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INTERNATIONALLY
SCALABLE
BUSINESS
FROM
DIGITALITY
2019
UNIVERSITY PARTNERS
// UNIVERSITY OF TURKU, TURKU SCHOOL
OF ECONOMICS (TSE) (COORDINATOR)
// LUT UNIVERSITY, SCHOOL OF BUSINESS
AND MANAGEMENT (LBM)
COMPANY PARTNERS
// CARINA SOLUTIONS OY
// EUROPLAN ENGINEERING OY
// SININEN POLKU OY
// WIIMA LOGISTICS OY
FINAL REPORT
// ELISA ARO
// TAINA ERIKSSON
// ANTERO HIRVENSALO
// AKI KOPONEN
// TOMMI RISSANEN
// LASSE TORKKELI
WE WISH TO THANK BUSINESS
FINLAND FOR FUNDING THE PROJECT
INTERNATIONALLY SCALABLE BUSINESS
FROM DIGITALITY – DIGIPRO.
WE WOULD ALSO LIKE TO ACKNOWLEDGE
THE ACTIVE AND FRUITFUL CONTRIBUTION
BY THE PARTICIPATING COMPANIES.
WRITERS
// EXECUTIVE SUMMARY
Digital transformation is occurring in all industries globally. Companies
develop processes and business operations to increase eectiveness, and
new business opportunities emerge as a result of the digital change. Similarly,
digitalization provides major opportunities for Finnish companies to improve
their international competitiveness.
DigiPro—internationally scalable business from digitality—is the joint project
of two research institutions and four Finnish small-to-medium enterprises
(SMEs) nanced by Business Finland (9/2016–12/2018). The project was
initiated based on the need of the participating companies to develop new
types of digital solutions for more eicient management of complex projects
and to commercialize the solutions for the international market. Therefore,
the joint objective of all partners in the project was to increase the knowledge
and capabilities of Finnish SMEs to develop internationally scalable business
models and to commercialize digital solutions internationally.
In this report, the focus is particularly on the current status of the digital
operational environments and changes taking place in the project industries in
Finland as well as on the role of digital solution developers that drive change
in these industries. Based on the research ndings and knowledge gained in
the project, the report presents implications for industry end-users and digital
solution developers as well as for policymakers and other stakeholders.
To eiciently manage large projects, industry ends-users need, for
instance, new ways of capitalizing on data and digital technologies
that involve several interfaces. However, the processes and operations
need to be improved rst in order for the digital transformation to
be truly eective in companies. Some project industry customers are
still unaware of the potential that digitalization can oer them, or
they are cautious about carrying out the deeper change process that
the digital transformation in business operations requires. However,
digital developers see the potential of digital development in a more
far-reaching way. Therefore, digital developers, on one hand, need to
have a deep understanding of customer needs, but on the other hand,
they need to be able to communicate the value added to the customer.
Furthermore, digital changes in the business environment oen lead to
changes in the business models of companies, which may turn out to
be a competitive advantage for the companies.
The digital shi requires investments and eort into the change
processes. Furthermore, successful digital transformation requires
interaction and joint actions between several stakeholders. It is not
only a question of companies, together, working with the challenges
and opportunities that digitalization produces but also a question
of collaboration between companies, research institutions, and
policymakers together nding new solutions in regard to industry needs.
// TABLE OF CONTENTS
1. INTRODUCTION 6
2. PROJECT OBJECTIVES 8
3. PROJECT PROCESS 11
4. RESULTS 14
Academic results 14
Business models 15
Perceptions of project management: Construction & maritime industries 17
Customer insight for new service development 23
Interviews with project customers 24
Project alliances 25
Internationalization 28
Company-specic results 31
Practical tools and processes 33
Business model development process 33
Project alliance partner selection 35
5. WHAT WE LEARNED ABOUT PARALLEL PROJECTS 37
6. CONCLUSIONS 40
REFERENCES 42
APPENDIX 1 43
INTERNATIONALLY
SCALABLE
BUSINESS
FROM
DIGITALITY
6
// INTRODUCTION
1
Industrial projects in, for instance infrastructure,
construction, or shipbuilding, are complex and long
undertakings. Project management plays a critical
role in the success of such projects. Digital tools
open novel possibilities for project management as
they enable data collection, use, and sharing better
than ever before. Hence digital solutions can be
an important factor in improving industrial mega
projects’ productivity. This project report focuses
on these opportunities, but above all, the report
discusses the preconditions that must be considered
before digitalization can contribute to productivity.
Improving the productivity of industrial projects is
a topical issue. Primarily, the construction industry
has been in the headlines due to the very poor
productivity development reported by Barbosa et al.
in the 2017 McKinsey Global Institute Report. There
Applying digital
tools to an old
process is unlikely
to improve
eiciency.
INTERNATIONALLY
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BUSINESS
FROM
DIGITALITY
7
is a compelling need to improve productivity particu-
larly in the construction industry so that the industry
is able to respond to market demand but also so that
the cost-level can be held in check. The development
of technology and successful track records from
various use cases in dierent contexts also induce
interest in the use of digital solutions in project ei-
ciency initiatives.
Digitalization indeed touches nearly all business
operations today. It is a phenomenon that carries
versatile promises and opportunities, yet digitaliza-
tion does not necessarily add value. Applying digital
tools to an old process is unlikely to improve ei-
ciency. Therefore, reaping benets from digitalization
requires careful preparation. It is certainly not just a
question of technologies. In addition to functioning
technologies, it is critical that the underlying way of
operating supports the use of the new tools. Equally
important is designing the processes such that the
digital tools can deliver the expected value. One of
the most signicant reasons for digitalization failing
to deliver added value actually relates to attitudes,
management, and business practices (Bowersox et
al., 2005). The way the work is organized is critical for
improving its productivity (Pritchard, 1995).
This report presents the main research ndings from
the DigiPro research project (9/2016–12/2018), which
was funded by Business Finland. The project was
the joint endeavor of two universities and four
Finnish SMEs. The report also analyzes the most
important lessons learned and some best practices
in the joint project context.
At the outset the goal of the project group was to
nd a joint project management solution. Each
of the companies planned their own project to
support the whole. The project plan was designed
to be rened during the project through iteration.
Early on aer the initial stages it became clear that
instead of one joint solution, each participating
company should work on their own solution, tightly
linked to the project scope.
The report is organized as follows. First the
project objectives are discussed in greater detail,
and thereaer the project process is described.
Section 4 presents the most important results of
the project. First the academic ndings are exam-
ined, aer which the participating rms’ results
are briey presented. The last part of the section
includes the practical tools and frameworks devel-
oped during the project. Section 5 discusses the
lessons learned during the project concerning
university–industry collaboration. Finally, section 6
presents the conclusions.
INTERNATIONALLY
SCALABLE
BUSINESS
FROM
DIGITALITY
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The goal of the university research projects as
dened in the project plan was to scrutinize the
business models for commercializing internation-
ally scalable digital solutions that are created as a
joint eort of a network of companies. In addition,
the universities were appointed to support the
participating companies in developing their business
models and to disseminate widely what is learned to
Finnish companies.
Each participating company had their own devel-
opment project aimed at contributing to a project
// PROJECT OBJECTIVES
2
All of the
participating
companies work
closely with their
customers to
improve their
customers’
operations.
INTERNATIONALLY
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BUSINESS
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9
management solution. The project ecosystem is
illustrated in Figure 1 on the le. The four partici-
pating companies are shown inside the blue boxes.
The arrows between the companies illustrate the
collaborative relationships. During the project
the companies were all open to discussing and
exchanging thoughts on the solutions. Despite the
initial plan for one joint solution, the iterations
during the project execution led to the decision to
invest in complementary yet separate solutions.
All of the participating companies work closely with
their customers to improve their customers’ opera-
tions. The project management solution that they
developed during the project adds important value
to their oering and gives them additional tools for
creating value for/with their customers.
In developing the solutions, the companies needed
researchers’ input into numerous processes.
Academic researchers supported the companies
primarily in the following activities:
1. developing a deeper understanding the customer
problem the solution solves;
2. determining the roles, goals, and requirements
of dierent partners in the network;
3. dening and understanding cost and revenue
streams in the complex network;
4. developing measures that support customer
value transparency.
FIGURE 1.
ECOSYSTEM OF
THE PARTICIPATING
COMPANIES
CUSTOMER
(CONSTRUCTION
INDUSTRY)
CUSTOMER
(OTHER
PROJECT-BASED
INDUSTRY)
PROJECT
SUPPLIER
LOGISTICS
SERVICES
Wiima
Logistics
PROJECT
SUPPLIER
PROJECT
SUPPLIER
TECHNOLOGY
PARTNER
TECHNOLOGY
PARTNER
IT-PLATFORM
DEVELOPER
Sininen
Polku
CUSTOMER
(MARITIME
INDUSTRY)
SUPPLIER
PROCESS
DEVELOPER
Carina
Solutions
PROJECT
SUPPLIER
Europlan
Engineering
INTERNATIONALLY
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While cooperating with the companies in collecting
and analyzing data to answer their questions, the
academic team accumulated research data.
According to the project plan, the research project
will benet the participating companies and also
disseminate the ndings broadly to Finnish SMEs.
The plan included various academic contributions
on the following themes:
– How do companies on one hand recognize and on
the other hand create an opportunity to create value
through digital solutions?
– What kinds of needs for change do digital solutions
create for individuals and companies (work tasks,
systems, processes)?
– What kinds of business models are feasible to build
around digital solutions in a value network?
– How do companies build internationally scalable
business models that promote committed customer
relationships?
– What kinds of capabilities do the implementation
and commercialization of the solutions require?
In addition, the objectives were to:
– Map the existing digital technologies and analysis
of the business models and the network interactions
around them;
– Engage in practical yet science-based cooperation
with the companies to develop tools for building and
analyzing business models;
– Accumulate rich process data through compa-
ny-specic interviews and observations as well as
through action research within the group of rms
and in the horizontal and vertical workshops;
– Enhance understanding of the demands the tech-
nological context sets for the business model and of
the interaction and integration processes required in
co-creating such business.
11
INTERNATIONALLY
SCALABLE
BUSINESS
FROM
DIGITALITY
// PROJECT PROCESS
3
The process of the DigiPro research project can be
described from two perspectives. On one hand,
the four participating enterprises followed their
own project plans, which proceeded in parallel
within a dened time window and set goals. The
product development of companies followed
iterative cycles (see Figure 2) in which problem
validation and specication of the solution option
as well as the production and evaluation of the
solution proceeded one aer the other.
FIGURE 2.
THE PRODUCT
DEVELOPMENT
PROCESS OF THE
PARTICIPATING
COMPANIES
SPECIFICATION
OF SOLUTION
PRODUCTION
AND EVALUATION
OF SOLUTION
PROBLEM
VALIDATION
INTERNATIONALLY
SCALABLE
BUSINESS
FROM
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12
As far as the content of the project activities are
concerned, various themes were dealt with during
the project (see Figure 3). Dierent methods were
utilized for the collection of data depending on the
theme and purpose of the research, involving, for
instance, in-depth interviews and an online ques-
tionnaire. First, the project started by gaining an
understanding of the problematics and needs of
current and potential customers in project indus-
tries. This was a crucial stage in the project since
the process helped the companies to validate the
previously dened customer problems. Second,
deeper benchmarking on the construction industry
was carried out in order to gain insights into new
On the other hand, the work of research institu-
tions followed the work pace of the enterprises as
project activities were largely planned based on the
emerging needs of the participating enterprises.
The project activities consisted of dierent types
of workshops, seminars, and events as well as data
collection and publication activities. For instance,
the enterprises and researchers worked jointly on
the arising problems of the enterprises in several
workshops where specialists from dierent elds
participated. Moreover, data were collected during
the product development process both within and
outside of the project in order to examine various
types of research questions relevant to the project.
FIGURE 3.
THE THEMATIC
PROCESS OF THE
PROJECTS
CUSTOMER PROBLEMATICS
AND NEEDS
Project industry
perspective on
digitalization
Alliance
models in the
construction
industry
Business
model
experimentation
and development
Product and
marketing
development
in logistics
Critical
factors and
challenges
in project
industries
Critical
factors and
challenges
in maritime
sector
The perspective
of opportunity
recognition and
mental images
BENCHMARKING BUSINESS
MODELS
CUSTOMER
INSIGHTS
PROJECT
MANAGEMENT
COMMERCIALI-
ZATION OF
DIGITAL
TECHNOLOGY
CO-CRE ATION
AND
COLLABORATION
INTERNATIONALLY
SCALABLE
BUSINESS
FROM
DIGITALITY
13
types of collaboration models between several
partners. Third, business models were examined, for
instance, in reference to the changes that digitaliza-
tion creates. Fourth, deeper knowledge of customer
insights during product and service development
was investigated. As a h and sixth theme, critical
factors and challenges related to project manage-
ment and the commercialization of digital tech-
nology in the domestic and international markets
were explored. Furthermore, as the development
work proceeded, the researchers collected longitu-
dinal data on the progress of the process and collab-
oration within the project partnership, which was
later analyzed, for instance, through opportunity
recognition and mental image concepts.
To summarize the thematic process of the project,
the themes varied during the process. However, one
main theme repeatedly emerged during the project:
knowledge of the customer need in the project
management. It proved to be essential to return
to this theme along the project implementation in
order to further specify the needs of the customers
and validate the problems.
INTERNATIONALLY
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// RESULTS
4
A common and
problematic routinized
model is that
customers put o
purchasing until the
last minute, and orders
come in too late.
Academic results
The focal ndings from the academic research
conducted during the project relate to the following
themes: business models, customer understanding,
project management and alliances, and, nally,
internationalization. The discussion begins with an
examination of business models since the utilization
as well as selling of novel digital tools necessarily
demands changes in a company’s business model.
INTERNATIONALLY
SCALABLE
BUSINESS
FROM
DIGITALITY
15
Also, becoming a part of an ecosystem has implica-
tions on the business model. Secondly, the project
demonstrated very well the signicance of customer
insight and the understanding of the customer need.
These issues were discussed with the participating
companies throughout the whole project. Addition-
ally, the results shed light on the alliance model
as one way of organizing large projects and on the
critical factors and challenges of the international
commercialization of digital solutions.
BUSINESS MODELS
As the Internet spread and became a common tool
in companies, suddenly a plethora of new business
models became available for companies. The late
1990s was a golden age for new “dot-com” compa-
nies, which that based their business models on
the fast-spreading Internet. Since then, hundreds of
research articles have been published on dierent
aspects of business models.
The business model concept can be dened in many
dierent ways. One of the most important aspects
in dening the concept is the abstraction level from
which business models are examined.
Figure 4 is description of dierent business model
abstraction levels described in detail in the disserta-
tion of Rissanen (2019). The original gure is adapted
from Massa and Tucci (2013) and Nielsen, Lund, and
FIGURE 4.
LEVELS OF BUSINESS MODEL
ABSTRACTION (ADAPTED
FROM MASSA & TUCCI, 2013
AND NIELSEN, LUND, &
THOMSEN, 2016)
LEVEL OF ABSTRACTION
The real operating rm
Business activity systems
Business model congurations
Ontologies and frameworks
Archetypes
Metaphors
and narratives
INTERNATIONALLY
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FROM
DIGITALITY
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Thomsen (2016). Metaphors and narratives are the
general entrepreneurial stories describing the busi-
ness. Archetypes refer to the “razor and blade”-type
generalizations of business descriptions. Ontologies
and frameworks include Osterwalder, Pigneur, and
Tucci’s (2005) business model canvas, which simpli-
es the business model into a given framework.
Business model congurations comprise a detailed
set of dierent congurations that can be set to
dierent modes. Business activity systems come
from Zott and Amit (2010) and provide a detailed
description of a company’s business activities. The
bottom layer is the operating rm in detail.
For companies, the business model canvas frame-
work by Osterwalder, Pigneur, and Tucci (2005) is by
far the most well-known. It provides enough detail
to describe the strategic choices of the company
but is simple enough to be presented on one sheet.
The business model canvas is not a very useful tool
for running the business, however, as it lacks the
dynamics that all businesses face. The business
environment undergoes constant change, and the
basis on which the business model canvas is made is
easily deteriorated.
For the reasons mentioned above, the research in
this project has concentrated on business model
change and experimentation processes in interna-
tionalizing companies. Internationalization has been
chosen as a context because it is present in dierent
ways with all the companies that participating in the
Digipro project and because it is a major reason why
companies must change their business model.
Business model change is a research problem that
does not have easy answers. In the research papers
published in this project, there are a number of
outcomes that provide some further insight into the
topic, however, as follows:
1. The home market plays an important role in the
key decisions an internationalizing company makes;
a company from a country with an immature home
market may be able to enter international markets
more easily than one with a mature home market. In
addition, the way companies use their home market
context while in the international markets depends
on the situation in their home markets.
2. Companies have dierent ways they can run
multiple business models at the same time. They
can (a) build separate structures within the company
or establish a spin-o company for business model
experiments; (b) they can alternate between
exploring new business models and exploiting
existing business models; or (c) they can run dierent
business models with the same team simultaneously.
Option (c) is more likely to be utilized by startups,
while option (a) is better suited to incumbents.
INTERNATIONALLY
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3. Depending on the development stage of the
company, its international business model, and
its international growth strategy, there are at
least four dierent approaches to business model
experimentation while internationalizing. Upstart
startups make a business model pivot and jump
into international markets in a lean startup mode.
Lean global startups use technological innovation
to build competitive advantage in the international
markets from the beginning. Cautious late bloomers
are incumbent companies that enter international
markets aer enjoying success in their home
market. Finally, seasoned buccaneers are born global
startups that have successfully pivoted with their
business model during their internationalization
process.
PERCEPTIONS OF PROJECT
MANAGEMENT: CONSTRUCTION
& MARITIME INDUSTRIES
Project managers’ perceptions of the state
of project management in the maritime and
construction industries
As a part of the project, the research team
conducted an empirical survey. The purpose of the
survey was to identify how companies perceive their
own project-based business processes and how
they deal with the challenges that emerge in project-
based business environments.
Quantitative empirical data were collected in an
online survey targeted for project managers in the
maritime and construction industries. The respond-
ents of the survey were contacted via the rm in
which they worked. A list of all companies operating
in Finland’s maritime and construction industries
and employing between 10 and 250 employees was
compiled. For the construction industry the search
was based on industry classications. In the case of
the maritime industry, the selected industry classes
had to be screened because they also included some
other than maritime industry operators (e.g., among
engineering rms only some companies work on
maritime industry projects). Hence, only part of the
companies under the selected industry codes were
included. Altogether 334 companies were contacted,
and the response rate was 22.5%.
On average the incumbent companies (N = 75) are,
according to their own observations, doing ne,
and they perceive their project management to be
in a relatively good shape. For instance, 85% of the
respondents found their projects to be completed
on time. This view was shared in both industries:
in the construction sector that gure was 86.3%,
and in the maritime sector it was 82.8%. This result
is rather surprising as it is commonly expected
that projects will face delays, especially construc-
tion projects. The potential reasons at least partly
INTERNATIONALLY
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explaining this result are selection bias (represent-
atives from high-performing companies), or the
respondents were overly positive.
In any case, the incumbents do not see major
reasons for business model changes or increasing
innovation activity in their own processes. The
project management in these companies perceives
that the project management practices and
processes are functioning well and that the projects
are generally successful. Furthermore, dierences
between the construction and maritime sectors
were rather minimal.
However, discussions on the survey ndings with
industry outsider experts triggered the need to
examine the responses more in-depth. To reach a
deeper understanding, a follow-up interview was
conducted with respondents having experienced
problems with these issues (“outliers”). The compa-
nies were typically small and mid-sized rms, whose
turnover varied between 3–20 million euros repre-
senting the maritime, construction, and mechanical
engineering industries.
Their problems were related to the following root
causes: the management culture of SMEs, subcon-
tractor network operations, and the maintenance
and repair project model. These factors together
explain some of the underlying reasons why the
adoption of new project management models and
digital tools is challenging. The following gives a
summary of the issues encountered in the inter-
views.
Management culture of SMEs
An important factor behind the perceived challenges
in current project management practices was found
in the management culture of SMEs.
Project business in some Finnish SMEs follows a
one-o pattern. Projects are sold one aer another
and realized with a team where the members remain
the same and everybody knows roughly what to do.
A new project is started when the previous one is
ending to keep resources in productive work. As long
as project bids are won and a certain prot comes
from the projects, things are le as they are. There
is little room for developing processes or taking new
project steering tools into use.
In privately owned enterprises the owner inuences
much of the project management and decision-
making culture, especially in family-owned rms.
In the case of a strong owner and CEO who has a
dominant position, the resulting culture is one of
avoiding responsibility and unwillingness to partici-
pate in open collaborative decision making. Project
INTERNATIONALLY
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information is not shared openly across projects,
which leads to diiculties in cross-departmental
collaboration. Things have to be done through unof-
cial channels.
In the opposite case, if the owner and CEO is disinter-
ested, a management model prevails where upper
management does not participate in project steering
meetings and is not interested in project challenges
or project assessment. Therefore, project objectives
are scarcely followed with project managers who
assume an independent role as individual entrepre-
neurs inside a company.
An SME can grow through buying other small rms.
In one case the former owners of the bought rms
continue as project managers and as shareholders in
the growing rm. The project managers are inde-
pendent in their work and do not recognize the need
to share information with others. They also continue
their individual types of project management. There
is no chance of reaping benets from common
operational models and measures. A subsequent
feature in SMEs is a lack of feedback and bonus
systems. Usually schedule and budget goals are set
for projects, but follow-up and reward systems are
lacking. The prevailing assumption is that if a project
manager delivers business as usual, there is no need
for feedback nor discussion from the owner.
In another example, the project manager gives
feedback to his team through email upon the
project’s end. Still, company management does
not participate, and no development eorts outside
project activities are carried out.
The role of the owner and top management in SMEs
seems central in dening the management culture
of a company. Therefore, if project management
practices are to be developed, we have to start
asking, What are the key objectives for the SME owner,
and how should these expectations be re-examined?
Subcontractor network
The rms that operate as subcontractors are in a
position where they are highly dependent upon the
network’s performance. This was a reason behind
perceived diiculties in project denition and sched-
uling as well as diiculties in managing changes
during the project.
For example, a mechanical component manufac-
turer has its immediate customer in Finland, but the
end clients are large, multinational rms, who are
represented by foreign engineering rms. A subcon-
tractor cannot participate in project planning early
on in this network, which leads to late orders,
and approval chains in project changes can be
cumbersome.
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The supplier has good personal relations with its
immediate customer, but it cannot reach further in
the delivery chain for information about incoming
orders and timetables. The other way around, the
immediate customer does not forward data on the
parts of the larger delivery. The subcontractor data
are lost in between and remain only an isolated part
in the network.
In maritime industry repair projects, the network
consists of a ship owner and its representatives;
a repair integrator rm; and various subcontrac-
tors, such as architects, assembly contractors, and
component suppliers in Finland and abroad. The
owner and project integrator headquarters can be
located in Europe, and there is no access to them.
In this setting a Finnish subcontractor delivers its
work and does not communicate with others except
its immediate customer, which is another subcon-
tractor of the ship repair project.
In addition to the subcontracting network, project
denition was experienced as problematic due to
reasons related to large customer organizations.
As an example, a large public customer organiza-
tion with internal departments for procurement,
engineering, maintenance, and use has a complex
decision structure. End-users focus on quality but
overlook costs, whereas procurement lives within
a complex budgeting system with public procure-
ment rules.
In this situation the project manager wants to hear
from the end-user and tries to steer the customer
to dene their requirements while at the same
time trying to balance costs with the procurement
people. Project denition gets into problems related
to changing customer needs, multiple customer
interfaces, and diiculties in interpreting functional
specications.
In sum, a central problem in subcontractor networks
is that the customer requirement remains unclear
and out of reach because the purchasers and users
are separated. How can a subcontractor then specify
a project? At delivery this leads to dissatisfaction
due to missing customer requirements.
Maintenance and repair project model
The maintenance and repair project model is char-
acterized by simultaneous design and realization
as a project unfolds aer dismantling a machine or
tearing down a building under repair. For this reason,
such projects have low predictability and the work
planning is supercial. There are many variables in
repair projects that aect the budget, and the whole
project can change so much that the budget is no
longer usable.
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The maintenance and repair project model was
identied as an important reason for having unclear
project denition and project aims in the survey
response. As a consequence, repair projects require
more resources than new building projects. The
model requires skilled project managers capable
of making judgments on-site and communicating
between the project’s parties over the course of the
project.
The maintenance and repair project model also
brings with it additional work that can be of great
signicance and cause costs not taken in account.
This can also be an intentional business model used
by some rms for getting a deal rst and selling
more aerwards. This makes it diicult to plan a
project because a project manager’s work is to sell
extra work on-site.
The experience of the customer was found to be
important for successfully managing maintenance
and repair projects. Experienced customers are
prepared to project changes, but problems arise
with inexperienced ones when the budget exceeds
expectation. These are oen small customers who
do not understand what is to be expected and whose
expectations exceed what can be done in reality.
Some of the sub-component work can be estimated
precisely, but the overall scale of the project is
unpredictable. Also, it was found that there were few
statistics for predicting because follow up is based
on accumulated human experience. Project oering
is also based on the experience of the project
manager.
Challenges for project management
The current way of doing business in the networked
environment creates many challenges for project
management.
A common and problematic routinized model is
that customers put o purchasing until the last
minute, and orders come in too late. The customer’s
purchaser does not think about the order in time or
does not specify clearly enough what she wants. The
orders in come so late that there is hardly enough
time for manufacturing, even when working over-
time. Time is lost due to this delay, but the deadline
does not change for the actual delivery. The oer’s
validity has already passed, but the subcontractor
has no alternative other than to fulll the oer
despite the lack of time. It has become a type of
competitive advantage for the subcontractor to be
able to deliver in such a short timeframe.
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One reason mentioned were the dierent expec-
tations regarding project realization between the
supplier and the customer. The customer expects
that the project has already been planned and can
be realized fast and directly aer the order is made.
In reality there are few resources for planning the
project in detail because of competition in the
sector and consequently a small share of the project
budget for planning. There are many open ques-
tions that require additional planning and iteration
aer the order. The supplier wishes for more itera-
tions between the parties to obtain the necessary
customer feedback.
Another view was that the network lives in a design
world and not in a realization world. For instance,
in the beginning of a ship project, time is lost in in
architectural design, and no thought is given to reali-
zation or making orders from subcontractors. There
are two dierent professional worlds that do not
meet. Alternatively, in the ship operating business
there is nevertheless a long-term planning culture,
and the repair projects could be planned better.
In the face of time pressure, the subcontractor uses
pricing to prevent certain changes in a project. If a
change is seen as impossible in a given timetable,
then a high price prevents the customer from
making the change. If there is enough time for the
change, a lower price is given to get the deal. This
is called project “game intelligence,” and the project
manager is the business maker in this type of project
business.
In response to unclear customer needs and problems
in project denition, the cascade project model has
been rejected by some rms. Instead, a last-planner
type of project management is adopted, referring to
taking on tasks that have enough information and
delaying tasks that do not. This causes friction in an
institutionalized sector that is used to operating with
a straightforward cascade model.
Contracts
In the survey, contracts were considered rather unim-
portant in managing projects. Further interviews
revealed that in practice projects are based more on
trust and the reputation of the personnel’s compe-
tence and the rm than contracts. It is based on taking
responsibility to ensure that what is done also works
and that in a conicting situation the rm is ready
to take responsibility for their mistakes. This was
possible in an established network where everybody
knows their role in the network operation and their
duties and responsibilities if something goes wrong.
Contracts are in the background, but actual
project steering is conducted in collaboration with
the customer, through mutual deliberation on the
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situation. The guiding principle is seeking the best
solution for the customer. It was also stated that
contracts should not dene a project, but instead
the business should guide a project. Contracts
should be signed proactively so as to support and
enable the kind of business that the project is aiming
to conduct.
In many cases a contract is not signed, and instead
the documentation consists of the documents from
oer to order and subsequent mail exchange. The
documentation is rarely revisited. In the mainte-
nance and repair model some projects expanded
greatly. In this case contracts were made orally as
verbally agreed types of contracts.
CUSTOMER INSIGHT FOR
NEW SERVICE DEVELOPMENT
The role and utilization of customer insight in new
service development was examined in a qualitative
sub-study. Particularly, the following issues were
addressed:
1. How to acquire relevant insights for the develop-
ment of a new service
2. How to integrate customer insights into the devel-
opment process of a new service
Based on a review of the academic literature
and interviews with one service provider and six
prospective customers, the study nds that the
process of involving the customer and accumulating
customer insight is a valuable opportunity to educate
the customer about the new service. Hence, in addi-
tion to enhancing service development, accumulating
customer insight in a dialogical process potentially
also promotes sales or at least customer interest as
well as longer-term customer relationships. Engaging
prospective customers in the customer insight
process makes them aware of the service provider’s
genuine interest in customer needs.
Customer insight must be accumulated in various
ways and in dierent phases of the service develop-
ment process. The study focused on experimenting
with interviews as the customer insight method in the
service specication phase. The company had devel-
oped a vision based on the initial idea and started the
basic technical development work. The prospective
customers were interviewed regarding the challenges
they face and the potential benets of the envi-
sioned service solution. The interviews were actu-
ally conducted by an outsider agent, not the service
provider, which proved to be an eicient solution.
The ndings highlight the importance of including
variety in the customer insight process. Each
customer has their unique perspective, and it is
important to be able to distinguish the customer-
specic needs from the more generic needs. In
addition to the information on the customer’s
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needs, the customer insight methods also generate
information on the potential customer’s concerns
regarding the service under development as well
as understanding on the potential barriers that the
customer has in regard to implementing the service.
Overall, the ndings support the signicance of
accumulating customer insight during the service
development process. Nonetheless, customer
insight methods may have also some negative inu-
ences, which were not examined here. These remain
for future research to scrutinize.
With industrial customers it is also worthwhile to go
through a facilitated customer process mapping to
gain a thorough understanding of the pain points in
the customer’s operations that the service can alle-
viate. This was tested in the project with one of the
participating rms and their customer concerning a
novel service that was being developed. The key to
the success of the mapping was that it was a struc-
tured exercise and that the workshop was facilitated
by a trusted, neutral outsider.
INTERVIEWS WITH
PROJECT CUSTOMERS
In the beginning of the project, the challenges of
project management in project industries as well
as customer needs for solving the challenges were
explored from the perspective of digitalization in
two industries: the maritime (shipping companies,
shipyards, and suppliers) and construction indus-
tries. Several representatives from both industries
were interviewed. The purpose was to gain a deeper
understanding of the challenges the companies face
in industrial project management and what types of
current and future needs they have.
The capitalization on data in industrial projects
proves to be an important factor in improving the
performance of companies. Various digital tools are
already in use in dierent phases of the processes.
However, creating an overall view of the project is
sometimes a challenge for the project management:
even if the project were to proceed on schedule, the
risk of not noticing some underlying factors that
might aect the whole project is present. The nd-
ings show that a new type of data usage as well as
new digital tools for the real-time control of work,
material, and devices are needed. The improve-
ment of control and time management has become
especially important due to increased production
volumes and, thereby, high workloads. However,
new digital systems must meet the needs and
requirements of the processes, and these systems
need to be eectively integrated with the other
systems and solutions of the company. Furthermore,
some respondents addressed the need to involve
the subcontracting network in the system integra-
tion to improve the transparency and maximize the
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benets. However, this type of major transforma-
tion creates further challenges. One of the chal-
lenges relates to data protection issues, that is,
the extent to which companies can share tools and
data between dierent partners within a network.
It is an important issue to be addressed in case the
subcontracting network is involved in the process.
However, one respondent expressed the importance
of focusing on the improvement of internal systems
in one’s own enterprise instead of the involvement
of the subcontracting network. Alternatively, some
respondents noted that digital tools had already
been acquired but that the willingness and capa-
bility of the personnel to use them play a more
critical role in the change process. The systems and
tools need to be easy enough to use to make them
more user-friendly to the personnel. Another essen-
tial factor aecting the pace of digital change relates
to the internal decision-making process in compa-
nies, which was perceived to be slow in some.
The digital transformation also requires a deep
understanding of the industry dynamics on the
part of digital developers. Indeed, it is expected
that the value chains and the role of the players will
experience transformations in the near future. For
instance, new players that manage the utilization of
data better than the project customers are expected
to enter into the value chain. Nevertheless, even
though several respondents noticed that it is neces-
sary to utilize external partners in the new business
development, the ndings also indicate that some
actors have expertise inside their organizations,
which is why they seek to avoid close partnerships
external to the enterprise and instead focus on
internal system development. Moreover, it is impor-
tant to note that opinions between the leaders of
dierent departments and the management team
sometimes dier as far as the system procurement
and utilization of partnerships are concerned.
Digitalization is a great opportunity for project
industries, but, simultaneously, some companies
consider it to be a threat to their current business
operations and business models. Yet, signicant
changes are occurring in the industry, which will
force all companies to change their business prac-
tices in the future.
PROJECT ALLIANCES
Project alliances are one way of organizing large-
scale projects. Customers have begun opening
projects in alliance form for competitive bidding,
particularly in the domain of infrastructure. The
objective of organizing projects as alliances is
to improve eiciency and quality and to reduce
costs by increasing cooperation and coordination
between the companies involved in delivering the
output (Airola & Heikkinen, 2013).
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Partner selection is one of the most critical issues for
alliance success. The selection process and criteria
were examined among Finnish companies involved in
infrastructure projects. The process of partner selec-
tion proceeds in rounds of self-assessment—partner
evaluation—negotiation and nal choice. The most
notable characteristic of the project alliance partner
selection process is that it begins before the oicial
call for bids. Due to the limited number of potential
winning partners, companies have to start the selec-
tion as soon as they get the rst clue that a project
might become an alliance project.
First, the company evaluates whether it has the
potential to win the bid alone or whether it needs
partners. If partners are needed, it initiates the rst
round of partner selection. Aer the selection of
the rst partner, the process becomes dialogic, and
together the companies evaluate the need for further
partners. Generally, rms aim at keeping the number
of companies as small as possible because a large
number of companies possibly leads to problems
in, for example, tting company working cultures
together.
The selection criteria fall under the three
following categories:
1. Technical factors
2. Project alliance-specic factors
3. Partner t-related selection factors
Based on the identication of these factors, we
present a tool to guide alliance partner selection in
the section titled “Practical tools and processes” of
this report.
Case Vt 6 TaaLa: Improving knowledge
sharing via digitalization
One industry sector in Finland where project alli-
ances are the norm is the construction industry.
The case of the Vt6 TaaLa project is to improve
the highway from Lappeenranta to Taavetti by
expanding it to a 2+2 lane highway with median
barriers and provides an illustrative example of
both the challenges and opportunities for improving
knowledge sharing in project alliances through
digital tools. The highway to be constructed is 28
km long and consists of 11.5 km of new highway
and 16.5 km of the broadening of existing highways.
There are ve interchanges and 20 bridges, of which
four are renovations and/or extensions of existing
bridges and 16 are new constructs (Lindell, 2018).
The client for the project is the Finnish Traic
Agency, and the type of contract is an alliance. The
alliance is formed by the following four partners,
each with dierent roles:
– Finnish Traic Agency (owner/client)
– Skanska Infra Oy (constructor)
– Pöyry Finland Oy (designer)
– Ramboll Finland Oy (designer)
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The total cost estimate of the project for the client
is 76 M€, of which construction fees to be compen-
sated are 61,515,000 €, and the constructor’s xed
fee is 5,339,802 € (Lindell, 2018). As part of the study
on this case, dierent knowledge ows in the project
were identied and their bottlenecks examined,
with possible remedies suggested.
Overall, the level of the digitalization process in the
project was found to be relatively primitive, and
the utilization of digitalization and IT systems in the
case project were also found to be extremely unde-
veloped. The information mostly resided in poorly
utilizable formats; there were barely any integra-
tions between IT systems, and the access to these
systems was oen restricted between the project
partners. There were also no formalized processes
for knowledge transfer. Because of these factors,
for the project partners to identify a single point of
targeted improvement turned out to be challenging
for all parties involved.
Based on the case, we concluded that many of the
eiciency problems in the industry are related to the
knowledge-sharing culture (or rather, lack thereof)
present in the industry. The main conclusion from
the case was that for the project to perform as an
industry-changing front runner in the eld of digital-
ization would require a great deal of extra eort in IT
system development as well as in the mindset of the
companies involved. Therefore, extra research into
the subject would be required to make more than
the most general of recommendations.
We observed that all of the participants in the alli-
ance seemed to be very wary in regard to trying
to change the industry via methods knowledge
management. We suggest that every participant
in the alliance has the potential to try to move the
industry toward a better direction by taking a more
sales- or marketing-centric approach to knowledge
sharing. Someone will eventually change and dene
the future of the industry, and the participants
should consider whether they are the ones leading
the industry’s change or those that have to adapt to
the change promoted by others. This kind of mindset
is also a risk management strategy since some
investments made by the companies might become
obsolete as the industry standards would be dened
by someone else (Destia, for example, has been an
active participant in dening the nal documenta-
tion for infrastructure projects). As a major customer,
we would suggest that the Finnish Traic Agency
should also take its role as the industry dener as
improving the quality of the construction projects
industry-wide serves everyone’s benet in the end.
Organizational learning is a process that more
emphasis should be placed upon. Best practices
should be spread from one project to another to
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increase the eectiveness of the companies. Only
Pöyry had at the time of the interviews started
to pay attention to the matter. A major factor for
organizational learning from an analytical perspec-
tive and also for the quality of the explicit knowledge
and information created during the projects would
be to store the codied knowledge and information
in a reusable format. This would mean that the data
would be stored in BIM or databases. These kinds of
changes to the predened templates for documenta-
tion would enable the dierent kinds of documenta-
tion to be produced automatically or prelled from
the data in databases. Also the change would serve
as an enabler for the future integration of dierent IT
systems. As a major construction company, Skanska
could also consider the option of providing project
IT infrastructure as a service and thus reduce the
chance of unnecessary integrations.
One easy way of tackling problems related to
day-to-day communication tied to time and place
would be to start using a tool such as Slack, making
it possible for dierent organizations to use dierent
channels to communicate with each other. Slack
of course is not the only option for such a task, but
the tool chosen to be utilized should provide its
key features, such as the possibility to chat, store
message history, and search; user rights manage-
ment; ease of use and access so that people with
limited IT skills could participate; a cloud-based
system so no installations/infrastructure are
required; and easy scalability. Slack was chosen
as an example as it is quite common tool used in
multi-organizational IT projects.
Many of the problems present in the construc-
tion industry have been solved in other industries
involved with complex multi-organizational projects.
Overall, the case indicates that companies working
in the eld of the construction industry should
actively be researching how project management is
conducted in other elds of industries and reect as
to whether the methods used there could be utilized
in their own projects.
INTERNATIONALIZATION
Digital transformation creates major opportunities
for enterprises and industries globally. Similarly,
new business potential has been identied in the
maritime industry as a need for new types of digital
technologies has emerged for improving processes
and business operations. Several SMEs, including
young startups, that specialize in technology and
soware development have responded to this need
by providing new digital technologies. Based on
the interview data of six SMEs and startups, three
in Finland and three in Denmark, we the explored
critical factors and main challenges involved in
SMEs’ commercialization processes in the home and
international markets.
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The commercialization of digital technology plays
an essential role in the process of innovating new
products and services (Chiesa & Frattini, 2011),
which is why companies need to have enough
resources to invest in the process and identify the
critical factors for successful commercialization.
However, when commercializing new products and
services, companies may face several challenges
that complicate a successful launch into the market
(e.g., Sandberg & Aarikka-Stenroos, 2014). More-
over, companies need to acknowledge possible
dierences between the commercialization in the
home market and in the international market.
For instance, new types of commercialization and
internationalization paths have emerged as a result
of digitalization and the creation of digital platforms
(Ojala et al., 2018).
The empirical ndings indicate dierences between
the enterprises in terms of commercialization
practices used. Some of the enterprises rely on
predetermined plans or steps to be followed when
commercializing new products and services. Others
commercialize products and services more on the
go. Based on the ndings, critical factors regarding
a successful commercialization as well as the chal-
lenges faced in the commercialization process
are identied on the following four levels: 1) the
customer level, 2) the supplier level, 3) the external
level, and 4) the country level. Below, major obser-
vations are presented on each level (for a more
detailed description, please see the publication; the
publication list is attached in the end).
1) On the customer level, the eects of digitalization
on the business processes of the customer and the
needs of dierent customer segments should be
considered. For instance, several respondents noted
that not all customer segments in the maritime
industry are making the most of the digital develop-
ment even though the need for new types of digital
solutions for improving business processes and
eco-eiciency exists. For instance, some customer
segments are cautious about carrying out changes
and the major investments required by the digital
transformation, which creates challenges for the
solution provider. As far as customer needs and
providing customer value are concerned, they play
a critical role in the commercialization process of
digital technologies since without putting eort into
understanding the needs, the value added is diicult
to demonstrate to the customer.
2) Other critical factors inuencing the success of
commercialization relate to network and ecosystem
advantages on the supplier level. Especially in
the maritime industry, forming networks plays an
important role in commercializing new products
and services. In addition, some managerial and
organizational factors need to be addressed, which
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may pose both opportunities and challenges for the
supplier. For instance, the small size of the enterprise
may prove to be either a challenge or an opportu-
nity depending on the situation. Startups may face
challenges in the commercialization process due to
limited capital and resources and because of limited
established networks. Alternatively, sometimes
small size enables more agile and exible actions
as well as a more favorable balance of power, which
customer enterprises may appreciate.
3) The external level involves dierent types of
regulations, which may either address challenges
or create new opportunities for the enterprises. For
instance, a new industry regulation may complicate
the commercialization of new products, and adjust-
ments need to be made for the products. However,
regulations may produce a competitive advantage
for an actor who can answer a new customer need
resulting from the regulation.
4) The last level refers to the country level. As far as
the commercialization process in the home market
versus the international market is concerned, the
ndings indicate some dierences between the
perceptions of Finnish and Danish enterprises. Two
Danish enterprises pointed out that commercial-
izing new digital solutions in the home market is
easier than in the international market. The main
challenges in the international market relate to
cultural dierences, the limited local networks, and
the fact that customers oen prefer a local supplier
to a foreign one. The third Danish enterprise agreed
with the notion that the enterprise had had some
challenges in the international market due to its
small size when they started doing business, but
the challenge had later been solved. Two Finnish
enterprises perceived the situation as the contrary.
According to these enterprises, commercialization is
oen easier to carry out in the international market
when compared to Finland based on the markets
where they had experience. The reasons mentioned
were, for instance, the following: foreign customers
show more willingness to change and more readi-
ness for risk taking and large investments and seem
to be capable of faster decision making in compar-
ison with Finnish organizations. Several factors may
explain this dierence and need further research;
for instance, the size of the enterprises in ques-
tion may aect the investment plans and ability to
invest. The third respondent in Finland did not have
experience in commercializing digital technology in
the home market, even though they recognized the
challenges caused by cultural dierences. Never-
theless, the ndings further indicate that acquiring
know-how in international markets by establishing
and maintaining networks aids enterprises in the
commercialization process. Moreover, the estab-
lishment of oices with local sta in international
markets enables an easier entry into the markets,
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which may even become a competitive advantage for
the enterprise. Yet, one respondent mentioned that
sometimes cultural dierences appear internally e.g.
between their Asian and Scandinavian oice. In order
to avoid any misunderstandings, the company has
considered paying more attention in the cultural mix
in the oice.
Company-specic results
Four SMEs from the Turku region in Southwest
Finland participated in the project. The common
goal of the companies participating in the project
was to develop a digital solution for improving the
management of complex industrial projects. During
the development work, it was discovered that several
solutions should be developed for dierent purposes
as each enterprise had specic expertise needed for
a successful project implementation and the devel-
opment of these solutions.
Carinafour (Carina Solutions Oy) develops and
operates modern production systems and supply
chain processes providing its customers with measur-
able added value and constant improvement of their
processes. The enterprise generates renewal, growth,
and higher performance in industrial ecosystems
oering project management, production and supply
chain expertise, among other services. The company
was founded in 2012 and the actual operation started
in 2013. At present, the main customer segments
involve companies in construction, maritime and
production industries.
Carinafour’s role in the project was to carry out
research on the customer needs related to new
products and services as well as to explore the
requirements for the creation of a new type of digital
platform. During the project implementation, Cari-
nafour deepened the knowledge of the needs and
requirements, whereby new products were created
for the product portfolio and the main customer
segments were analyzed in detail. Another important
result in the project was the verication and assess-
ment of the customer value added of the products
and services. Furthermore, as a result from the
product development, need for new business models
became evident. Therefore, during the project
implementation, the company worked with business
model development, which further supported the
initial aim set for the research project.
To mention a few examples, Carinafour developed
the following services during the project implemen-
tation: C4 Take-a-Grip and C4 Assembly and Logistics
Unit (ALU). C4 Take-a-Grip improves the transparency
and the management of the supply chain and manu-
facturing processes of the customers. C4 Assembly
and Logistics Unit (ALU) provides a solution for
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supply chain optimization and quality management
close to the production facilities of the customers.
ALU improves the material management during
production providing the assemblers with pre-assem-
bled material packages making sure that materials
are located at the right place at the right time. ALU
increases the transparency as well as improves the
quality and cost-eiciency of production processes
making the overall management eective.
Wiima Logistics Oy is an integrated supply chain
company specializing in complete logistics services,
known as 4PL logistics (fourth party logistics). The
4PL service oers the customer a full service for the
coordination and management of the supply chain.
The scope of services provided by the enterprise is
exible, and, in addition to the full-service coordi-
nation, the enterprise answers to smaller service
needs. Wiima Logistics is a global company with
oices in various countries in Europe and Asia as well
as in the U.S. Wiima Logistics started its operations
in 2010, and its customers represent dierent types
of companies in various industries, such as project
companies, product manufacturers, and import and
export resellers as well as pharmaceutical, bio, and
diagnostics companies.
The objective of the company in the project was to
develop a new type of service for the management of
project logistics. Based on existing customer needs,
the company developed a service concept called
project logistics management. The service integrates
various system interfaces, which enables the evalua-
tion of the overall project status of its customers from
the beginning to the end of the project, whereby the
control and management of the project signicantly
improve. Project logistics management provides new
types of tools and operation modes, transparency,
and performance predictability as well as value added
to the internal project management of the customer.
Additionally, the service contributes to smooth
project logistics management and improves the
cost-eiciency of the customers.
Europlan Engineering Oy is a project manage-
ment company that provides turn-key deliveries in
domestic and foreign shipyards. The turn-key supply
service oers the customers a complete turn-key
solution starting from planning and design to mate-
rial procurement, installations, and post-delivery
support. The company has strong in-house expertise,
focuses on cost-eective project management, and
collaborates with a large subcontracting network.
In addition to shipbuilding projects, the company
has carried out oating construction projects. The
company has operated in the market since 1990 and
has a wide customer base both in Finland and abroad.
The initial plan in DigiPro was to pilot new digital
solutions on a specic end customer case of
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Europlan. During the project implementation,
however, the project of the end customer was
delayed due to external reasons, and the initial
focus set for DigiPro changed. Because of the delays,
adjustments to the timing and setting of the pilotings
needed to be done, and Europlan’s piloting activities
could not be conducted as originally planned. Despite
the changes, Europlan continued to be involved in
DigiPro, providing as well as gaining important new
insights into customer problematics and needs as
well as the management of complex projects.
Sininen Polku Oy focuses on improving the produc-
tivity of its customers in several business areas.
The core business areas of improvement involve
supply chain management, quality management,
and IT systems. Additionally, the company provides
reporting solutions, data sourcing systems, opera-
tional eiciency improvement projects, and case-spe-
cic management consulting to its customers. The
company was founded in 2015 and has become a core
partner for companies in several industries.
In the DigiPro project the company accumulated
knowledge on customers that operate in complex
projects. In addition the company put eorts on
examining the prerequisites for and possibilities of
automatization of routine-like decisions that project
managers have to make.
Practical tools and processes
BUSINESS MODEL
DEVELOPMENT PROCESS
In companies, there is a longish tradition of using
the business model canvas and its derivatives in
building a visual representation of the business
model canvas. It is an excellent tool for creating
an easily accessible one-sheet visualization of
the company’s business model. Furthermore, the
value proposition canvas provides a deeper under-
standing of the customer needs and the value prop-
osition oerings in regard to that need.
While the business model canvas is an excellent
tool for understanding the business model of a
company, it is not very useful for the strategic
planning or management of the company’s busi-
ness model. To understand the potential changes
in the company business model, the value prop-
osition canvas can be used to map out dierent
current and potential customers and their needs.
This provides the management some clues as to the
dierent needs the dierent customers may have.
To evaluate a business model in regard to poten-
tial changes in the long term and building under-
standing on the potential changes needed—or even
changes in the business model that would enable
the company to become a disruptive force itself in
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a market—business model development must be tied
to the process of understanding the disruptive forces
in the market and mapping the potential futures for
the industry. Our suggestion as a practical, dynamic
disruptive business model development process
consists of the three following steps: (1) identifying
industry change drivers and disruptive forces, (2)
evaluating how the changes will aect the business
model, and (3) mapping the optimal business model
to drive the disruption.
There are numerous tools for evaluating and envi-
sioning future changes in industries, such as Delphi,
scenario workshops, SWOT, and PESTE. The tool
itself is not important, but building an accurate under-
standing of the possible futures in the industry is. The
more realistic the results are, the better the company
can prepare itself for the coming changes.
Key to future success in a turbulent business environ-
ment is the ability to evaluate the eects that future
changes will have on the current business model. In
Figure 5, changes have been drawn from ve digital
technologies that are currently changing the business
environment. These forces are valid for almost all
industries, but the actual disruptive forces have to be
mapped individually for each company.
FIGURE 5.
MATRIX OF BUSINESS
MODEL CHANGE
AND FORCES OF
DISRUPTION
Eects of big data
Eects of new hardware
Eects of cloud services
Eects of connectivity
Eects of algorithms
New capabilities
New cost
structures
New oerings
New processes
New partnerships
New technology
New customers
New channels
New customer
relationships
New revenue
models
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The third step in the process is to nd the optimal
business model conguration for the company
to endure or even thrive in the changing business
environment. For this the company needs to have a
thorough understanding of the forces changing the
industry, a clear vision as to how these changes will
aect the current business model of the company,
and the courage to dene a business model that
can challenge the existing modus operandi in
the industry.
PROJECT ALLIANCE
PARTNER SELECTION
The empirical examination of partner selection in
infrastructure projects in Finland led to the identi-
cation of a number of factors. The frame is intended
to serve as a benchmark for developing the project
alliance partner selection process. The selection
factors that have proven to serve the examined rms
well can be arranged as shown in Table 1 on the
next page.
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TECHNICAL FACTORS
TECHNICAL CAPABILITY
KNOWLEDGE-BASED CAPABILITY
RESOURCES AND SIZE
PREVIOUS REFERENCES
TO MEET PROJECT REQUIREMENTS
PROJECT ALLIANCE-SPECIFIC FACTORS
ALLIANCE CAPABILITY
KNOWLEDGE SHARING
WILLINGNESS AND COMMITMENT
TO ALLIANCE PROJECT
ALLYING WITH THE WINNING TEAM
PARTNER NOVELTY
PARTNER FIT-RELATED SELECTION FACTORS
STRATEGIC FIT
COMPANY CULTURE
TRUST & REPUTATION
PEOPLE
PREVIOUS RELATIONSHIP
TABLE 1. SELECTION
FACTORS OF THE
EXAMINED FIRMS
KEY QUESTIONS
Is there a match between the competences of the
prospective partner and those required in the project?
Does the prospect have knowledge or experience of
a similar kind of project?
Are the prospective partner’s resource endowments credible?
Can the partner assign an A-level team to the project?
Does the prospect have experts with previous project
alliance experience and relevant references?
KEY QUESTIONS
Is the prospect able to perform in alliance projects?
Is the prospect able to communicate productively
in planning workshops?
Is the prospect able to allocate best experts’ time
to the alliance project and uncertain bidding process?
What is the client’s perception of the prospective partner?
How novel is the prospect to us?
KEY QUESTIONS
What is the t between us and the prospect
beyond the alliance bid at hand?
How open is the prospect to sharing information?
What is our evaluation of the prospect’s reputation
and trustworthiness?
Are the prospective partner rm’s employees
able to contribute?
Does the prospect have a track record of earlier successful
collaboration and/or earlier bidding processes?
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// WHAT WE LEARNED ABOUT
// PARALLEL PROJECTS
5
Businesses need
to be able to take
time and look at the
big picture in order
to understand the
underlying change
factors.
Parallel projects are the favored collaboration tool
for universities and companies by the co-nancer
Business Finland. From the university perspective
it is a research tool very dierent from the previous
model, in which companies participated in research
projects mainly as research objects and bene-
ciaries of the results by providing 10% of the funding
for the projects. In the parallel project model, the
universities and companies have their own inde-
pendent research or R&D projects that are united by
a mutual project plan. Since the beginning of 2018,
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these kinds of co-innovation projects are the only
source of major research funding for universities
from Business Finland.
The long-term vision of the parallel project model is
to get research benet businesses better and to inte-
grate actual business problems better with research.
That is a valid objective that will benet both
companies and universities in the long run. There is
a discrepancy between the speed at which compa-
nies and research institutes operate, and the parallel
project model pushes both parties to improve their
operations. Universities need to do basic research,
but they also need to develop tools for providing
applied research at a much faster pace to provide
results that are relevant in the fast-changing busi-
ness environment to benet companies. Alterna-
tively, businesses need to be able to take time and
look at the big picture in order to understand the
underlying change factors in their business, and
universities can provide tools for that.
DigiPro was one of the pilot projects for university–
business collaboration in the co-innovation model.
All the companies had very little experience with this
kind of multi-partner collaboration projects before-
hand. Although the project was very well planned,
and the structure stayed very stable throughout the
project, the importance of the project preparation
phase must be emphasized. A parallel project means
that all project partners have their own projects
in addition to the responsibilities coming from
the overall project. These responsibilities and the
benets received from the parallel structure have to
be very well communicated and understood before
the project begins. The better the preparation phase
is performed, the more smoothly the actual project
will run. It is particularly important to set the shared
objectives of the project in such a way that is accept-
able to all partners. Also, the partner roles in the
overall project need to be addressed thoroughly
before the project begins.
The aspect of time is another critical issue. A parallel
project structure requires all projects to begin at
the same time. Aligning the company schedules and
research schedules together is a demanding task.
The actual beginning of the project should be set
far out enough so that project partners can commit
to it. Our experience suggests a six-to-nine-month
period for preparation activities before beginning
the project. During this period it is crucial to collabo-
rate between the partners but also with Business
Finland experts to ensure that the preparation is
done properly and that the project is also possible
from the funding perspective.
The project plan for the overall project must be
ambitious and clear, but it also has to be exible
enough to allow for changes during the project.
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It is impossible that all partners of a parallel project
will stay the same and be able to fulll their indi-
vidual projects exactly as planned. Although Busi-
ness Finland-funded projects very oen reach the
objectives set for them, the actual manner in which
the results are reached is seldom the one set forth in
the project plan. In a parallel project these changes
in actual project activities are multiplied by the
number of project participants, and therefore ex-
ibility in the project activities is essential. From the
university point of view this means that the core of
the research agenda needs to be solid even though
the actual collection of the empirical material can
change during the project. For companies, the input
they provide for the overall project and the gains
they expect from the project should be clear from
the beginning although the actual manner in which
these inputs and gains are provided can change. To
succeed, a parallel project must prepare for these
“hiccups.” There can be minor and even major
events that change the individual projects’ courses,
and the whole parallel project consortium must
have tools to address these issues.
Considering the high demands of successful parallel
projects, DigiPro succeeded well. The project
consortium was very committed to the mutual
project, and even though there were several unex-
pected events that aected the individual projects,
the overall project could be continued and nished.
The companies were mostly very successful with
their own projects, and both universities reached
their goals research-wise. However, the prelimi-
nary vision of an actual co-founded new project for
international markets could not be built. During the
project this was quickly understood as this kind of
collaboration would require deep integration and
a very high level of trust between the project part-
ners—and even though the project companies had
had some previous collaboration before DigiPro,
they were far from the intimacy required for a
mutual product for international markets. Despite
this, the project was far from a failure. The company
projects yielded many new growth opportunities
that were realized during the project. The research
unveiled new understandings on business models in
project industry and the managerial myopia that is
present in stagnant industries such as maritime and
construction.
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// CONCLUSIONS
6
The prospective
customers who are
industry insiders
view the situation
dierently than
service providers
outside the
industries.
Overall, the project activities revolved more around
customer need than was originally planned. The
participating companies voiced over and over again
the need to focus more on the understanding of
customer needs. Due to the signicance of the
issue, the project plan was recalibrated to give more
weight to the customer understanding. Hence, the
project involved initial customer interviews, an
examination of the customer need as part of busi-
ness model iteration, an examination of the utili-
zation of customer insight, and nally the project
manager survey.
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The participating companies’ need to focus a great
deal on customer needs reects their orienta-
tion toward the market. The companies in ques-
tion understand the importance of the customers’
perspective. It is also linked to the complexity of the
digitally enabled service solution. In addition to the
actual features of the service, it is important to know
what the most valuable aspect for the customer
is. Finally, it also reects the phase in which the
companies are at. Hence, the ndings from the
project are the most valuable for SMEs operating
in a rather similar development phase, where the
operations have gotten o to a good start, and the
company is able to put eort into business develop-
ment through the carefully planned development of
service-based solutions.
In addition, the problem of prospective customers’
unawareness of the potential to develop their oper-
ations was another common theme. This is a more
challenging issue to tackle. The project manager
survey shows that the prospective customers who
are industry insiders (in the maritime and construc-
tion industries) view the situation dierently than
service providers outside the industries. Industry
outsiders appear to be better able to critically eval-
uate the processes and the operating models that
dominate in an industry and hence see the potential
for improvement.
One way to address this challenge is through accu-
mulating customer insight in a dialogical process.
In this process there is the possibility of gently
educating the prospective customer. However,
it is a costly and relatively slow process for
advancing benchmarking and knowledge transfer
across industries.
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// REFERENCES
– Airola, M. & Heikkinen, M. (2013) Askelmerkkejä
allianssimuotoiseen yhteistyöhön. VTT Technology.
Espoo, Finland.
– Barbosa, Filipe, Woetzel, Jonathan, Mischke, Jan,
Joao Ribeirinho, Maria, Sridhar, Mukund, Parsons,
Matthew, Bertram, Nick, & Brown, Stephanie (2017)
Reinventing construction through a productivity
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– Bowersox, Donald J., Closs, David J., & Drayer,
Ralph W. (2005) The Digital transformation: Tech-
nology and beyond. Supply Chain Management
Review, January/February.
– Chiesa, V. & Frattini, F. (2011) Commercializing
technological innovation: Learning from failures in
high-tech markets. Journal of Product Innovation
Management, 28(4), 437–454.
– Lindell, T. (2018) Improving knowledge sharing via
digitalization – Case: Vt 6 TaaLa. Master’s Thesis,
Lappeenranta University of Technology.
– Ojala, A., Evers, N., & Rialp, A. (2018) Extending
the international new venture phenomenon to
digital platform providers: A longitudinal case study.
Journal of World Business, 53(5), 725–739.
– Pritchard, Robert D. (1995) Productivity measure-
ment and improvement. Praeger, Westport, CT.
– Sandberg, B. & Aarikka-Stenroos, L. (2014) What
makes it so diicult? A systematic review on barriers
to radical innovation. Industrial Marketing Manage-
ment, 43, 1293–1305.
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// APPENDIX 1
Published papers
– Eriksson, Taina & Atkova, Irina (2017) Contex-
tual implications for business model innovation in
start-ups. McGill conference, Galway, Ireland.
– Rissanen, Tommi & Karhu, Päivi (2017) New organi-
zational forms of innovation: What is business model
ambidexterity? ISPIM Innovation Summit confer-
ence, Melbourne, Australia.
– Asemokha, Agnes, Musona, Jackson, & Torkkeli,
Lasse (2018) Corporate environmental orientation
and SME international performance: The role of
business model innovation. AIB-UK conference,
Birmingham, UK.
– Rissanen, Tommi, Asemokha, Agnes, Torkkeli,
Lasse, & Saarenketo, Sami (2018) Business model
experimentation with internationalizing SMEs:
Evidence from Finland. McGill conference, Halmstad,
Sweden.
– Eriksson, Taina, Vahlo, Jukka, Rissanen, Tommi,
& Koponen, Aki (2018) Management myopia and
project management – insiders vs outsiders. ISPIM
Connects Fukuoka conference, Fukuoka, Japan.
– Aro, Elisa (2018) A case study on the commer-
cialisation of digital technology. EIBA conference,
Poznań, Poland.
Papers waiting to be published
– Rissanen Tommi, Ermolaeva, Liubov, Torkkeli,
Lasse, Ahi, Ali, & Saarenketo, Sami (2019) The role of
home market context in business model change in
internationalizing SMEs. European Business Review.
– Bruun, Robert, Eriksson, Taina, & Rusanen, Helena
(submitted) Towards better project performance –
Partner selection in project alliances. Submitted to
Long Range Planning.
– Aro, Elisa (to be submitted) Insights into commer-
cialising digital technologies – Evidence from the
maritime industry in Finland and Denmark.
Poster presentation
– Eriksson, Taina, Kalliomäki, Helka, Saarni, Jouni,
& Saurama, Antti (2018) Strategizing knowledge
transfer – The case of business studies. University
Industry Interaction conference, London, UK.
– Aro, Elisa & Haaja, Eini (2018) Why the collaborative
development of a digital solution fails? A case study
viewed through opportunity recognition and mental
image concepts. EIBA conference, Poznań, Poland.
Practical papers
– Rissanen Tommi & Koponen, Aki (2018) How to
disrupt your business and make it great again. ISPIM
Connects Fukuoka conference, Fukuoka, Japan.
