Why open collaboration is important?
Open innovation, open collaboration and networked economy are terms that seem in the digital era already like such clichés – but the reality in action is actually at many big companies still far from openness. It seems that these terms are still needed in case of working for improving their productivity.
To get an overview of how digitalization and open collaboration should be a part of every manufacturing company, I had a chat with two team members of Finnish startup Jakamo: investor and board member Juhani Hintikka (the CEO of global software company Comptel) and investor and advisor Mårten Mickos (SVP of Hewlett-Packard).
Jakamo is an online collaboration platform that connects customers and suppliers in the manufacturing industries – And allows transparent information sharing across companies. The company has already customers in 27 countries.
So get as much insights as possible from both Mickos and Hintikka – who both have significant amount of experience in global software business – I put together a Questions and Answers session to share their thoughts.
Openness Is The Key?
Q: What makes open collaboration important for ‘traditional companies’?
Hintikka: “I believe open collaboration is beneficial for all companies, traditional or new. It is about the speed of doing business but also about the new ideas that typically emerge as part of the open collaboration. Openness is related to trust and trust brings speed. So we environments where this can happen.”
Mickos: “The world is changing. Companies used to be big independent entities that manufactured everything themselves. Now we have entered the era of the networked economy. Many people who work for a company may be freelancers or consultants from another company. Many parts of the manufacturing chain happens outside of the company. For all these reasons, quick communication and collaboration is vital, and this collaboration must happen across different organizational entities.
Otherwise the company would move slowly and would be unable to make small adjustments to the processes.
Perhaps you will then say ‘OK, collaboration is the key, but why does it have to be open?’
When collaboration is open, it will happen faster and be more trustworthy. People can fix problems sooner and be more innovative because they have a holistic understanding of the processes involved in the collaboration. And when collaboration is open, people tend to do a better job. Openness brings out the best in human beings.”
Q: How would you describe the biggest changes that have been experienced in supply chain management through networked economy?
Hintikka: “The aspect of global economy is very visible in this space. It is nowdays easy to collaborate across geographies and distance, access information, seek the most cost effective solutions or services. All of this is enabled by the advances in information technology as well the drive for free trade, common markets and deregulation.”
Mickos: “In my view, the fact that the one who delivers a branded product to the end-customer does NOT own the entire manufacturing chain. The customer will trust YOU and YOUR brand. You must trust your suppliers.
Learning to work very closely with your suppliers and other partners is a huge organizational change. This change has been going on in the industry for a couple of decades, and it continues. As IT evolves and improves, the tools for collaboration also change.”
Q: What’s the role of open collaboration in ‘the digital era’ in manufacturing?
Hintikka: “Fast exchange of information and ideas, leading to increased productivity and growth.”
Mickos: “Its role is to make sure the necessary information is available immediately for the person or group needing it, and to be the place where people can discuss and agree on how to take an initiative forward.”
Q: So openness is a necessity for manufacturing companies?
Hintikka: “I think any company aspiring for higher performance and speed of execution can benefit from openness and a networked business model.”
Mickos: “If you want to win, yes.”
Hintikka joins the Jakamo team officially on October 13th.
Q: A lot of traditional companies are at a hype at the moment in Finland with the punchline “digitalization is coming and changing everything” – But digitalization is here already.
How companies who haven’t yet operated on the fact that digitalization is already here can adapt?
Mickos: “It’s an interesting question. Digitalization is certainly here already. But in the grand scheme of things, it is also only taking its first steps now. The world is adding more and more computerized intelligence into manufactured goods and into the machines and processes that produce them. This type of digitalization is happening only now.
Figuring out how to do that and how to manage it is a big undertaking for most companies. The most insightful companies know that you must digitalize not just the manufacturing, but also the collaboration between human beings that surround and manage the manufacturing process.”
Hintikka: “There is much discussion about everybody needing to rethink their business model with the advent of digitalisation. However, for many companies digitalisation can be seen as a continuum – digital technologies help develop them become more effective. For example in the industrial services segments the lower cost of instrumentation (sensors) and the availability of cloud based data processing technologies allow for more efficient service operations.
Of course there are also segments like consumer services where the proposition can be so disruptive that the new competition will run so fast that it puts existing companies our of business.
In general – many of the needed capabilities are there, available to all companies, to be rented at reasonable cost and it is just a question of starting to use them. Storage, computing and applications are available as cloud services. Fiber and 4G networks provide connectivity at unprecedented speeds. Smartphones in every pocket provide easy access to all of this. Applications help define the offerings and communicate with customers.”
Jakamo As The Information Broker
Q: What caught your interest in joining Jakamo?
Hintikka: “I was impressed by their domain knowledge but also their focus and energy in pursuing their ambitions.
Jakamo has the potential of becoming an important broker of information in the manufacturing space and any other segment that has a networked business model. As the number of Jakamo users increase its importance and impact increase with network effect.”
Mickos: “A brilliant team with a clear vision, with every activity of the company linked to real customers.
There are many vendors of different types of this space, so at some point it will be a competitive market. Jakamo is an early pioneer. It is still a small company, but it has the chance to be a leader in this space. The Jakamo team is unusually curious, ambitious and productive, so we should expect the company to evolve and grow quickly.”
Jakamo’s employees are distributed in Seinäjoki, Vaasa, Tampere and Helsinki, so few common yearly face-to-face hangouts are really important for the team (Mickos in the front).
As Jakamo makes shared information available, visible and manageable through their platform – it aims to something else than creating never ending e-mail loops or company specific portals. Their goal is to make sharing information across companies is easy, fast and secure enabling cross company teams to work together in real-time.
I was actually working few years ago in manufacturing business, and I remember still it quite well how it was sometimes pretty hard to get information from your suppliers to keep up with your own customers. When there’s quite a few massive players working together for a common goal – I think this type of platform certainly has its place.
And when I even think about our team – which is in total less than ten people – we’ve learned that reaching openness needs good common practises no matter if we all sit around the same table. That’s why it’s pretty hard to imagine how big manufacturing companies could operate without a system created for communications.
Unless of course if you concentrate in doing your own thing – which doesn’t seem like a mindset that goes a long way?