More than six months since COVID-19 sent much of the world into lockdown, economies remain fragile and there’s no clear endgame in sight. It's a hard time for businesses to look forward and make plans, but “wait and see” isn't a viable option. Ville Sointu, Head of Emerging Technologies at Nordea, is used to planning for the future in the face of uncertainty. We asked him what advice he had for companies considering make-or-break decisions right now.
Research suggests that, despite COVID-19, few companies are shelving digital transformation projects. In fact, many are accelerating their efforts. How has the pandemic changed priorities?
“From a technological point of view, I think the short answer is ‘not a lot’. Naturally supporting the dramatic acceleration of remote working and growth of e-commerce has been challenging, but overall technology hasn’t been a major problem for businesses. But what the pandemic has done is force companies to ask questions about how we’ll interact in future.
“At present the focus is on contexts where work can’t be done remotely and brings people together in one place. But I also expect a reappraisal of what really does need face-to-face contact, and what doesn’t, for office-based workers who can work from home. It’s time for businesses to reconsider their investments in office space and requirements for business travel, because there are clear pros for having less of both. Not just considerable cost and time savings, but also the environmental benefit.
“But there is a ‘but’ here, and I think it’s a big one: Serendipity. In my experience, chance encounters play a major role in sparking the thoughts that underpin innovation. If colleagues only come together for specific planned meetings, and people radically reduce the number of events they attend, we risk a significant reduction in innovation. So I believe that as businesses re-think what their workplaces will look like and how their people will interact, both internally and externally, they really need to think seriously about how to ‘preserve the randomness’. Can we find ways to do this digitally, at a distance? I’m not sure, but I think it’s something that should be top of mind for business leaders as they review their transformation plans.”
So what is the next big thing for businesses to focus on, beyond near-term survival?
“I’ve been a tech evangelist for more than 20 years, continually getting excited about the next ‘big thing’ and how it could change the world. I still get excited, but I’ve learned that the future never lies in any single development; it’s always a combination of things, of learning something useful here and something else there, and bringing them together to do something new or better. Twenty years ago, I was convinced that the Wireless Application Protocol would disrupt everything. It didn’t, but 5G might. And just as the telcos and device manufacturers learned a lot from WAP, what I learned from exploring it made me ready to help companies take advantage of the mobile technologies that came next—so much so that I was able to make a career out of it. The same is true today of blockchain. I can’t tell you which distributed ledger technologies and applications will have the biggest impact on how businesses work. But I know that Nordea will be ready, because what we’re learning about using blockchain now will be transferable.”
Are you saying that businesses should be an early adopter, even if that means sometimes getting it wrong?
“Yes and no. It’s true that many early adopters will find themselves investing in technologies that don’t last, so you do need to make these decisions carefully and be clear about what the business benefits will be despite the obvious risk. But even if a particular technology doesn’t deliver everything you’d hoped, it can still help you learn and improve your business. The secret is to create transferable competencies.
“I’ll give you an example. One of our customers produces manufacturing equipment and they’re developing clever new digital features that improve the efficiency of production lines. But they understand that this isn’t just about new technological capabilities, it’s about exploring new business models. They’re saying to their customers, ‘why don’t we look at a model where you pay us based on the savings our equipment enables for you?’ And as their bank, we’re helping them work out how to measure this reliably and make it work financially.
“It won’t matter that much if they have to change their sensor technology, or networking, or analytics platform in the future, because what they’re learning right now will serve them well whatever turns technology takes. They’re learning what data to capture, how to store and protect it, and how to analyse it. What they learn about measuring the work being done by component parts of a system and the value delivered at each step—at a very granular level—will be a competitive differentiator whatever the future holds.”
So, there’s no single next big thing. What one piece of advice would you give to companies thinking about their technology investment priorities as we head into 2021?
“Focus on developing a wide base of competence in the types of technologies that are likely to make a difference: from mobile networking and edge computing to distributed ledgers, internet of things and artificial intelligence and machine learning. None of these is more important than the others, and it’s impossible to know which specific aspects of each technology and which applications will last. But I can tell you with a high degree of confidence that the businesses that thrive will be those that try. They will learn enough, even with technologies that end up failing, to be ahead of the curve and better prepared to exploit the technologies that do take root.”
For more information write to Ville at email@example.com
The information provided within this website is intended for background information only. The views and other information provided herein are the current views of Nordea Bank Abp as of the date of publication and are subject to change without notice. The information provided within this website is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient.
The information provided within this website is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information provided within this website has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results.
Nordea Bank Abp is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction.
The information provided within this website may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Bank Abp.