Strategy, users, collaboration and data: a new path to maritime digital transformation
90POE’s first official presence at Posidonia in June was a great success. The annual event is the place to be for anyone in the shipping industry. It brings thousands of professionals to the Metropolitan Expo in Spata, Greece, the spiritual home of the industry – and the headquarters of some five thousand shipping companies, including many of the most prominent owners, managers and service companies. More shipping capacity is managed from Greece than anywhere else, and Posidonia attracts other industry professionals from across Europe and beyond.
Naturally, we relished the opportunity to get ourselves and our products in front of so many potential customers. What was really valuable about being there, however, was the opportunity to meet colleagues from across the industry and to learn from them. We often hear that shipping is slow and behind when it comes to technology. I don’t subscribe to that opinion. In my experience, the industry is very shrewd. The technology they use today has worked well for their business. Today, though, new regulations and new requirements across the value chain are just starting to tip the balance, which means the need for newer technologies is increasing.
This was the context for the seminar we sponsored on achieving digital transformation across the industry. We asked a number of colleagues from leading companies in maritime and technology to discuss, ‘Eating the Elephant: digital transformation in maritime’. I learned a huge amount from them all, and enjoyed the opportunity to exchange notes on operating in such a dynamic sector within the industry.
“COVID has turbo charged digital transformation by more than half a decade – it has helped traditional thinkers recognise that this new technology works pretty well.”
The rising tide of digital solutions targeting the maritime industry has become extraordinary over the past five years. In only a very short period, owners have gone from selecting technology from a handful of providers to an almost constant flow of new technology providers knocking at their door. Barry Authers of the industry cloud platform Veracity by DNV told the seminar, “COVID has turbo charged digital transformation by more than half a decade – it has helped traditional thinkers recognise that this new technology works pretty well.” That chimed with our own experience of Covid, which was a bit of a learning curve. We assumed our clients’ priority would be access to systems. In fact, they wanted access to each other! Tools like Microsoft Teams rose in demand as businesses realised they needed to continue to talk to each other remotely.
Barry added that decarbonisation and sustainability are the biggest issues, with around 10,000 vessels globally submitting operational data to Veracity to demonstrate compliance. That’s a good example of technology meeting a clear need. Sadly, that’s not always how digital technology for shipping is talked about. Talk of ‘digital disruption’ has left many owners bewildered and concerned. Am I missing out and do I need to respond urgently? How do I select the right supplier? Will the investment in new technology return tangible value? How will it impact the current organisation?
In fact, digital disruption is a term being used by the tech industry to generate a fear factor. Businesses that are genuinely disrupted by digital are those where the core stages of the value chain can be fundamentally replaced by technology. Shipping is about moving physical goods from A to B, and it will remain as such. So, the industry is facing enhancements from digital, often called transformation, to improve safety, efficiency and transparency. But new tools and new technologies enable people to do the core business in a smarter way. The industry is not facing disruption.
“The goals are always about being more efficient, to save money and make less mistakes - Digital transformation for us is therefore about better decision making to achieve these goals.”
Representing the perspective of ship owners and operators on our panel, Elena Matzaridou of Dalex Shipping, shared this perspective: “The goals are always about being more efficient, to save money and make less mistakes,” she explained. “Digital transformation for us is therefore about better decision making to achieve these goals.”
That’s exactly right, and that’s how software vendors should be explaining the benefits we offer. We have a responsibility not to oversell our role in fulfilling the needs of the customer. Software alone will not achieve net zero or deliver decarbonisation, for example. It helps in identifying a baseline. It can help prioritise and optimise decisions and it can provide measurement of the outcomes, but the business itself needs to decide on how it will achieve such goals. Then they can select the right technology to help them.
At the same time, there is real pressure to achieve those goals. Our panel also included Karan Bhawinska from DTN, a trusted provider of operational intelligence and a global weather authority. He said, “We need to be clear on the value we bring. Regulation and the competitive market are driving the need, not the vendors.” All I would add is that it’s important to recognise the benefits are not always quantifiable in financial terms. My experience is that if you arbitrarily monetise the value of technology in the areas of safety or compliance, for example, no one trusts the business case. If it assists in supporting business decisions it cannot always be directly tied to the balance sheet, but that does not mean it is not providing real value.
There was also agreement on the panel that vendors have a responsibility to make the process as user-friendly as possible, which means putting a premium on compatibility between systems. Nikos Stefanis of Kongsberg Digital explained, “If we don’t collaborate then customers will face different solutions that can’t easily work together. They will have data in different and incompatible formats and their daily jobs will be disrupted rather than improved.” Barry from DNV was optimistic on this score, recalling that, “When the OEMs started launching platforms and DNV launched Veracity, some believed there would be a conflict of platforms. The reality is that the new technology landscape for maritime will be formed from many platforms all working together”.
The consensus was that few of the countless new entrants in tech for maritime will survive, but collectively they will transform the way the industry operates by bringing new and innovative approaches to the challenges it faces. I saw a similar cycle when I worked in oil and gas. Start-ups are creative and challenge the status quo. They can add real value, but out of 500 exploding onto the scene, maybe five or ten will really think about the challenges of the industry in a new and unique way. The most successful players will be those who understand the needs of end users and provide tangible benefits. Also on our panel, Leigh Steed-Middleton, VP of Product at SEDNA, suggested, “When the industry matures there will be a handful of services or platforms that bring that data together and bring the real benefits.”
“People whose daily jobs will be impacted by the new technologies need to be part of the review and evaluation. We need the new generation as well as the top-level management to be part of the decision-making process on technology.”
That will mean providing value in terms of shipping companies’ own strategy and goals. For Nikos and Kongsberg, that in turn means, “People whose daily jobs will be impacted by the new technologies need to be part of the review and evaluation. We need the new generation as well as the top-level management to be part of the decision-making process on technology.” He added that, “The risk is that many new technologies are looking to reduce human interaction, to automate and support remote working. In shipping it’s totally different, interaction and relationships are critical, you cannot succeed without having a good partner with you.”
I could not agree more. People should not think of adopting technology as just a matter of buying software. They are buying into a long-term relationship with a technology company that will work with them. That’s why my advice is never to find a technology that looks interesting and then find a fit for it within your business. Start with your business needs, and work with a partner who understands them. Both buyer and seller should make sure they have a partner they want to work with. It’s about an ongoing relationship. Echoing Nikos, I’d add that you can get sponsorship from the top, but the key is ownership by the end users.
A good relationship is critical because the strategy and needs of any business will evolve over time. Technology is flexible and can do many things, but if it is to be optimised for the changing needs of the business, it is essential that both parties understand those needs. So you don’t buy a piece of technology, switch it on and get value. It has to be embedded into the business and adapted to meet the way the business operates.
I’d go so far as to say maritime technology is entering a different paradigm. It used to be a large initial expense and thereafter the cost was minimised by ‘sweating’ the investment for many years. This meant suppliers struggled to maintain a revenue that was sufficient to maintain and evolve their technology into the future, leading to functionality gaps and security issues. The new SaaS paradigm means an ongoing subscription supports ongoing development of solutions. This means there is an ongoing investment in technology from both supplier and customer. It is down to the supplier to continue to prove added value to support the customers ongoing investment, which is why mutual understanding is so important.
The successful adoption of new technologies requires cooperative relationships, both between competing suppliers and between those suppliers and their customers
All six speakers on our panel agreed that the quality of data is key, but that data must also meet a clear business need. That means a well-defined digital strategy is essential to successful digital transformation. Perhaps the key message of our Posidonia session was that the successful adoption of new technologies requires cooperative relationships, both between competing suppliers and between those suppliers and their customers. It is never just a one-off transaction.
So ‘eating the elephant’ of digital transformation in shipping is less about splashing out on expensive new kit than establishing a mutually beneficial relationship with a suitable digital partner. To that end, it makes sense for everyone in the sector to maintain a dialogue, compare notes and begin to understand the different needs, strengths and weaknesses of the various players. Posidonia 2022 was a great opportunity to do just that, and my team and I are already looking forward to our next visit.
