project fails, we learn from it.
BW CIO: List any five trends that you see for 2019.
Marco Ryan: Digital transformation has been on the radar of pretty much all the companies for a while now. I believe that those who have not yet started their transformation will eventually do so during 2019. Some industries have already been through a thorough digital transformation and are working with digital methods and tools and living the new digital work life.
This is a major area of investment and expertise for us. We have set up the world’s first Maritime Cyber Emergency Response Team, we have a dedicated Marine threat portal for the industry, we have created Cyber as a Service for our customers and we are busy internally transforming our products and processes into a cyber-secure approach.
We help our customers understand the threats and how to mitigate them. Our cyber team has grown from 5 to 35 in just 12 months and has a global presence. Cyber security will be one of the hot topics for this year, for sure.
Blockchain is maturing quickly. It is moving from being hype to something that many industries are looking for to enhance security, data and processes. We think we will see first use cases in the Marine value chain using blockchain technology. Not saying it will necessarily be Wärtsilä using it, but sure, someone in Marine will.
As a Service operating model
We will see an increasing shift towards as- as Service solutions and business models in both energy and marine industries. This will be due to the better utilisation of IoT, big data, cloud platform and AI – together these technologies provide a way of commercialising the opportunity and setting these up as on 0demand or subscription based services.
Data, data, data
Making data as a valuable asset has been in the focus of corporations but the importance of the use of data is still growing. What can your company do with data? How do we make the most out of data? How is data stored and shared? What about customer data? What kind of services and solutions can be developed to answer to customer needs rising from their data?
AI - an explosion in the proactive use of automation and AI
Things such as RPA will become more commonplace; we will see internal processed being automated or optimized through AI agents and big data and an increasing use of predictive analytics to drive new commercial opportunities.
Core process improvement
Making core processes work better and easier plays a very important role in digital transformation. People tend to think that transformation is all about new, but actually improving everyday work with the help of automation and smoothening processes will free up time for the core of the transformation. When many jobs are easy to do, people will have more to learn, develop the new and find different ways to work. In addition, that is what the digital transformation is all about.
No more wasting time on unnecessary waste, let us transform the business!
Work like a start-upper: Growing ownership
Taking accountability as if you were an entrepreneur or owner of the company you work for is a growing trend. This means working like a start-upper. This is a big change for many big corporations, which are often led with the traditional top down approach. Growing ownership changes the ways of working for the employees but also for the management. Giving more responsibility is a matter of trust, and I believe this needs ways of working, co-creation with customers, and even with enemies, impact of technology.
People over technology
Companies will finally understand that transformation is made of people and they need to be taken care of. Technology is important but you will only get so far with digitalizing technology, the rest is about your people. New ways of working, changing the company culture, start-up mindset and willingness to test and learn are something that people need to adopt to enable the transformation.