Why is digitisation so difficult?

2015-06-24, 12:50 Posted by: Petteri Puhakka

The key problem in the Finnish economy is the poor growth of productivity – especially as our economy is changing into an increasingly service-driven one.

We must make investments in the digitisation of services. We can increase the productivity of the entire society by creating services that are suitable for everyone and streamline the complex, sometimes ridiculous twists.

Ridiculous in what way? For instance, Finland has a watertight population register, but despite this, everyone has to separately register their children for school.

As productivity increases, it becomes possible to direct workforce to fields where there is or will be a shortage of labour.

Everybody wins. Why is it still so difficult?

What do you mean, delivery time?

In the recent survey by PALTA, the employers' organisation in the service branch, it was found that the significance of digitisation is understood in companies that actively seek growth. However, of the companies that responded to the survey, more than 60 per cent did not have digitisation among the company's strategic goals.

Apparently, that 60 per cent also includes the trade sector, the difficulties of which have been on the news in a daily basis. Foreign online stores, on the other hand, are high-quality, and the goods bought from them are delivered quickly.

No wonder they are frequently used. For instance, a year ago the online service of the largest bookstore in Finland could not confirm the delivery time of books purchased. This seems like a minor defect, but if we are talking about books intended for Christmas presents, the user of the service really wants to know that they will arrive in time.

Maybe people have not yet quite understood how big a change this is. Adapting to a major change like this requires patience, and those expecting fast results do not have it.

The financial sector was the first to step on board, but the services need to be constantly renewed. In England, for instance, innovative services are tried out more actively, which is reflected in the results: 85 per cent of insurance policies are sold online.

The media have been resilient. Despite the challenges and the economic downturn, the sector has continued making investments, and a change is on its way as indicated by many examples.

The advertisement income of the media is increasing. The income of Alma Media's digital services exceeded that of traditional print media. The sales of the digital versions of Kauppalehti and Helsingin Sanomat are also growing. Long Play, featuring long articles, is moderately successful, and more and more people are paying for TV content, for instance. Who would have believed in such a development a few years ago?

When will municipalities wake up?

Within industry, many corporate leaders have woken up to see the benefits of the Internet of Things. The sector features several forerunners, such as Pekka Lundmark, the CEO of Konecranes. However, full benefits can only be reached after industrial companies create service business based on the possibilities of the Internet of Things This requires moving outside one's regular comfort zone. Are we ready for this?

The same can be asked from the public sector. We have excellent examples of solutions used by the tax administration, Kela and permit administration. The municipal sector is lacking in success stories.

The services of the public sector are fragmental copies of existing operating models. However, there is good reason to consider the wider view, larger entities that serve the citizens better.

Citizens are still asked for information that another administrative branch has already collected. This is a waste of resources.

The hindrance to digitisation often lies in the attitude. We leave things incomplete, believing that it is not possible to change operating methods and legislation or that the resistance to change cannot be overcome. With this attitude, we will not succeed in the increasingly international and tough competition.

In the spirit of Väinö Linna's characters in Tuntematon Sotilas, we must get going and believe in success.

Petteri Puhakka, MD Cybercom Finland

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Tapio Koivisto

Head of Cybercom Finland

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