Alar Kolk: All products and services will get kitted out in digital garb

02.03.2016 - 14:00

Digitisation is inescapable for companies to be able to stay competitive and grow, observed Alar Kolk, President of the European Innovation Academy, at the SEB Innovation Lab held in Tallinn today.

According to Kolk, companies have three options available to benefit from digitisation: digitise internal processes at the company, digitise the customer’s touch points with the product or service, or digitise the entire business model. In other words, kit the product or service out in digital garb.

In terms of process digitisation, the key issue is mapping the correct process in order to create the greatest difference compared to one’s competitors and generate the most benefits. “The digitisation of a process needed by companies within the same industry also makes it possible to provide it as a service to other companies. For example, the Finnish company ENEVO installed stickers with sensors on its rubbish bins, thereby reducing the costs of emptying them by 50 per cent,” Kolk added.

Statistics indicate that 25 per cent of companies have very accurately mapped their customers’ touch points with the product or service provided by them. “Many companies understand that customer experience management is very important. How to make your customer’s interaction with your product or service even more convenient by digitising your customer’s experience? The pizza vendor Red Tomato Pizza discovered that 80 per cent of their customers always order the same pizza. They created a fridge magnet with Bluetooth to make it possible to order one’s favourite pizza at the press of a button. The company grew 500 per cent in just one month,” Kolk said.

“In Estonia, there are several successful companies that have come up with new digitised business models, providing their customers with a new experience. For instance, Avokaado, which you could call Estonia’s Uber, provides its clients with all its legal services on a monthly basis over the Internet. Another Estonian company, Sorry As A Service, sends the customers of its customers apologies on the latter’s behalf,” Kolk added.

“Digitisation has enabled companies to grow a lot and do so very quickly – this kind of growth is no longer measured in percentages but rather in multiples. The positive thing is that digitisation is fairly straightforward and cheap, and the company does not have to develop anything new itself but rather has to implement existing technologies to make its product/service or processes more streamlined and convenient. This places all companies, big and small alike, at the same starting line,” Kolk noted.

According to Kolk, several companies may switch fully to complete autonomy in the future. “At present, there are already several companies that are quite profitably harnessing artificial intelligence, having managed to fully digitise most of their processes, thereby significantly reducing their costs at the expense of, for example, their operating costs,” Kolk pointed out.

“Over the next few years, I also recommend keeping an eye on virtual reality, as this field is likely to grow 30 to 40 times over the next five years and involves technology that may be implemented in terms of customer experience,” Kolk added.

For a video feed from the Innovation Lab, go to: SEB Innovation Lab 2016

Pictured in the photograph: Presentation by Alar Kolk, at the Innovation Lab in Tallinn (photograph by: Egert Kamenik)