© Marko Luhtala 2018
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Digitalization – 9 practical roadblocks
on this must-have journey
May 2018
MARKO LUHTALA
Ajantasalla.fi

© Marko Luhtala 2018
My personal journey in digitalization
2
Early adopter
eBusiness director at Nokia, 1999–2002
Solution provider
Sales director/Enterprise solutions at Nokia, 2002–2005
User of digital technology
widely in commerce
Director/ VP of Retail at Nokia, 2006–2010
Solution provider, SaaS-entrepreneur
CEO at NearMe Services, 2010–2016
Advisor and implementer
Digitalization consultant at Ajantasalla, 2016–
MARKO LUHTALA
© Marko Luhtala 2018

© Marko Luhtala 2018
Digitalization is a difficult
concept because…
As a term it is: As a global megatrend it is:
Overhyped
Misunderstood
Forced upon all the time
Real
Present
Fundamental
3
by executives, consultants
and specialist.
for practically every business
and industry.

© Marko Luhtala 2018
Digitalization can create unique customer value
in 4 ways
4
MAKE YOUR PRODUCTS
AND SERVICES SMARTER
APPLY NEW DIGITAL
BUSINESS MODELS
1 2
SCALE YOUR SALES
AND OPERATIONS
3
TURN DATA INTO A
STRATEGIC ASSET
4

© Marko Luhtala 2018
But the path to a digital economy is paved with
9 practical roadblocks
5
Based on the work with a dozen companies in 2017–2018
HOW TO GET STARTED
1 2 3 4 5 6 7 8 9
HOW TO FIND THE RIGHT
DIRECTION
HOW TO SECURE THE
RESULTS

© Marko Luhtala 2018
Roadblocks in
getting started

© Marko Luhtala 2018
1. There is no common agreement in the top
management
7
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
In only 1 out of 9 companies
the chairman and CEO had a
common strategic view on
digitalization
Survey question
What is the magnitude of change digitalization causes to your company?
It is very difficult to
steer the ship in
multiple directions

© Marko Luhtala 2018
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
2. Lack of understanding
blurs the benefits
8
versus
Companies that mentioned lack of digitalization skills as a bottleneck
also reported unclear customer benefits as a major digitalization challenge
– and visa versa
Digitalization
understanding
exists
Positive results,
continuous learning
Benefits of
digitalization
are clear
Sufficient
investments in
digitalization
Lack of
digitalization
understanding
Benefits of
digitalization are
unclear
Little or no
investments in
digitalization
No results,
no learnings

© Marko Luhtala 2018
3. Digitalization is considered a separate strategy
9
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
Digitalization is a modern toolbox for executives
to implement more competitive strategies
Yet, 40% of executives said
they don’t invest in digitalization
because they are too busy with
implementing other strategies.

© Marko Luhtala 2018
Roadblocks in
finding the right direction

© Marko Luhtala 2018
4. Hunting too high or low for use cases
11
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
Since digitalization can be anything and everything,
it is often hyped or downplayed by companies
An eager but digitally uneducated management team can easily invent
a bucket-full of ideas that have no customer value or business case
”Our digitalization
plan is to upgrade CRM and
buy iPads for our salespeople”
”We need a platform
strategy and AI
solution”

© Marko Luhtala 2018
Executives face a big
pressure to cut the
digitalization budget
proposals
”Old business”
complains that
”new business” is
eating their EBITA
Digitalization requires new
kind of investments in
software, skills and external
services that take time to
pay back
5. Sufficient investments are difficult
to approve
12
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS

© Marko Luhtala 2018
6. Will exceeds the skills
13
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
Successful transition to the digital economy
requires a solid vision and systematic execution
Great ideas are
of little value without
implementation skills and
resources
Too many digitalization
projects end up as expensive
pilots

© Marko Luhtala 2018
Roadblocks in
securing the results

© Marko Luhtala 2018
• An internally focused exercise
• ”Outsourced” to the IT-department
• Viewed as a cost rather than an
investment
• A project that delivers little customer value
and no changes to the leadership
practices
7. Digitalization is seen as
an IT-project
15
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
“Digitalization is
a fancy name for
an IT-project!”
THIS EASILY LEADS TO
DIGITALIZATION BEING:
>40% OF 29 EXECUTIVES
STATED THAT:

© Marko Luhtala 2018
8. Selling new digital offering
proves challenging
16
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
Packaging new services
into an offering that is easy
to sell and buy
Deciding upon the pricing model and
level when there is no clear
production cost
Getting your sales people
out of the comfort zone to
sell the new services
Many companies aim at creating
new services based on digitalization
YOU MAY FIND THE FOLLOWING 3 AREAS MORE
DIFFICULT THAN EXPECTED:
1 – OFFERING 2 – PRICING MODEL 3 – MOTIVATION

© Marko Luhtala 2018
9. Data is stored – not used
17
GET STARTED
1 2 3 4 5 6 7 8 9
DIRECTION RESULTS
What is the quality of
your data storages?
Have you listed the
Big Questions you want to answer
with data?
Does business analytics mean Excel
and a rear-view mirror in your
company?
Yet, data is the
cornerstone in VALUE
CREATION and
DECISION MAKING in the
digital economy
According to studies,
companies ANALYSE
ONLY 0,5% OF THE
DATA they collect and
store

© Marko Luhtala 2018
A company’s readiness
for digitalization depends
on 4 areas
Conclusion:

© Marko Luhtala 2018
Are you ready for the digital economy?
19
Clear and attractive
Realistic roadmap
Vision for the
digital
economy?
Company
culture?
Digital experience
Understanding digital tasks and
roles
Network of digitally
savvy partners
Availability and quality of data
Status of backend systems
e.g. ERP, CRM
Size of the ICT team and investments
Competences?
ICT
infrastructure?
Invests in what’s new
Encourages trial and error
Agile and fact-based decision
making

© Marko Luhtala 2018
Final takeaway: What is digitalization
in practice?
20
BUILDING GROWTH AND COMPETITIVE EDGE
WITH DIGITAL TECHNOLOGY
CEO’s modern toolbox for better strategies and more efficient execution
Leadership challenge, not a technology problem
A transition to the digital economy, not an IT-project
Industries are transforming, companies must follow

© Marko Luhtala 2018
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© Marko Luhtala 2018
ADVISOR, CONSULTANT
marko.luhtala@ajantasalla.fi
+358-50-3879903
www.ajantasalla.fi
MARKO LUHTALA
I HELP COMPANIES WIN IN THE DIGITAL
ECONOMY