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Digitalisation and the Digital Culture in the Maritime Industry – An Interview with Camille Egloff

Shipping’s digital transformation has been hanging over the industry for years now, and many have started to talk about the sector’s digital revolution last year. The adoption of technologies like robotics and connectivity are starting to show results, while key industry players are collaborating with technology firms to create value in these new digital advances.

One of the most popular ventures in the news is the Maersk-IBM joint venture which is researching the applications of blockchain to improve global trade and digitise supply chains.

"This new company marks a milestone in our strategic efforts to drive the digitization of global trade. The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit," said Vincent Clerc, chief commercial officer at Maersk.

"Digital is the only way forward."

However, there is more to digitisation than just using a tool to replace one process with another. In our personal lives, the internet, mobile technologies, and online communities have reshaped the way we live significantly, which is key to their permanence. So for technologies like robotics, connectivity, and machine learning to stick, organisations need to be able to develop a digital culture that supports digital transformation.

“Without a cultural or mindset shift towards technology, promoting the value and use of new digital tools to employees will likely create conflict rather than innovation”, business writer Valerie Bolden-Barrett writes in HR Dive.

To find out how to drive and sustain the digital change in the maritime industry successfully, we’ve asked Camille Egloff, a Senior Partner & Managing Director at The Boston Consulting Group and the Global Leader of their Transportation and Logistics Sector. Egloff has been advising various organisations in the shipping sector, across segments and geographies, and she supported them in growth, performance management, organizational change and many more endeavours, including digitisation.

How does an organisation need to change to embrace digitalisation?

“The element of a digital-ready culture is very important in the speed at which the shipping industry is embracing the digital revolution, because it means that a business is ready and able to attract the right talents to develop the digital agenda and manage, encourage, and promote innovation.

"Digital is all about getting started, providing opportunities to many ideas and trials."

In most companies, digital acceleration comes as a top-down ambition, directly from the Board or the CEO. However, in order to succeed, you really need to create a new mindset within the company to accept and lead the digital changes. A company also needs to be appealing and attract new talents that will bring the skills necessary to develop digital solutions. For traditional industries like shipping, it is more difficult to attract the right profiles and the right capabilities, who are the ones that drive culture at the end of the day.

A digital culture needs to be nurtured from the inside, but at the same time, you need to bring in new capabilities and new ways of working, like people who understand what developing a new venture takes or what advanced analytics is, and can apply data science to develop solutions systems.

You also need an agile way of working, which is very different from the traditional way that a company works. ‘Agile’ means you have very short cycles of 1-2 weeks to develop new ideas and new products. These developments don’t have to be perfect, but you always need to get back on your feet and go back to the drawing table to improve it or change it or abandon it and move on to the next idea. An agile way of working is absolutely essential to the success of digitisation in a company.

But to attract people and to keep people like that in the industry is very challenging for a shipping company because when you look at the under 30s, the best ones from the best universities, they dream about tech companies like Google, Alibaba, Amazon. Traditional industries, in general, also face the same issue, not just shipping. For example, take the Renault-Nissan Group, a leading global car manufacturer; they faced a very similar challenge. Their solution was that they founded a company outside of Renault to incubate and scale-up digital products and solutions in an environment that’s different from theirs; now they have hundreds of digital talents working towards developing Renault-Nissan’s ambitious digital agenda.

"Digital offers so many opportunities. It’s about getting started with the right priorities."

In shipping, I see some signs of this with Maersk, who is speaking a lot about its digital agenda and all those digital capabilities. They are strongly pushing their digital agenda which will help to brand themselves as a digital company, and that is going to help them attract the right people. CMA CGM is also very determined to develop digital internally, investing in Advanced Analytics while also partnering with outside ventures and developing a digital lab. Then you have tech-enhanced companies like Flexport, based in the Digital capital of the world, San Francisco, which brings a state-of-the-art solution developed by the most advanced digital talents in the sector. Eventually, even in more classic shipping clusters, you can find companies like Signal Maritime, a smaller Greek commercial ship manager, who counts on a tech-savvy staff of mathematicians, scientists and coders blended with deep shipping expertise; they have been investing boldly into developing super advanced systems and solutions and seem to be emerging ahead with some of the most promising solutions in the entire industry.

So you can see that the big giants like Maersk and CMA CGM have the scale, the assets and the financial means to invest boldly and are making progress on their digital agenda, while some smaller and newer companies might be, by essence, more agile and digital minded, and able to make big progress fast. It will be interesting to see how the various players can partner together to accelerate their digital agenda.”

What does a digital culture look like in shipping? What are the traits?

“Digital culture in shipping is really multifaceted, because a shipping organisation is multifaceted. If you look at the container world, which is the most complex of them all because it involves so many people, it spans from commercials in agencies, line managers and pricers to technical superintendents and seafarers. Additionally, people are spread geographically across head office, regional offices, and agencies. To qualify your organisation as having a digital culture, the culture you build has to be multifaceted, because it’s different to be digital on board or on shore.

"The biggest mistake is the belief that you can embrace digital without fundamentally changing the culture. But that doesn’t happen overnight. It’s a process that needs to start with some lighthouse projects or successes."

On board, to be digital, your vessel needs to be connected to shore with systems to aid navigation and other decision making, while having more contact with the shore. Many talk about autonomous unmanned vessels, but my view is that the time is more for fully connected vessels where the shore-sea collaboration allows for aided-sailing on the base of advanced systems for routing and technical maintenance.

On the side of shore operations, fleet centres already offer a “Star Trek” vision with large screens everywhere to see clear piloting and monitoring of vessels, making sure everything runs perfectly. What’s often missing though are the Advanced Analytics capabilities to leverage the available data and improve the vessels’ performance.

On the commercial front, “next generation sales” with tech-enhanced solutions are yet to be adopted by line managers, pricers, and commercial agents in the field. Bookings online are now part of the liners’ reality but beyond that, multiple solutions already leveraged in other transportation or relevant B2B industries could really change the liners commercial performance. Container companies need to reinvent themselves – digititalise their sales process, respond faster with quotes and pricing, and reduce paperwork. We are not there yet. And if you look at the companies that are actually gaining market share, those are the companies that offer tech-enhanced booking solutions.”

In 2018, what sort of developments and improvements can we look forward to in terms of digitalisation?

Recent BCG research shows that the sum of investments from venture capital into shipping and logistics, specifically into new technology ventures, totalled $3.3 billion in the last six years. But when looking beyond digital players, the investment from venture capital is even higher and reaches $3 billion a year.

This shows that digital is the only way forward. There is only going to be acceleration. I think that companies who have not yet embraced digital will come to it, and the ones who already started will accelerate and start to get the benefits. I think some developments will be visible for the customer, so there will be progress on the front-end, but there will also be progress in the back-end, not necessarily visible for customers, like shared service centres with artificial intelligence, robotics, etc.

I believe in the potential of blockchain in logistics and shipping, which is for now a big buzzword and the benefits are still difficult to grasp; but I think it is really suited to shipping, in particular container shipping. Not just for the tracking of boxes, but also for payments and electronic bill of lading because blockchain offers secure transactions.

I think these are some of the elements we could look forward to in 2018.”

What is your advice for those maritime businesses who are looking to digitise but haven’t started yet?

“At first it can be daunting but once you are familiar with it… Digital offers so many opportunities. It’s about getting started with the right priorities, and not trying to do it all at once, but rather select 2-3 areas that you want to start with. It may be pricing, next generation sales, customer services areas, shared services centres or predictive maintenance… Pick one, and start building use cases and start bringing in new capabilities.

I think the biggest mistake is the belief that you can embrace digital without fundamentally changing the culture. But that doesn’t happen overnight. It’s a process that needs to start with some lighthouse projects or successes. In the beginning, you can leverage external help but soon enough and very fast you absolutely need to invest boldly in building your internal capabilities. You can develop SWAT teams that bring the right set of capabilities in Advanced Analytics, in Machine Learning, and work in an agile fashion. You create your digital lab. It might start small but you have this agile environment where you can attract people who will provide the right knowledge to develop new digital solutions and ventures.

Don’t be daunted by the ‘perfect solution’. Digital is all about getting started, providing opportunities to many ideas and trials: accept to change course when a solution is not working and scale fast when the pilots are successful.”

Discuss collaboration in the maritime industry face to face at Shipping2030 Asia.

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