Leading Maritime Industry Forward Digital Transformation

By Uttam Kumar | Roll Number 5461 | Class of 2004

The maritime industry is undergoing a rapid transformation due to technological advancements and the increased complexity of rules and regulations. There is a clear advantage for early-adopter companies that can take bold steps and drive the industry forward. The leading shipping companies need to rethink their businesses by taking a customer-centric approach, driving product innovation, and generating customer value.

Digital technology like industrial IoT, cloud computing, advanced analytics, artificial intelligence, blockchain, and AR/VR are no longer buzzwords in the maritime context. Instead, these technologies drive remote monitoring and operations, enhance operational efficiency, increase profitability, reduce carbon emissions, and enhance safety on board ships.

However, technology alone cannot solve these problems or create new opportunities. Instead, digital technology will require a journey called “digital transformation,” which would include redefining and automating business processes, people management, and data-driven decision-making.

Companies can envision themselves as digital leaders and create significant value for their customers through digital transformation.

Terrains for Change - Threats and Opportunities

Change is a powerful force, and as the Greek philosopher Heraclitus once remarked, “the only constant in life.” Businesses must use these opportunities to help the shipping industry achieve a better future. The biggest demon, though, is their history, pride, and perhaps rigidity in the idea that “We have always done it this way.” Companies must get rid of their rigidity in this disruptive environment and adopt a growth mindset while utilizing their domain expertise. Only then will they be able to realize their vision and establish themselves as customer champions.

There are many opportunities and challenges for shipping companies in this era of digital disruption. Some of them are highlighted in the table below.

Maritime Technology and Various Applications

The advancement of technology and data generation requires powerful applications that can solve critical industry problems. Some are listed below but are not limited to the list: a. IoT-based remote monitoring and operations b. AI-based Predictive Maintenance c. Big data-enabled Voyage Optimization d. Blockchain-based asset tracking e. Metaverse-based training and marketing f. IoT-based inventory management and procurement g. Intelligent chatbot for improved customer experience and service h. Automated document management system

However, their value realization will only be possible with an effective digital transformation.

Leading Digital Transformation

Digitization, digitalization, and digital transformation are key concepts discussed in every conference, meeting room, and practice across companies. However, people need clarification about their exact meanings, and they are often used interchangeably.

While digitization and digitalization are more about technology, digital transformation is about generating customer value.

To achieve technological success, every shipping company must consider digital transformation as a long-term investment and a journey that will require changes in business processes, people management, and data-driven decision-making.

While digitization and digitalization are more about technology, digital transformation is about generating customer value.

Major Threats Opportunities

• Data-driven decision making

• People mindset

• Cultural change

• Digital products efficacy

• Solution implementation

• Proof of business case

• Political motive/agenda

• Change in regulation

• Disruptive technology

• Competitive landscape

• Global political environment

• Monetization of data and services

• Transparent operation

• Problem-solving using technologies

• Operations efficiency

• Improved safety

• Improved regulations and commercial compliance

• New product innovation and services

• Establish as a thought leader

• Global expansion

To achieve technological success, every shipping company must consider digital transformation as a long-term investment and a journey that will require changes in business processes, people management, and data-driven decision-making.

Digital transformation will need:

• Transformation of the current operating model of ship operation across its value chain.

• Change in people’s mindsets, digital engagement, and adoption.

• Introduction of new functions, business process revamps, and changes in job descriptions.

We see four key challenges that must be addressed across various functions and strategy execution to succeed in the digital transformation journey: the decision challenge, the change challenge, the political challenge, and the cultural challenge. Let’s examine each of these challenges in depth.

Decision Challenge

In this knowledge economy, it’s imperative for companies to move away from hierarchical modes of decision-making to a more cohesive approach through practical guidance and facilitation.

Prof. van der Heyden developed and proposed the Fair Process Leadership (FPL) methodology to help organizations make critical decisions by engaging the participants in these uncertain times. The FPL methodology comprises five stages and, if successfully implemented, can generate trust, lead to effective collaboration and collective commitment, and drive team and organizational performance.

Prof. Heyden explained these five stages as below:

• Engage: Stay with the problem more with stakeholders

• Explore: Seek new and disruptive ideas

• Decide and Explain: Make fair decision but explain trade-offs

• Execute: ensure execution excellence

• Learn: retrospective - celebrate, feedback, and correct course of action

Any company considering digitalization opportunities should involve stakeholders early and agree on the critical problems. Additionally, brainstorming is crucial, and the group should explore unconventional suggestions and make fair decisions. Finally, establishing clear roles, responsibilities, support, and success metrics is vital during execution.

Driving change on a large scale requires both strategic planning and tactical execution, particularly in a complex shipping value chain. According to research, there are ten foundations that can act as a guiding light for any business and drive effective change management in any organization.

Digital Transformation

In order to drive successful change management

• It’s critical to have a crystal-clear vision and an emotional narrative to connect to the people.

• Building a growing set of coalitions between business and IT is key to scaling up the transformation and ensuring success.

• Adopt a top-down approach for institutionalizing the vision across all stakeholders, both internal and external. It’s better to over-communicate than under-communicate, ensure addressing their hidden concerns are addressed.

• Top-class execution is critical: ensure regular checkins and follow-ups and establish a project plan with a roadmap and milestones.

• Bringing consistency in communication, behaviors, and action is also super critical.

• Celebrate small wins, highlight success, and make a splash in the big event.

• Resilience and being contagious through passion and integrity are vital to bringing people together.

Political Challenge

Driving change management is crucial for success, but advancing digital transformation in an organization also requires dealing with political issues through networks and influence. Organizational politics is a part of any company. It involves a group of allies who can use relationships and influence skills to scale the digital transformation up to a company-wide operation.

There are many pillars of a political challenge, including soft power, political currency, influencing tactics, and networking, which further enable the development of allies in order to thrive in the business environment.

Establishing a digital champion is one strategy for overcoming the political challenge in an organization during digital transformation. The digital champion must be a driven, passionate, and competent leader with a solid reputation to influence stakeholders both vertically and horizontally.