The money is in the data not the steel

In turbulent times it is not viable to just carry on as before. Businesses need to innovate continually, and the new way forward for some is to become more service-oriented.

(illustration: James Fryer)
(illustration: James Fryer)

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That is not to say that services are not already big players on the world stage. In fact, in most of the developed economies, more than 70% of the working population is employed in services. But the inexorable drive towards service provision has seen even traditional manufacturers adding services to their output, as they recognise the potential economic and strategic benefits.

So how does this apply to wind power? As Lars Christensen, vice-president of Vestas' wind and site competence centre, puts it, by exploiting "big data"

- the technology term for large, complex data sets - it is possible to improve service to customers. He believes the business is not just about making wind turbines, but about bringing some certainty and reliability into wind power, which is, after all, a volatile energy source. Vestas spent 12 years gathering wind-flow data from weather stations around the world. Using its wind energy research and development centre in Denmark, it created a comprehensive wind flow model, and now provides visual wind-flow maps year by year, and even hourly in some cases, to ensure that turbines are situated in the right place and, therefore, working at maximum efficiency.

By combining its core expertise with the power of big data, Vestas broadened its business to include a consultancy service that adds value to customers, generates a new source of revenue and heightens its reputation for expertise. While the wind turbine itself is becoming a commodity, the value of Vestas' knowledge and expertise, coupled with powerful data, is creating value for the business and its customers.

Customers are interested in the return on investment (ROI), not the detail behind the plant. This meant Vestas had to bridge the gap between the input from climate, wind and temperature, through rigorous analyses, to the ROI. A key factor was to keep it simple; the data is complex and it has to be given to customers in a userfriendly way, otherwise they won't use it. They need to be able to enter queries and find results quickly and easily.

With so much data around, though, it's possible to get bogged down. We now generate in two days the same amount of data that once took 500 years. It's a staggering amount, measured in exabytes, or quintillions. So the real and relevant data becomes a bit like a needle in a haystack and you can lose sight of what you actually need to exploit to make an impact on your business.

Even when you know what data you need, finding it can be a challenge. Data sharing is not a common pursuit in organisations that are focused on products rather than services. While they may be resistant to allowing external access to their information, they will have to change their mindset if they are to become more service-oriented. These are not one-off transactions - they will need to work more closely and collaboratively with customers. In the shift towards services, they may need a different skill-set within their workforce. The timescales are longer and tensions can arise in organisations between product and service groups.

Our experience has shown that some companies with a strong engineering and technology culture still want to pigeonhole services as "soft and fluffy". But service is what customers value. They are not buying the product, they are buying the outcome. Giving services equal status requires significant and sustained leadership and educational effort. As Lars Christensen puts it: "The money is no longer in the steel, it's in the data."

Professor Andy Neely is director of the Cambridge Service Alliance, a global business and academic partnership focused on understanding and developing service systems.

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