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Digital solutions ‘must make the value proposition much clearer’

A Lloyd’s List webinar has heard that practical blockages to the flow of data and the adoption of digitalisation are more psychological and commercial than technological. Follow the money, experts advise

It has proved surprisingly hard to sell even the most obvious digital solutions. Providers must communicate better and prove to the end recipients that there’s real value from this investment

WHY has digitalisation been so hard to sell to the shipping industry even though it seems to bring solutions to so many intractable problems?

This was the question posed by Lloyd’s List editor Richard Meade to industry experts during the Future of Shipping — Digitalisation webinar.

There are several practical reasons which, when taken together, show an evolution of industry expectation and an increasing focus not solely on technology but also on psychology.

“We have to work around the fact that the quality of data is not always that great, we [technology companies] need to adapt to this,” said Pierre Guillemin, vice-president for technology at Wärtsilä Voyage. “It’s not just about standardisation, it’s also the quality of information.”

Søren Christian Meyer, chief executive of ZeroNorth, said the pitfall was “unwillingness to share data. You will only share data if you get something in return, so the key is to get some value back.”

Ioannis Martinos, head of Signal Group, believes the secret lies in making it as easy as possible for people to adopt the technology. He agreed there was also a need to make the value proposition very clear — “what’s the benefit of using this technology?”

It has been “surprisingly hard” to persuade ship owners to invest in the simplest technology, such as the Mewis Duct, which pretty much guarantees a 5% efficiency increase, he said. “It took years for that company to convince maritime technical management that this tech really works.”

Sven-Eric Brooks, senior director for business development at KVH Industries, a maritime communications provider, called on shipping to look more closely at what had already been achieved in aviation, which is more consolidated and standardised, and ground transportation.

While there were good software solutions available for shipping, the mindset was not right, Mr Brooks said.

Mr Martinos dug deeper. “We need to communicate better, tell the stories better, prove to the end recipients that there’s real value there. This has proved hard for efficiency savings, and much harder for less tangible things like commercial benefits and long-term maintenance benefits.”

webinar

Mr Christian Meyer, whose company was spun off from Maersk Tankers to enable access to much more data than even the largest MR tanker fleet could offer, strengthened the call for commercial focus.

He said that while he understood that much of the digital conversation concentrates on the ship, “in the short term we need to remember the commercial side of the business because that’s where the advances are coming from.

“When it comes to behaviour, that comes from the commercial side of the business and from the CEO of the company,” he said. “If the proposition can’t translate into some value for the business you won’t see transformation. There has to be a commercial angle. Can I carry more goods? Can I cut my cost? Can I do more efficient business?”

He said everything began with the commercial question.

“That means the business models we are working with have to show tangible US dollar and emissions impact. While the technical department might see [the proposition] as innovative, what is the business case to be discussed at board level?”

The panel confirmed there had been some movement on the perennial issues of standardisation and collaboration.

Fragmentation of data sources and their use were just the nature of the business, said Mr Meyer. “Instead of imposing our standard on customers, we ask them to send what data they have… we have to be ready to work with any kind of data.”

Collaboration is increasingly real in shipping, but it must go further, according to Mr Brooks.

“[Collaborative] networks need to be wider than today, stretching from the newbuild stage through to demolition.”

Mr Guillemin agreed. “As a group, we might crack the challenges together but we are still at the level of players trying to solve it all by themselves. We have to find way to trust one another,” so that one specialist offers to work with another expect to provide “a perspective in this domain you simply couldn’t do by yourself.”

He said there were elements of psychology and technology in the digitalisation discussion — up to now the technology, especially technology focusing on the ship, has been dominant.

Now industry experts are beginning to identify unwillingness to lose competitive edge by sharing data, failure to see a strong value proposition, and a lack of urgency from shipowners because charterers and cargo owners are the ultimate decision-makers.

“We must see the value proposition for each of the players,” Mr Guillemin concluded. “We must specify what all the players are going to get out of [digitalisation] instead of talking about data platforms.”

You can watch the webinar on demand by registering your details here

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