THE FUTURE OF DATA Copyright © Anil Agarwal, Ivar Aune, Raghava Rao Mukkamala, Rickard Sandberg et al. 2023 Design: Mia Fallby, m-Dsign.com Published by Kunskapshuset Förlag, Helsingborg, Sweden, 2023 www.kunskapshusetforlag.se Kunskapshuset Förlag (The Knowledge Publishers International) is part of Hoi Publishing. Printed and bound in Bosnia and Hercegovina by GPS Group, 2023 ISBN 978-91-89547-04-9
HOW NORDIC COMPANIES SCALE AND TRANSFORM WITH DATA AND AI
AUTHORS Stockholm School of Economics Rickard Sandberg Copenhagen Business School Raghava Rao Mukkamala Capgemini Anil Agarwal Ivar Aune Magnus Carlsson Samay Mir Roosa Säntti Thomas Svahn Caroline Wilhelmsen
CONTENTS THE FUTURE OF DATA – HOW NORDIC COMPANIES SCALE AND TRANSFORM WITH DATA AND AI FOREWORD by Anil Agarwal and Rickard Sandberg . . . . . . . . . . . . . . .
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PART I WHY MAKE A 10-YEAR PLAN FOR DATA MASTERY? CHAPTER 1 Why data is so important today and will be even more so in the coming years . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW FORTUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 2 The 10-year perspective – looking back on the last 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW SECURITAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 3 Data and innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . FACT BOX Where does innovation in data and analytics come from? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW NORTHVOLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW SCANIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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PART II THE STATE OF DATA AND ADVICE ON HOW TO BECOME A DATA MASTER The state of data globally . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 5 The state of data in the Nordics – emerging companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW WIRELESSCAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 4
CHAPTER 6 The state of data in the Nordics – established companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW NESTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW SINCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 7 Sustainability driven by data – an excellent opportunity for the Nordics . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 8 How to become a data master . . . . . . . . . . . . . . . . . . FACT BOX How to become a data master . . . . . . . . . . . . . . . . . . . . FACT BOX What is a data master? . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW TELIA DIVISION X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 9 Recommendations for data non-masters: A roadmap towards data mastery . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 10
Four best practices for data non-masters . . . . . . . . . .
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INTERVIEW THE LEGO GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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PART III FORWARD-LOOKING ADVICE: WHAT TO EXPECT IN THE FUTURE CHAPTER 11 The 10-year perspective – what about the future? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW ESSITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 12 What will the data masters of the future look like? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTERVIEW TELENOR NORWAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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CHAPTER 13 The leaders of 2033 . . . . . . . . . . . . . . . . . . . . . . . . . . FACT BOX A toolbox to help you create your own 10-year plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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FOREWORD BY ANIL AGARWAL
Nordic data masters’ recipe for success and our recommendations for non-masters, including a roadmap to achieve mastery
F O R E WO R D
When I first came up with the idea of creating this book, it was with a clear realization in mind: There are no books from the Nordics addressing the big trend shift we are seeing in the market towards data. Most books are either American or Asian and have a completely different market perspective to what we see in Europe. This leaves executives with very little advice on how to handle the dynamism that is present in our part of the world. Nordics consistently rank at the top of various global indexes, including those for competitiveness, entrepreneurship and innovation. At the same time, we know that scaling up and converting innovations into steady revenue streams is difficult for Nordic companies. The market consists of many small and highly innovative players who often have one strong idea to drive their companies forward. The number of unicorns (firms with a one-billion-dollar valuation) vs. the number of smaller companies shows a big gap (approx. 1 to 100,000), and small, micro and nano-cap funds dominate the Nordics, particularly in Sweden.1 There are very few companies who are truly able to scale. I hope the data strategies in this book will enable these entre preneurs to take their ideas to the next level. When building the story for this book, we wanted to highlight why data is important by looking at the state of data globally using clear matrices outlining the key positions of the industries worldwide, and then compare this to the Nordic industries. 1 Citywire Selector.
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A lot of time was spent on interviews with Nordic companies that are masters of data. We have highlighted our reflection on what differentiates these data masters from others, as well as what constitutes their recipe for success. We have also given our recommendations for non-masters, including a roadmap to achieve mastery. With a focus on the future, we asked each of the companies to provide their insights. Combining this with our own research and the trends currently in the market, we predict what the data master of the future (10 years down the road) will look like. Finally, we focused on what data masters of today need to do, to be data masters of tomorrow. If there is one common denominator between the current needs of the companies interviewed and our prediction for the future, it is that better structure is needed in the data and analytics initiatives. Some of the companies also quote AI (artificial intelligence) as an area that will receive significant investments. In the automotive sector, the focus is on self-diagnosing, self-adjusting and automated analytics but also on how data will be used to improve the overall surrounding ecosystems and consequently society as a whole. The data platforms and the ability of vehicles to give complete data representations of themselves are already in place. Ten years from now, the services that utilize all these new capabilities will also be operational and drive a significantly more intelligent transportation system. Some of the bigger companies and their suppliers need to decide whether to be industrial players, give control of their databased future to the MANGAM (Meta, Amazon, Netflix, Google, Apple and Microsoft), invest in startups or become software companies. While business models are becoming clearer, the rapid expansion of ecosystems in data will also provide
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F O R E WO R D
significant possibilities to build new business on the capabilities of others. Hence, it is essential to have strategic clarity on which parts of the value chain to own inhouse and what to leverage from the ecosystems. The strategic clarity of the future data masters will be owned by top management and clearly communicated to all relevant stakeholders. And then there is the question of the metaverse. With the massive amounts of know-how and capital being deployed into this highly data-driven domain, there will likely be clear effects ten years from now. We have provided our thoughts and observations on the same. This train is leaving the station now, and it is up to business leaders whether to be on it along with the MANGAM (Meta, Amazon, Netflix, Google, Apple, and Microsoft) companies of the world. Overall, society will likely be positively influenced by more customer-focused companies who use both external and internal data, better end-to-end views, and “guaranteed green” services and products. These topics are being worked upon in the Nordics already today, but it will take time for the effects to be fully felt by the consumers. Many companies believe we will have made significant leaps in 10 years, and there are plenty of bright minds in the Nordics to support such a view. The ambition with this book is to contribute to helping Nordic companies to be prepared for the future. And the future will be data-driven!
Enjoy the reading!
Anil Agarwal
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F O R E WO R D
REMARKS AND TAKEAWAYS BY RICKARD SANDBERG
Hypercompetitive business environments in a world of uncertainty – with the aftermath of COVID-19 and the war in Ukraine – are some of the challenges today’s companies face. Without doubt, this makes planning and decision-making utterly complex and causes “C-suite gray hair”, anxiety and other concerns. At the same time, there is a Cambrian explosion of all types of data – structured and unstructured – coming from first, second and third parties whose value is just waiting to be unlocked. Being a data master today and in the future will offer significant competitive advantages. Agility via data-driven decision-making enables companies to change direction quickly because they know earlier when they are wrong: Fail Fast, Learn Faster (as suggested by Randy Bean in his book with the same name). From a Nordic perspective, we see that many companies are lagging when it comes to data maturity. This adversely affects businesses, and they are becoming less competitive in domestic and international markets. Many companies have some degree of data maturity but are still very much on a journey to becoming data masters. In extreme cases, companies face bankruptcy risks for not using data and technologies such as AI. With these concerns in mind, one of the purposes of this book is to inspire companies to become data masters. Now, you might be thinking: What is a data master, and how can my
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organization become one? At a broader level, we think of data masters as companies that possess the right “data foundations” – the tools and technologies to utilize data effectively – and possess the right “data behaviors” – i.e. the people, processes, skills and culture to keep the company on the right path. What is important to notice here is that data masters have the necessary tools and technologies to harness and leverage data, as well as data behaviors that are part of their DNA. The ideas of the right data foundations and behaviors are extensively illustrated in the book through the interview material from our Nordic data master companies. Having defined what a data master is, we also wanted to have a more refined discussion on some of the best practices of data masters and offer a roadmap to data mastery. In these discussions, we go into more detail about the following four practices: 1.
Engender a Data Strategy and Align it with Business Goals
2.
Engender Trust in Data
3.
Engender a Modern Data Landscape
4. Engender Activated Data and Data-Driven Decision-Making While 1. focuses on creating a data-driven strategy driven by the overall business goal, 2. bridges the data-trust gap by establishing trusted AI guidelines and data democratization. Moreover, 3. focuses on revamping the data landscape of organizations, and 4. concentrates on fostering a data-powered culture across all levels.
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F O R E WO R D
“In God we trust. All others bring data.” W. Edwards Deming, Engineer and Statistician
It has been a true pleasure, while writing this book, to get the Nordic companies’ viewpoints on how they define data mastery and their thoughts about it. These interviews have helped us to not only refine our discussion on data mastery, but also to shed light on the process of scaling and transforming with data and AI, becoming a data master, and how to stay one. Wishing you an inspiring read about data mastery. Let the data journey begin!
Rickard Sandberg
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PART I Why make a 10-year plan for data mastery?
CHAPTER 1
Why data is important today and will be even more so in the coming years
PA R T I — C H A P T E R 1
Are you ready to make the necessary investments and truly strive to become data-driven? Many companies say they want to, but it takes time, commitment, money and not least priority from top management to achieve it. For those who make the effort, the rewards are just around the corner. “… Data has become ubiquitous. By disrupting established
practices, data is transforming how organizations operate …”
“… Business using data will see US $ 480 billion in productivity benefits over competitors not using data by 2022 …” International Institute for Analytics
Today’s business environment is both more competitive and more uncertain than ever. Traditional organizations are constantly challenged by more digitally mature ones that are permeated by a data-driven culture. Put simply, they have data in their DNA, letting them, almost to perfection, realize and monetize the value of data and leverage data-powered insights at scale to outperform their competitors. Imagine the concept of the Smart City, powered by the data connections between different interests: services, society, private businesses and citizens.
At the same time, organizations face a multitude of other challenges in an ever-changing world, with extreme events and shocks – including environmental and societal challenges,
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global-health issues (COVID-19 being the most recent one) and war (Ukraine, ongoing at the time of writing) – causing disruptive environments and a great deal of uncertainty. Naturally, this has heightened organizations’ need for forwardlooking, real-time insights and scenario modeling (such as pandemic or war modeling), all enabled and facilitated by looking more towards data – along with sophisticated analytics and smart technologies such as AI – to fine-tune their strategic and tactical responses. The ability to utilize all the strategic data in an organization can potentially mean a huge competitive advantage. Being able to combine different kinds of data (internal, external, research) can give an organization that edge that they so eagerly pursue.
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PA R T I — C H A P T E R 1
The vast amount of data Most organizations today are facing vast amounts of data. In fact, we see a Cambrian explosion of data (that is to say, it is comparable to the unparalleled emergence of organisms between 541 million and approximately 530 million years ago at the beginning of the Cambrian Period), and every day the world produces 5 exabytes of data (a number with 18 zeros). It is expected to reach some 85 zettabytes (21 zeros!) this year. According to the World Economic Forum, by 2025, the amount of data produced per day will be 463 exabytes. To provide a comparison, in 2009, the world’s entire digital storage capacity was 487 exabytes. According to current standards, that volume can be filled up in just two days. However, the sheer volume of data in our hands today in no way translates into equivalent levels of actionable and credible insights. This is a problem as data has never been more critical, and its amount grows rapidly over time.
The potential of data “Data is the new oil” is a catchphrase that you may have heard being bandied about. It refers to the fact that data and information is now an even more valuable asset than oil. However, the idea that “data is more like sunshine than oil”, as stated by Google’s CFO at the World Economic Forum in 2021, might be more accurate. The underlying meaning is that we can keep using it and it will keep regenerating insights. Like the old oil oligarchs and directors who came before them, Silicon Valley giants like Facebook, Google, Microsoft and Amazon have
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INCLUDES
EXCLUSIVE
INTERVIEWS WITH 11 NORDIC COMPANIES
A tectonic shift is coming. Are you ready? Companies that have control of their data foundations and data behaviors will be the future data masters. In the coming years, new tools and technologies will drive the foundation to use and leverage data. Processes, skills, people, and culture will be a part of every successful company’s DNA. The metaverse, 5G and web3 will drive much of the developments. In this book we reflect on what differentiates data masters from others. We also present a hands-on roadmap to mastery for non-masters (or laggards, as we call them). In in-depth interviews, 11 Nordic companies reveal their insights about data and AI. Combining this with research from Capgemini, Stockholm School of Economics and Copenhagen Business School, we predict what the data masters of the future – 10 years from now – will look like. Are you ready to make the necessary efforts and investments to become truly data driven? Then this book is for you. The rewards are waiting around the corner.
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