How Finland Is Embracing Digital Transformation

How Finland is embracing
digital transformation
Digital challenges
and success showcased
How Finland is embracing digital transformation – Digital challenges and successes showcased 1
Contents
Foreword 3
What is the digital state of the nation? 6
What did our study show? 9
Why go digital? 11
At the heart of business strategy 12
How to create greater value 14
How does digital impact business? 17
What ways is digitalization being implemented? 19

Engaging customers is most important 22
How transforming products and services ranks 24
Views differ on the importance of optimizing operations 26
Empowering employees is a priority 28
How are businesses implementing

digital transformation? 31
How to create the right culture 32
How to ensure success 34
The challenge of finding top talent 36
Making the most of external insights 36
Which emerging technologies and future skills are crucial? 40
Conclusions 44
Contributors 47
2 How Finland is embracing digital transformation – Digital challenges and successes showcased
Foreword
We live in exciting times. Never before That said, only interconnected data will
has the digital economy promised so deliver the enhanced experience custom-
much to so many. Numerous studies ers expect. This will also lead to the
confirm that Finland is well-placed to productive workplace our modern
unlock this huge potential. We rank highly workers demand, the optimal processes
on digital readiness, usage of cloud our business needs to stay competitive,
computing services in enterprises and and the new ideas we need to disrupt our
digital economy competitiveness. For a industries.
country set to celebrate its centenary, our
state of digital readiness is yet another It’s hardly surprising then that CEOs
reason to be proud. believe that technology will transform
their business more than any other global
But what exactly are the elements that trend1. Digital leaders outperform their
make Finland so ready to reap the peers in every industry2, and most global
rewards of digitalization? Well, as a result CEOs consider ‘digital’ their number one
of high broad-band connectivity and priority3. To understand how Finland is
citizens’ digital literacy, Finnish businesses performing in the fast-moving digital era,
and public organizations have a head together with PwC we invited C-level
start developing digital strategies and leaders from leading organizations in
driving digital transformation in business- Finland to share their views and insights
es and society. As consumers, customers on what their organization is doing to
and users of public services, we’ve also reimagine the future.
come to expect products and services to
be digitally available 24/7 – and safe. We hope their vision, ideas and actions
will help you navigate your own digital
The transparent and secure way in which journey. Together, with bold ambitions
personal data is managed is also crucial and actions, we believe we can shape
for building people’s trust in the digital Finland for a successful century ahead.
world. This ever-increasing amount of
data, generated and harnessed, is a
priceless asset for many organizations.
pekka horo
general manager
microsoft oy
1
PwC, Global Digital IQ® Survey: 10th anniversary edition, 2017
2
MIT, Embracing digital technology: A new strategic imperative, 2014
3
PwC, 20th Annual Global CEO Survey, 2017
To make the most of digital
opportunities and turn them
into tangible business oppor-
tunities, you need to apply
a truly holistic approach.
All the top performers in the digital-first era get their assets and
capabilities – data, technology, processes, organization and talent
– working in perfect harmony for the customer.
In short, to win at digital, you need to develop the perfect

combination of these elements for your business ecosystem.
Did you know?
of organizations give digital
86% transformation a high strategic

importance.
But only...
of companies rate the importance of companies utilize their

83% of digital in enhancing customer
engagement high or very high.
12% customer data to a very
high degree.
Discover the strengths and
opportunities that digital can
offer Finnish organizations
by reading on.
What is the digital
state of the nation?
There’s a lot to be learned from how Finnish organizations
apply the concept and approaches of digital transformation
in their visions and agendas. Here’s why.
Studies have shown that CEOs believe that one thing
#3 According to the European

will transform their business more than any other global
trend: technology. And they’re right. Digital leaders
outperform their peers in every industry, which is why
most global CEOs consider ‘digital’ their number one Commission, Finland is the third most
priority. As Finnair CDO, Katri Harra-Salonen said when advanced European country in the
interviewed for this study, “Who is on-board the digital
team? – Everyone.” digitalization of businesses.
The facts speak for themselves: digital is taking over. To put the study into context, we invited executives and
According to the European Commission’s Digital managers from the top-100 Finnish enterprises to assess
Economy and Society Index (DESI), Finland is the third their Digital IQ with a 2016 PwC global benchmark tool.
most advanced European country in the digitalization
The tool allows the comparison of certain digital
of businesses, after Denmark and Ireland (www.ec.
dimensions to a benchmark of global top performers.
europa.eu/digital-single-market/en/desi).
We define the global top performers as firms with profit
margins greater than 5%. They must also have profit
So, how exactly is digital changing business in Finland?
growth over the past three years greater than 5% and
In this study, we set out to discover how the leading
expected revenue growth over the next three years of
Finnish organizations and their highest-level executives
5%. The benchmark is based on research showing that
define ‘digital’ and how they see its importance and
organizations with a higher Digital IQ Score are more
positioning when it comes to their strategic objectives.
likely to enjoy faster revenue growth and wider profit
We look at whether executives see digital as a key lever
margins.
in competition against rivals, improving and developing
their current core businesses, or building the business The average Digital IQ in Finland, as assessed by 104
of tomorrow and targeting new business areas. Finally, respondents from 47 organizations, is 69.6. The global
we examine the priorities and capabilities of these top performers, on the other hand, have an average
leading organizations in their digital transformation Digital IQ of 85.9. Needless to say, it appears that the
journey. Finnish top-100 enterprises still have a way to go before
fully embracing digital. But not all of them -- 15% of the
participating organizations surpassed the top perform-
er benchmark Digital IQ. Keeping in mind that the
benchmark responses are individual and subjective
Businesses with high Digital views from different levels within the organizations,
IQ Score are likely to enjoy these results represent the variation that exists amongst
organizations. There are differences in how each
faster revenue growth and organization handles digital development, and how
wider profit margins. initiatives are both run and communicated throughout
them.
What’s more, the results give powerful insight into the
most common strengths and weaknesses that Finnish
organizations exhibit in their approaches and strategies
regarding digital transformation.
15% of Finnish organizations reach

Top Performer level in Global Digital IQ
benchmark.
Digital IQ benchmark results Finnish Digital IQ responses Finnish average Global top performers’ average
Our CEO is a champion for digital
The executive(s) responsible for digital are

involved in setting high−level business strategy
Business−aligned digital strategy is agreed
upon and shared at the C−level
Business and digital strategy are well
communicated enterprise−wide
We actively engage with external sources to gather
new ideas for applying emerging technologies
Digital enterprise investments are made p
rimarily
for competitive advantage
We effectively utilize all the data we capture to
drive business value
We proactively evaluate and plan for security and
privacy risks in digital enterprise projects
We have a single, multi−year digital e nterprise
roadmap that includes business and processes as
well as digital and IT components
We consistently measure outcomes f rom our digital
enterprise investments
Strongly Disagree Neither agree Agree Strongly

disagree or disagree agree
The largest gaps, as seen through the benchmark

results, emerge in
1. the clarity and communication of digital strategy and
The most urgent development
vision throughout the organization, areas in digital business
2. the use of data in a comprehensive way to drive environments are strategy
business value, and communication, data utilization,
3. the measurement of the outcome value from invest- and outcome validation.
ments in digital.
Thankfully, Finnish organizations are doing very well in

some areas. They are almost on par with the global top
performers in engaging external sources for ideas for
applying emerging technologies. And when it comes to
involving their digital champions in setting their overall
strategic direction, Finnish organizations are almost
equal to the globe’s top performers. As Marco Ryan,
Chief Digital Officer of Wärtsilä says, “A top-down
approach will lead to failure. Digital needs to be inborn in
the heart of the organization.”
What did our
study show?
We invited 22 inspiring Finnish Digital transformation has often been studied on a
practical level, but we wanted to better understand
organizations to help us discov- how business executives address the challenges in a
er the digital state of the nation in variety of other areas. Prior PwC research has shown
that in the last 10 years, the view businesses have on
2017. To better understand their what is ‘digital’ has changed dramatically. Previously,
approach to digital transformation, most organizations considered digital as synonymous
with IT, while today’s view is more diverse: the concept
we sat down with corporate exec- of ‘digital’ includes established technologies, new ways
utives from 17 enterprises and 5 of working, innovation, decision-making and the
transformation of organizational strategies and cul-
public sector organizations. In these tures.
discussions, we examined their ap- To really get into the digital mindset of different
proach to digital transformation organizations, we targeted a wide spectrum of indus-
from three key viewpoints: Why, tries, ranging from the traditional, such as manufactur-
ing, to the inherently digital, like media and entertain-
What and How. ment. The organizations we interviewed are all
significant players, both in their respective industries
and Finland as a whole, and each has the expressed
desire and adequate resources to transform their
businesses and functions for the coming digital era.
Enterprises Public organizations
Finnair OP UPM Aalto-yliopisto
Fortum Outotec Veho D9
Kemira Posti Veikkaus Tampere3
Kone Sanoma VR Turun kaupunki
Lassila & Tikanoja SOK Wärtsilä Verohallinto
LähiTapiola Stora Enso
Media &
Entertainment
Public Sector
Financial Services
Forest & Lumber Industry split
Wholesale & Industry &

Retail Manufacturing
Energy &
Recycling
Transport
We approached executives at the very highest

levels of the organizations to understand the drive
Director
towards digital-first from a strategic viewpoint.
While most Finnish companies have a C-suite
25%
CxO
executive responsible for digital transformation, 54%
the main drivers for digital in some organizations
were seated as VPs or directors of a separate Interviewee
development unit. titles
xVP
21%
Why go digital?
How important do the leading organi-
zations consider digital to be and what
impacts do they expect it to have in 25% see digital
transformation as almost
the near future? synonymous with technology.
To kick off the discussions, we asked the executives how

their organizations define ‘digital’. To our surprise, the
definitions were polarized – one in four saw digital as
nearly synonymous with technology or only related to
investments in IT, whereas almost half saw it as a holistic
business development mindset and an organizational
culture rather than a set of concrete activities.
Kristiina Söderholm, Fortum Digitalization Develop-

ment Lead said, “For us, digitalization means adopting
the right tools for business development, innovation and
cultural evolution. We want to bring the ownership of
initiatives to the business units.”
Some organizations define digital as encompassing all

customer-related activities, while others expressed that
the term has lost its meaning, and is now in effect an
overused hype word to describe all kinds of develop-
ment initiatives.
44%
perceive digital as
a holistic business
development
mindset.
At the heart of business strategy
86% of organizations give

No matter how they define it, almost every enterprise
had addressed digital transformation in their strategies.
Alternatively, they’d deliberately emphasized its
importance by leaving the term out of the formalized digital transformation a high
agenda, as they see it as a vital part of everything they strategic importance.
do. Only three of the enterprises didn’t see digital
transformation as a key driving point in their agenda.
Interestingly, compared to the enterprises, the public
sector respondents gave greater emphasis to the key
role digital transformation plays. This clearly showed
how the cultural shift to digital-first does not only affect
industry silos but society as a whole.
Digital Transformation importance
%
60 Enterprises
47
40 35 Public sector
18
Not Less Important Very Most
important important important important
Q: How important is digital transformation on the organization agenda?
Case study
Wärtsilä
Transformation Importance
Wärtsilä sees digitalization as a fundamental driver About Wärtsilä
across every aspect of the company from strategy to Wärtsilä is a global leader in advanced technolo-
operations. Digital is at the heart of everything Wärtsilä gies and complete lifecycle solutions for the
does and it is the key enabler and driver of Wärtsilä’s marine and energy markets. By emphasising
new strategy. Thus, digital will have an ever-increasing sustainable innovation and total efficiency,
impact in Wärtsilä’s processes, technology and culture Wärtsilä maximises the environmental and
in the future. economic performance of the vessels and power
plants of its customers.
However,
digital is not a Source: Company’s web page
new phe-
nomenon for
Wärtsilä: the
“
company has Wärtsilä has also made multiple other impactful
vast reposito- investments to inject digital into the organizational
In Wärtsilä, every
ries of data it DNA. The company has recently launched plans to
generation reinvents has collected build four acceleration centers across the globe; they
itself. and stored conduct hackathons, workshops, seminars, different
over the past learning and development programs and internal
marco ryan 15-year certifications to embed digital into the mindset of all
period. Now employees. As a concrete example of the magnitude of
Wärtsilä looks these initiatives, Wärtsilä launched their digital agenda
to put these internally in a 500-person event with participants from
data assets into work by breaking down silos in which the C-suite through middle management to specialist
the data has been historically stored, and driving, accel- levels, representing all their businesses and geogra-
erating and scaling the utilization of data to coordinate phies.
the enterprise into a common, clear direction. This is
why Wärtsilä has established a central digital organiza- Wärtsilä acknowledges that the only way to succeed in
tion to set the common digital agenda and coordinate a holistic transformation is through the empowerment
the digital activities within and across different business of the people that essentially make the organization
divisions. In the divisions, there is a strong will and what it is. If the change is led as a top-down, given
passion to unleash the potential currently hiding in the initiative, the only possible outcome is a total failure.
repositories.
How to create greater value enterprises plan to come up with new, innovative ways
Next, we asked which business areas would create the of resolving their customers’ problems, enabling them
most value through digital transformation within the to beat the incumbents in their own backyard.
next couple of years. Do they expect to accelerate their
core business, branch out or create new businesses by As Raimo Mäenpää, CIO of SOK said, “Digitalization is a
completely reinventing business models? means and a tool, not an end goal. It is, however, a
terrific and versatile tool to gain competitive edge in the
Thanks to the perception that digitalization blurs the retail industry.”
lines of traditional industries, digitalization is seen as a
way to develop new businesses. It also raises interesting This pronounced disruptive impact is expected in new
questions about their motives: What encourages business areas, with 11 enterprises seeing the potential
enterprises to enter a new business, where they must be of digital transformation as high or very high. However,
competitive against a set of experienced incumbents? not all of them were on board with expansion. A
The rationale is that with the help of digitalization, the number of enterprises don’t see their transformation
What encourages enterprises
“ We can no longer expect a 95%

accuracy of our vision, but hope
for something like 60%.
to enter a new business, where
they must be competitive
against a set of experienced
incumbents?
harri nummela
op
Impact on new businesses
% 70% of enterprises
look to corner new
business areas through
Enterprises digitalization.
50
38 Public sector
31
25 25
19
13
Not at all Low Some High Very high
degree degree degree degree
Q: To what degree do you expect Digital Transformation to impact business areas new to you
in the following 24 months?
entailing new businesses, and prefer to focus on their ties and plans to focus on developing and optimizing
current portfolio instead. their current operations.
With one interviewed public organization declining to As well as developing new businesses, digitalization is
give a response, three out of four of the respondents seen as equally impactful on the organizations’ core
saw the impact in new business areas to be high or very businesses or functions. Many of the respondents see
high. They recognized the opportunities to broaden or digitally-enabled value opportunities within their
even redefine their current societal role. That said, one existing business portfolio. 12 out of the 17 enterprises
respondent didn’t recognize significant new opportuni- evaluated that this effect will be to a high or very high
Impact on core business
% 70% of enterprises
expect digitalization
will impact their core
Enterprises business to a high degree
40 41 40 Public sector
within two years.
29 29
20

Q: To what degree do you expect Digital Transformation to impact your core business
in the following 24 months?
Impact on adjacent business areas
% Many organizations
are looking to augment
their core offering by
introducing digital value-
Enterprises adding services to their
33
38
33 33 Public sector portfolio.
25 25
13
Q: To what degree do you expect Digital Transformation to impact your adjacent business
areas in the following 24 months?
Case study
Verohallinto
Business Focus
Verohallinto, The Finnish Tax Administration (FTA) is by About Verohallinto
and large the best known Finnish public authority and The Tax Administration collects the majority
probably also the most advanced one in leveraging of Finnish taxes and tax-like charges. Proactive
digital technologies to fulfill its mission. FTA has nearly guidance, excellent service and credible tax
two decades of history in digitalization and is currently control ensure the accrual of tax revenues.
in the process of executing the third wave of digitaliza- The goal is to have customers handle tax-related
tion, serving individuals and organizations tributary to transactions independently and in the correct
the State of Finland already with an automatization manner.
level of 80% in all their operations.
Source: Organisation’s web page
All digital development activity derives from the FTA
mission to ensure the state receives all tax revenues set
by the legislation. Automating the operations has
delivered benefits to FTA in two fronts: on one side, it
has increased the operational efficiency by reducing the
need for manual work, and on the other side, it has also
increased the total tax revenues. The rationale for the
latter one is straightforward: by introducing easy to use,
“
easily accessible and intuitive digital interfaces for
people to fill in their tax returns, the better are the
quality and completeness of the data in the forms. For us, digital strategy is
monitoring and reacting to
As the world is changing and markets are becoming changes in the surrounding
global, they pose new types of challenges also to the environment.
tax authorities. How to ensure tax revenue streams from
all international online players? How will the banking markku heikura
ecosystem evolve? How will blockchain affect payments
and other transaction mechanisms? What will be the
impact of platform economy in collecting taxes?
These questions will have a big impact on the shape of

the overall FTA strategy, which is highly driven, enabled
by and dependent on digital technologies. Volumes
that are on the table are out of the scale for others;
even 5% of the total taxation volume amounts to 3.5
billion euros.
degree, underlining the expectations of disruption How does digital impact business?
often associated with the rise of the digital-first era. In line with the expected impact on core business areas,
Similarly, three out of five public organizations identi- executives see gaining efficiencies through digital
fied opportunities to impact their core functions transformation as the most promising strategic goal.
through digitalization, while the rest saw that there will Most of the enterprises also see sustaining current
be at least some degree of impact. market position as an important driver for digital
transformation. Many of them said they’re looking to
Adding adjacent business areas to their core current transform their business to keep up with competition.
business is considered a logical first step among the
respondents. All but two enterprises expect digital to The desire to streamline current functions is even more
provide openings to augment their core offerings in pronounced in the public sector, where many organiza-
the near future, and thus a possibility for digitalization tions find it difficult to significantly increase resources.
to generate at least ‘some degree’ of impact on the Instead, they focus on improving their efficiency in the
enterprise’s bottom-line. The enterprises that recognize near future. This is reflected in the emphasis they give
a high to very high potential in adjacent business areas digitalization when it comes to remaining relevant.
mainly operate in B2C industries, where additional
services provide a greater opportunity for new revenue
streams.
Marco Ryan of Wärtsilä put it like this: “Digital transfor-

mation is about amplification of our core competencies,
augmenting into new areas and accelerating the speed
of doing so.”
As for public sector organizations, several identified

adjacent areas within their responsibilities. The re-
sponses were distributed evenly from low to high,
indicating that while there may not be obvious adja-
cencies in their roles in society, the organizations are
keeping their eyes open.
Lever in gaining efficiencies
90% of organizations %
expect to leverage
digitalization in making
their operations more 59 60 Enterprises
efficient within two years. 40

29
Public sector
12
Q: To what degree is Digital Transformation a key lever to gain efficiencies in running your
business within the following 24 months?
Even though new business areas were seen as nearly as
60% of organizations prioritize

promising as core business development, growth
generation was the least pronounced out of the three
objectives explored. Still, 10 out of the 17 enterprises do
expect to broaden the existing revenue streams and digitalization over traditional means in
open up significant new ones through digital transfor-
mation. The emphasis on optimizing current operations search of growth within the next two
is heavier in the public sector, where two out of five years.
respondents expect growth generation to be a factor
to only a low degree.
Lever in defending market position
%
80% of
80
65
Enterprises
Public sector
organizations expect
6 18 20 digitalization to be a key
12
lever in defending their
degree degree degree degree current market position.
Q: To what degree is Digital Transformation a key lever to stay relevant and sustain your
current market position within the following 24 months?
Lever in generating growth
%
Enterprises
40 41 40 Public sector
35
6 18 20

Q: To what degree is Digital Transformation a key lever to generate significant growth within
the following 24 months?
What ways is digitalization
being implemented?
Which digital levers are Finnish organizations using?
Let’s look at the digital-powered business initiatives
through four lenses of digitalization.
We already know that digital transformation is the top

priority and key enabler in the near future. So then,
what are the key areas and initiatives that top execu-
tives are focusing on to prepare their businesses for the
coming era of digital-first? To understand what the
enterprises and organizations see as the most import-
ant goals, we look at their approaches through the four
lenses of digital transformation: engaging customers, DIGITAL
transforming products and services, optimizing opera- TRANSFORMATION
tions, and empowering employees. This framework
gives us a coherent, industry-independent view of how
the organizations prioritize their actions.
It’s creating deeper customer relationships you can focus more on business growth and spend
Digitalization has completely changed how businesses fewer hours on operations that technology can support.
connect with customers. These days customers expect
a closer digital relationship than ever before. Conse- In Kristiina Söderholm of Fortum’s own words, “We
quently, with constant, personalized interactions, believe that giving ownership of their own work to the
companies can build loyal, profitable customer rela- people themselves will both boost efficiency and make
tionships. the work more meaningful.”
As Mikko Vastela, CIO of LähiTapiola says, “Digital

customers are like bees, bouncing from flower to flower.
The digital channel is vital as a hygienic factor – the
complete service experience is key.”
It’s empowering employees to work better

Employees need to be able to do their best work from
anywhere, at any time, on any device. When you
empower your employees with everyday technology,
Engaging Customers Transforming Products and

1. Harness data for a complete view on Services
the customer journey 1. Utilize data to shift from hindsight
to foresight
2. Draw actionable customer insights MOSTLY EXTERNAL
2. Disrupt with new business models,
3. Deliver personalized, differentiated
products and services
customer experiences
3. Differentiate and capture new
revenue opportunities
MOSTLY PEOPLE DIGITAL MOSTLY AGILITY

TRANSFORMATION
Empowering Employees Optimizing Operations

1. Protect your organization, data 1. Accelerate the responsiveness of
and people your business
2. Create a productive workplace to 2. Improve service levels and reduce
embrace diverse workstyles – and get MOSTLY INTERNAL costs by moving processes from
things done anywhere analog to digital
3. Provide employees with insight to 3. Anticipate the future with intelligent
drive faster, better decisions processes
It’s transforming products and services There’s a big difference in this area between enterprises
By using digital content, companies can transform and public organizations: Enterprises emphasize the
products, services and business models. Consider this outward-looking areas of customer engagement and
– if every company were effectively a software or digital product and service development, while public organi-
company, how would the nature of their products and zations stress the importance of the internal areas of
their overall business model shift? Would their gross employee empowerment and operational efficiency.
margins shift from “things” to types of services This difference arises out of the leaders’ awareness of
delivered because of digital technology? their competitive landscape. Public organizations tend
to have less competition over customers, while provid-
It helps optimize operations ing an engaging customer experience and superior
value is key for enterprises in both the B2C and B2B
When you optimize your business by harnessing the
domains. This also enables the public organizations to
power of data, you can reshape relationships with
focus their efforts more on internal efficiency.
customers and providing unprecedented levels of
service. Service is continuously improved by gathering
data across a wide, dispersed set of endpoints, drawing
insights through advanced analytics, and then applying
this information to introduce continuous improve-
ments.
Assessing the priority of digital Enterprise Public sector

ranking ranking
3,8 4,4
Engaging Customers 1 3
3,5 4,1
Transforming Products and Services 2 4

3,9 4,6
Optimizing Operations 3 1
3,8 4,3
Empowering Employees
4 2
Not at all Very high degree
Engaging customers is most important
“
It’s no surprise that customer engagement stands out
as the most prominent area for enterprises to focus
on. Digital customers are like bees,
bouncing from flower to flower.
In fact, Reijo Karhinen, CEO of OP said, “The customer
The digital channel is vital as a
is at the centre of everything we do.”
hygienic factor – the complete
14 out of the 17 interviewed enterprises rate initiatives service experience is key.
in this area as a high or very high priority. The leading
executives are well aware that delivering a fluid, mikko vastela
engaging customer experience is vital in today’s
lähitapiola
competition for customers. While the majority of
public organizations gave customer engagement a
high priority, none of them gave this area the highest
priority. Customer-facing activities are on average
only the third most important digitalization factor in
60% of enterprises rate

the public sector.
enhancing customer engagement as

the number one priority in their digital
transformation journey.
Engaging customers Ranking
% 1 3
80
59 4,4 Enterprises
3,8 Public sector

20 24
6
12
Q: To what degree do you prioritize digital-enabled initiatives helping you to engage your
customers?
Case study
OP
Customer Engagement
There are few industries globally which face such a About OP
disruption as Financial Services. Not only is customer OP Financial Group is Finland’s largest financial
behaviour driving digitalization but also regulation is services group. It provides its customers with the
putting pressure on revamping the current business. best loyalty benefits and the most extensive and
diversified range of banking, investment and
OP addressed the disruption with its new strategy in insurance services. The Group has three business
2016, revolutionary by many accounts considering the segments: Banking, Non-Life Insurance, and
cooperative business model. Automating current Wealth Management.
business and building business around new digital
ecosystems are the cornerstones of their new strategy. Source: Company’s web page
The doubled development budget goes to show the
scale of change.
At the heart of the strategy is the customer experience,

which is now the most important measure of success. In
the past, customer focus meant focusing on sales
processes, while now development is centred on the
customer. Design thinking and providing an engaging
digital experience has become the cornerstones of
“
development. OP also values the physical channel, and
emphasizes the importance of developing the branch The customer is at the centre
into a meeting space.
of everything we do.
OP also wanted to take a step away from traditional
Financial Services culture by challenging the way it reijo karhinen
looks at customer data. OP is now taking the first steps
to proactively utilize the customer data in its possession
for improved and more targeted services.
OP has introduced agile development models and

renewed its group organization to support digitaliza-
tion. Like the majority of other companies in the
industry, OP is nevertheless slowed down by the legacy
of old systems. To change the mindset from the intrica-
cies of legacy solutions to the opportunities of new
businesses, OP wants to put even more emphasis on
developing the competencies and culture required in
the digital world.
How transforming products and services ranks
30%
The enterprises see transforming products and services
as the second highest priority, with many stating that
there’s no new product initiatives that, if not essentially
For of organizations
digital, do not at least include a digital component. transforming their products and services
to meet the needs of a digital-first world
Eetu Paloheimo of Veikkaus, for example, said, “Nothing
is taken into production, if it cannot be measured. This is is highest on the digitalization priority
imprinted in our development DNA. Moreover, every- agenda.
thing we do is based on hypotheses – if a hypothesis
turns out to be wrong, we have the mandate to kill the
feature.”
Much like customer engagement, 14 out of 17 enterpris-

es see product and service transformation as a high to
very high priority with many mentioning the shift from
products to a more holistic end-to-end value providing
approach as a possible direction for development.
The public sector responses were broadly distributed,

and this area was seen as the least significant part of
their digital transformation agenda.
Transforming products and services Ranking
% 2 4
4,1 Enterprises
53
29 3,5 Public sector

25 25 25 25
18
Q: To what degree do you prioritize digital-enabled initiatives helping you to transform your
products and services?
Case study
Veikkaus
Products and Services
The gaming and gambling industry has been in the About Veikkaus
midst of digital transformation already for years. In fact, Veikkaus operates all the gambling games that
in 2016, already almost half of Veikkaus’ revenues are offered in Finland. Veikkaus games are
streamed in via their online sales channels. Veikkaus has estimated to generate nearly one billion euros a
been a pioneer in developing digital applications as the year. The revenue is used for the benefit of Finnish
business environment and the consumer customer society in its entirety. Veikkaus’ beneficiaries are
behavior have evolved. active in the fields of culture, sports, science, and
youth work, social welfare and health, and the
Due to the nature of gambling business, customers equine industry.
must always be identified before any online gaming or
other interaction takes place. This provides Veikkaus Source: Organisation’s web page
with an unbeatable advantage of collecting extensive
repositories of customer data, which they also utilize
effectively.
On top of the data assets, digital development in

Veikkaus is powered by lean development models and
a start-up mindset of the people. The company has an
incredible speed of launching several new products to
“
the market on a weekly basis. Each of the new product
introductions is carefully monitored by predefined
business and customer experience metrics. Nothing is taken into production, if it
cannot be measured. This is imprinted
Beta and extensive A/B testing have been key compo-
nents of the product and service launch concept in our development DNA. Moreover,
already for a while. Recently Veikkaus has also em- everything we do is based on hypotheses
ployed multiple machine learning ‘agents’ to compete – if a hypothesis turns out to be wrong,
against each other in optimizing the personalized user we have the mandate to kill the feature.
experience delivered to the customer logging in to
their Veikkaus account. This optimization is a continu-
eetu paloheimo
ous process aiming to maximize the customer lifetime
value, instead of the value of single interactions.
The journey for Veikkaus to become a data-driven

organization has not been a walk in the park. Also for
Veikkaus, it took time to make the development
mindshift from strong individual influencer opinions to
believing that the truth resides in the data at the end of
the day. Nowadays, in product development, Veikkaus
have found the correct balance between knowing what
works and seeing what works.
Views differ on the importance
of optimizing operations
For enterprises, optimizing their operations is only the
For public organizations, improving
third highest priority. Although, 12 out of 17 enterprises operational efficiency through
said it has a high or very high priority. The most digitalization is the key factor in their
common discussion was around the field of robotics
and automation, with varying levels of success in transformation agendas.
ongoing initiatives. This shows how expectations have
evolved, with efficiency previously being considered
the area that could most benefit from digitalization.
However, for the public sector, improving efficiencies is

clearly still the most important potential benefit. Three
out of the five respondents gave this the highest
priority, putting it in the top spot of their agendas.
Optimizing operations Ranking
% 3 1
60 3,9 Enterprises
47
40
4,6 Public sector
6 24 24

Q: To what degree do you prioritize digital-enabled initiatives helping you to optimize your
operations?
Case study
S Group
Operational efficiency
Retail industry has been, without a doubt, one of the About SOK
front line industries in digitalization. As the largest S Group is a Finnish network of companies
retailers serve a customer base of millions – in other operating in the retail and service sectors. S
words, the whole population of Finland – and handle Group comprises the cooperatives and SOK
tens of thousands of different articles on a daily basis, Corporation along with its subsidiaries. The
technology provides an irreplaceable lever to efficiently purpose of S Group’s operations is to provide
handle the massive scale. Thus, IT-enabled operational co-op members with competitive services and
efficiency in improving supply chain management has benefits in a profitable manner.
been a focal point for retailers for decades.
Source: Company’s web page
S Group has been one of the leading players in this
field, winning market share in the declining overall
market during the past few years by applying a strategy
that has focused on lowering prices. This business
strategy has been mainly enabled through IT and
increasing the level of intelligent automatization in
goods handling and distribution operations overall.
In addition to offering more attractive pricing to
One of the most impressive examples of S Group’s consumer customers, digitalization enables the devel-
initiatives is the state-of-the-art logistics distribution opment and launch of completely new types of services
center, which is one of the largest and most modern for S Group. For example, once the huge quantities of
centers in Europe. The center operates with a high level data across different product segments have been
of automation and is tightly connected with the harmonized and enriched, consumers can be offered
logistics ERP solution to reduce process ‘waste’ with just-on-time product information in a completely
throughout the delivery chain from warehouse to new manner not only in mobile, but also in other
trucks and from trucks to store shelves. Moreover, channels and touchpoints.
S Group also pursues capturing unrealized digital
potential related to supply chain operations. The areas As the competition in Finnish retail market is constantly
from which they seek additional benefits include tightening and consumer demands are increasing,
utilization of data and analytics in planning, automati- digitalization will play a key role in sustaining and
zation of product lifecycle management and enhancing strengthening the market position of S Group in the
predictive analytics for store replenishment operations. future.
“ Digitalisation is a means and a tool, not

an end goal. It is, however, a terrific and
versatile tool to gain competitive edge in
the retail industry.
raimo mäenpää
Empowering employees is a priority
Employee empowerment divided the enterprises into
“
two groups: Nine respondents said it was either a high
or very high priority, while the other eight respondents
focused more on customer engagement and trans- We believe that giving ownership
forming their products and services. The most common of their own work to the people
initiatives include developing or adopting tools and themselves will both boost
platforms for remote work and collaboration. efficiency and make the work
Katri Harra-Salonen of Finnair put it this way: “As a com- more meaningful.
pany, we have assessed and analyzed our starting point
– what do we already have to build on, what is our digital kristiina söderholm
maturity? Our vision and strategy are the goals we strive fortum
towards, with technology and especially our people as
the key enablers.”
For the public organizations, this was their second

highest priority, with some pointing out that because
the public sector has a competitive disadvantage when
it comes to attracting top talent, they must invest in the
well-being of their employees and give them the
opportunity to influence their own work.
Empowering employees
40% of
Ranking
% 4 2
organizations emphasize
employee empowerment
3,8 Enterprises as a top priority through
41
50 which the benefits
35
25 25
4,3 Public sector of digitalization are
6 18
obtainable.
Q: To what degree do you prioritize digital-enabled initiatives helping you to empower your
employees?
Case study
Fortum
Empowering Employees
Among many other industries, the energy industry will About Fortum
face increasing disruption by digital technologies in the Fortum is a leading clean-energy company that
future. As the core electricity generation and retail provides its customers with electricity, heating
businesses are highly competitive and subject to new and cooling as well as smart solutions to improve
players entering the market, Fortum is actively seeking resource efficiency. They want to engage their
ways to utilize the right digital tools and technologies customers and society to join the change for a
to foster innovation, improve its business and change cleaner world.
the culture.
Source: Company’s web page
One of the recent, most transformative digital-related
investments is Fortum’s decision to move its head office
operations and personnel into new, modern office
premises. The new office layout was designed primarily
to facilitate teamwork and innovation through both the
design of physical space and the introduction of digital
collaboration tools into the meeting rooms and
brainstorming areas.
“
Fortum’s collaboration initiative is not only limited to
the head office staff. Simultaneously, Fortum is deploy-
ing a new cloud-based collaboration and productivity For us, digitalization means
platform to all its employees in all operating countries. adopting the right tools for business
The transition from legacy applications to this new development, innovation and cultural
solution will be one of the key drivers towards a more evolution. We want to bring the
efficient and effective knowledge sharing culture within
the whole Fortum personnel.
ownership of initiatives to the business
units.
Power plant maintenance is also one key area for digital
opportunities. For operations and maintenance, kristiina söderholm
Fortum has deployed data analytics applications to
provide the personnel with just-in-time information
related to the equipment subject to maintenance.
Fortum also uses VR in operator training and prepara-
tion for maintenance tasks in areas, which are restricted
from access during ongoing power generation.
Employee empowerment and cultural transformation

are seen as crucial enablers for taking the full advan-
tage of the digital technologies in building the Fortum
of the future.
“ The low-hanging fruit has
been collected long ago. Now,
failures are where the best
improvement ideas come from.
eetu paloheimo
veikkaus
How are businesses
implementing digital
transformation?
There are nine key capabilities for the creation of the Finnish digital ecosystem. There is,
however, no one set path -- each organization is mixing
succeeding in digital transformation. and matching different approaches to build the digital
How are the leading organizations environment that is right for them. To understand how
they have approached digital transformation and what
approaching them? they have done to accelerate the change from the old
world to the new, we asked the executives to discuss
the concrete initiatives they have undertaken during
From creating state-of-the-art in-house digital devel- their journey. We have outlined nine different catego-
opment capabilities through training and recruitment ries of capabilities to get a thorough picture of the ways
to gathering the right collaboration partners around these organizations drive digital transformation, and
them, these leading organizations are spearheading their emphasis and success in them.
Ranking of the key capabilities Enterprise Public sector

ranking ranking
3,0 3,8
Agile digital development 1 6

3,4 4,0
External collaboration 2 1
2,6 3,4
Modern way of working 3 9
3, 3 3,4
Innovation and co-creation 4 2
2,8 3,2
Governance and performance 5 8
3,2 3,3
Value realization 6 3
3,23,2
Creating competencies
7 4
2,8 3,2
Leveraging customer data
8 5
2,6 2,8
Digital challenger setup
9 7
Not at all Very high degree
How to create the right culture
77% of businesses consider two-

The shift to a digital-first world requires securing agile
digital development culture, methods and technolo-
gies, while operating day-to-day IT at the same time. 13
out of the 17 enterprises saw this two-speed technolo- speed IT as crucial for success in the
gy development process as a key success factor and digital era.
rated it as a high or very high priority.
Recently, some non-software enterprises have begun

to in-house the digital skills to support their develop-
ment efforts. An accommodating infrastructure is a
vital component for succeeding in this transformation. ment approach as an inefficient way to steer the
The leading enterprises focusing on a develop- enterprise’s development agenda -- the best ideas,
ment-friendly technology infrastructure are also after all, may arise at any level within the organizational
forerunners in driving a cultural change and applying a hierarchy. To give these ideas the opportunity to thrive
leaner approach in driving their initiatives forward. and flourish, there must be a way to incubate and test
Some enterprise respondents see a top-down manage- them in a more agile, and small scale way.
Agile digital development Ranking
% 100
1 6
59 3,8 Enterprises
3,0 Public sector
12 12 18
Q: To what degree do you secure an agile digital development process, while effectively
operating your day-to-day IT?
For the public sector, there is more emphasis on
100% of public sector

implementing digital initiatives through collaboration
with external partners. With partnerships and collabo-
ration seen as the highest-valued initiative in the public
sector, the respondents did not recognize the need to organizations employ partners as a
implement a modern two-speed tech stack or develop
their own company culture towards a more modern
primary means for digital development.
startup approach as vital. As the short-cycle digital
initiatives are implemented through partners, the wide range of different skills needed in a digital-first
development culture on the implementing side is seen world, enterprises have recognized that building all
as more important. these capabilities is a monumental task and competi-
tion for talent is fierce. Collaboration with partners
Still, almost half of the enterprise executives gave high widens the spectrum of available skills and insight, and
importance to external collaboration through building is seen by many executives as a vital part of reacting to
partnerships and participation in ecosystems. With the current challenges.
Lean way of working Ranking
% 3 9
3,4 Enterprises
41 40
2,6 Public sector
20 18 20 24 20
18
Q: To what degree do you apply a lean startup approach to succeed with Digital Transforma-
tion / development initiatives?
External collaboration Ranking
% 100
2 1
3,4 Enterprises
41 41
4,0 Public sector
6
12
Q: To what degree do you collaborate with external partners and eco-systems to succeed with
your Digital Transformation?
How to ensure success
In line with the Digital IQ benchmark findings, one
“
hurdle Finnish organizations seem to be struggling with
is measuring the success and potential of digital
Who is on board the digital team?
development initiatives. This proved to be one of the
capabilities with the most divided responses from – Everyone.
enterprise executives, with responses somewhat katri harra-salonen
equally distributed from low to high degree.
finnair
The approaches ranged from employing traditional

demographic and financial KPIs to more innovative
initiative-specific measures. Both approaches were
backed up by stories of success and shortcomings. In
other words, a silver bullet to measure and understand
how transformative digital initiatives achieve their
intended effect is yet to be discovered. The leading
Finnish executives are both open-minded in enabling
novel approaches and driven in demanding concrete
results. That said, they’re ready to entertain the idea
that the real value in a specific initiative might not be Identifying the individuals with the right combination
apparent until sometime in the future, and avoid of business understanding and digital know-how is the
shutting down promising projects too abruptly. bottleneck in driving the digital initiatives effectively
throughout the organization. Many interviewees stated
The executives, however, are fairly confident that they that finding the person in charge is usually not a
engage the right people in driving digital initiatives, problem. The real challenge is finding adequate
and that these people have adequate resources to resources from different corporate levels to support
implement the changes. Currently, the focus is mainly digital initiatives.
on defining the appropriate process to filter out the key
stakeholders and influencers, and ensuring support
from all necessary levels.
Governance and performance Ranking
% 5 8 A silver bullet for

measuring digital
success is yet to be
75
discovered.
3,2 Enterprises

25 24 24
18
Q: To what degree do you ensure use of relevant metrics to evaluate and prioritize digital
opportunities typically subject to considerable uncertainty?
Value realization Ranking

Ensuring value
% 6 3
realization is a
common challenge
75
for businesses and
59 3,2 Enterprises public organizations.
29 25 3,3 Public sector
12
Q: To what degree do your key people succeed at driving and realizing the value intended with
Digital Transformation?
The challenge of finding top talent nized its value and have at least some experience in
Through both training and recruitment, creating engaging end-users in product and service develop-
essential competencies to drive businesses forward and ment at a very early stage.
develop their digital portfolio is a vital factor in future
success in the digital-first economy. Both the enterpris- The public sector respondents scored co-creation and
es and the public organizations indicated that the customer involvement a bit higher than their enterprise
competition for the top talents is pervasive. counterparts, even though customer engagement was
seen as only the third highest priority in their digital
Making the most of external insights transformation agenda. Some public sector organiza-
tions have seen significant opportunities in civil involve-
Although customer engagement and product or
ment with the recent developments in online participa-
service development is highly prioritized, the level of
tion and feedback tools.
effort put into customer involvement in idea genera-
tion is surprisingly low. Only five of the enterprises
The biggest surprise of all is the degree to which
considered their customer engagement in innovation
enterprises and public organizations alike underutilize
and co-creation purposes to be a high priority.
their customer data sources. Many enterprises and
public organizations have ongoing initiatives in this
Customer and end-user panels have been called upon
area. Some of these initiatives are recent endeavors,
for decades, but these methods have yet to take the
however, and have a long way to go before delivering
digital leap. Nonetheless, all the respondents recog-
profitable results.
Creating competencies Ranking

Finland is
% 7 4
experiencing a
severe shortage of
80 digital talent.
71
3,2 Enterprises
3,2 Public sector

24 20
6
Q: To what degree have you succeeded in creating essential competencies for Digital Transfor-
mation initiatives?
“ “A top-down approach will
lead to failure. Digital needs
to be inborn in the heart of
the organization.”
marco ryan
wärtsilä
Innovation and co-creation Ranking
All participants see

room for intensifying % 4 2
customer co-creation.
71
60 3,3 Enterprises
40

Q: To what degree do you engage and involve customers in idea generation, and product and
service development?
A more structured way to get external input by inviting
12%
outside subject matter experts to challenge the status
quo and way of working was one of the most unfamiliar
approaches for the organizations. While few organiza- Only of enterprises
tions listed significant challenger setup initiatives, utilize their customer data to
several saw these as an interesting opportunity for the
future with plans already afoot within the organizations.
a high degree.
In addition, the organizations that admitted to not
having any digital challenger approaches ongoing
identified the potential they could unlock, which
suggests that the future might introduce interesting
new agile management approaches.
Leveraging customer data Ranking

100
% 8 5
2,8 Enterprises
47
41 40
3,2 Public sector
20 6 20 6 20

Q: To what degree do you utilize and integrate available customer data sources and employ
advanced analytics?
Digital challenger setup Ranking
% 9 7
2,6 Enterprises
50 47
25 25
12 12
Q: To what degree do you have a structured challenger setup that helps you ensure your
approach and offerings continuously stay sharp in the market?
Case study
Finnair
Competence
From their first flight in 1924 to the award-winning About Finnair
Finnair app, Finnair asserts that all their success comes Finnair is a network airline specialised in flying
down to their people – people having a can-do passengers and cargo between Asia and Europe.
attitude, courage and a focus on clarity. Now they are For people in Finland, they want to offer the best
turning their focus on the digital-first business of possible flight connections to the world, whereas
tomorrow, and applying this same level of determina- to people travelling between Asian megacities
tion in pursuing the opportunities created by digital- and Europe, they want to offer the smoothest and
isation. fastest connections in the northern hemisphere
via Helsinki.
At the end of 2016, Finnair embarked on an ambitious
journey, the destination of which is – in their own Source: Company’s web page
words – to build the best agile digital development
team in the Nordics. From providing the most fluid
customer experience for travelers worldwide to
optimizing their operations based on massive
amounts of data generated daily, Finnair is on a route
to create the in-house capabilities to identify and
realize the extensive digital possibilities both inside
the organization as well as in their customer interface.
“
Finnair recognizes that converting the digital possibili-
ties to business advantages relies on the people. As a company, we have assessed and
In addition to a determined recruitment campaign, analyzed our starting point – what do
Finnair wants to help people develop themselves at we already have to build on, what is our
work, to grow in the direction that supports their
passion and strengths. This applies to their digital digital maturity? Our vision and strategy
transformation agenda as well. With buy-in from the are the goals we strive towards, with
C-level and the strengthening of their executive board technology and especially our people as
with innovation and digitalisation experts, Finnair is the key enablers.
transforming the company culture to embrace the
new digital era and inviting every employee to be
katri harra-salonen
a part of it.
Which emerging technologies and
future skills are crucial?
What does the future hold? We invited the executives Finnish leaders share the
to gaze into our crystal ball and give their predictions of global vision of AI being the
what their technology portfolio might look like five
years into the future, and which of these technologies
most disruptive technology
would be most disruptive in their industries. Compared over the next 5 years.
to a benchmark run by PwC in 2016, the portfolio of
emerging technologies the Finnish organizations
expect to invest in and prioritization within it are no
different to those of their international competitors.
Overall, the respondents evaluated AI to be the most

disruptive technology within the next five years.
Common use scenarios also touched on the subject of In the public sector, robotics has everyone’s attention.
machine learning, as current amounts of generated Every respondent saw robotics as being influential
data are already virtually impossible to put into use within the five-year time span, due to the sector’s
manually. This problem will only continue to grow along predominant business aspirations of gaining efficiencies
with the generalization of IoT – the technology deemed and optimizing operations. While practically all respon-
second most disruptive. dents have already had positive experiences of imple-
mentations with robotics, even in large-scale process
automation contexts, one respondent did make an
interesting point: They had already met their first
unemployed software robot. A worrying vision of the
future, perhaps?
“
These technologies have already begun to show their
Digital transformation is about promise, and expectations for future developments are
continuing to mount. Throughout the interviews, the
amplification of our core
respondents had plenty of examples of promising
competencies, augmenting into proof-of-concept types of initiatives utilizing the most
new areas and accelerating the recent technologies, such as drones, blockchain, 3D
speed of doing so. printing, and VR -- but stories about turning these into
real value-producing applications are still in the mak-
marco ryan ing. As a number of interviewees pointed out, scaling
wärtsilä these technologies into feasible value-added products
and services is heavily dependent on the distribution of
commercial applications of the technologies. Put it this
way: Do you carry the cardboard 3D goggles you got
for your last birthday to the grocery store with you?
We asked the executives to assess their currently

available skill set in using and benefiting from these
technologies in their businesses. Paradoxically, these
leading enterprises tend to evaluate their skills as
average, or even slightly below, when compared to their
competitors. Even though not an objective measure of
true skill pool within the enterprises, this result likely
reflects the main difficulty enterprises encounter in
leveraging emerging technologies: overall scarcity of
high-skilled resources and lack of successful produc-
tion-state implementations exploiting the newest
breakthrough techs.
In addition to the lack of satisfaction success in compe-

tence creation, even these high-profile enterprises are
struggling to fill the skill pool with experts in all relevant
emerging technology categories. The situation is
certainly not as bleak as one respondent put it: “Com-
Technologies respondents think most influential in next 5 years

Most of the current
% emerging technologies are
still yet to prove their real
business value.
Artificial 82%
Intelligence 80%
Internet of 76%
Things 40%
53%
Robotics
100%
Augmented / 29%
Virtual Reality 40%
29%
Blockchain
40%
3D printing 24%
Enterprises
12% Public sector

Drones
pared to peers we are at the average level, which equals
‘very poor’”. Nevertheless, supply does not appear to
meet demand when it comes to innovative technology The shortage of digital
resources. Interestingly, the public sector respondents talent is making it hard
were much more confident in their ability to leverage
these emerging technologies in the future. Still, no
to exploit emerging
respondents were satisfied enough to evaluate their technologies.
level of available skills as excellent.
Emerging technologies skill set
%
59 60 Enterprises
40 Public sector
6 18 18
Very poor Below Average Above Excellent
average average
Case study
LähiTapiola
Emerging Technology
LähiTapiola has a broad portfolio of ideas and concepts About LähiTapiola
related to leveraging emerging technologies to deliver LähiTapiola is a mutual group of companies
additional business value. In the customer interface IoT owned by its customers. It serves private custom-
is clearly one of the technologies with the biggest of ers, farmers, entrepreneurs, corporate customers
potentials to transform the insurance business. All and organisations. LähiTapiola’s products and
customer-facing digital initiatives are closely linked to services cover non-life, life and pension insurance,
LähiTapiola’s strategy of enabling people to live as well as investment and saving services. They are
healthier lives. also professionals in corporate risk management
and welfare in the workplace.
The main logic behind LähiTapiola’s strategy is to
create win-win scenarios for both the insurer and the Source: Company’s web page
customer. For example, in the concept of intelligent
health insurance, the end customer is given an activity
wristband to provide inspiration and insights for the
person to drive their behavior towards a healthier
direction resulting in a longer, happier lifetime. At the
same time, this reduces the insurer’s risks and amount
of health insurance payments.
“
Similarly, the concept of intelligent home insurance
builds on a connected home ecosystem, in which
different devices and sensors connect to provide data All products will be digital-enabled
related to e.g. moisture and temperature conditions, to allow for more customizable
helping the customer to take better care of the proper- modularization than ever before,
ty and once again reducing risk for the insurer. One
thereby providing the customer with
interesting development path in this context are the
smart contracts where, for instance, the connected the opportunity to mold their own
home could directly alert the contracted plumber in product and price point.
case of a water leak, reducing the severity of potential
damage and minimizing repair costs. mikko vastela
LähiTapiola has a strong collaboration and partnership

approach with technology and other service providers
in creating and delivering digital customer-facing
solutions.
Conclusions
Finland’s leading organizations These approaches ranged from emphasizing growth
through enhancing customer-facing activities and
might have diverse views on what overall service experience, to putting efficiency first
matters most in strategy and opera- through operational excellence and employee em-
powerment -- and everything in between. A divide
tions – but the majority are all on the emerged between the enterprise and public sector
same path towards being champi- respondents. Enterprises focused more on external
customer-facing domains of engagement and prod-
ons of digital transformation. uct or service transformation, while public organiza-
tions invested more in internal operations and em-
The interviews with the highest level of executives in powering employees. From one end of the spectrum
these leading Finnish organizations shed light on the to the other, every organization had addressed the
differences and similarities in their digital transforma- evolution towards a digital-first world in their agendas
tion journeys, and gave us deep insight into the diversi- and visions. In fact, 19 out of the 22 organizations saw
ty of approaches, agendas, and priorities that are digital transformation as one of the topmost priorities,
powering digital opportunities.
with nine seeing it as the most important on their approaches: managing it from a central role, or giving
current agenda. rein to functional units closer to the day-to-day opera-
tions, where they see the most innovative ideas arise.
By evaluating the organizations based on their digital
maturity and the governance model applied for their While central coordination promotes adoption of the
digital transformation, we can see that the organiza- best practices throughout the organization, a decen-
tions are on the way to becoming digital champions in tralized governance model lets different units adopt
their own fields. Most organizations follow a common the practices most suitable for themselves. In a large
trajectory of centralizing their digital development corporation with several core business functions, one
governance to refine and spread the best practices set of practices and guidelines may not work for
within the organization before putting the separate everyone. In a decentralized model, open and instant
functions themselves behind the wheel. However, some communication becomes key – not a trivial issue, as is
organizations have intentionally adopted different apparent from the Digital IQ benchmark results where
The journey towards digital maturity
Most common
Centralized
path in Digital
Transformation
Governance model
Enterprise
Public
organization
Decentralized
Digital Digital Vertical Horizontal Digital

observer novice integrator collaborator champion
Digital maturity
Digital observer Vertical integrator Digital champion
Digital not a top priority. Initiatives run Digital a top priority in at least one Digital-first is the way the world works.
by individual people with a trial mindset. business unit. Resources appointed and Digital opportunities explored in all
No goals or metrics for success agreed on. new ways of working encouraged. business areas. Resources and data shared
Business runs as usual, digital a notional Digital initiatives seen as a cascade within throughout the organization to drive
topic in strategic discussions. a business process. Responsibility for innovation. Company culture encourages
driving the approach designated. a forward-looking approach with flat
Digital novice governance for initiatives.
Horizontal collaborator
Digital recognized as a current or
near-future priority. Sporadic digital Digital articulated as a top priority.
initiatives run, results monitored and Ways-of-working and best practices
reported upwards. Initiatives by nature shared and distributed. Corporate-wide
explorative and targeted at single added value sought for through gover-
functions or tasks. Digital approach nance, collaboration and communication.
regularly on the executives’ agenda. Key stakeholders share a common mindset
and aspiration of what the digital future
looks like.
one of the largest gaps against global top performers reported that they have success in engaging the correct
was enterprise-wide communication of business and key people in driving digital initiatives, but some often
digital strategies. encounter resourcing bottlenecks -- especially in
middle management, where the managers cannot find
Overall, the shift to a more collaborative business the time to introduce, drive and monitor the new
environment seems imminent. None of the organiza- initiatives properly on top of their other day-to-day
tions reported complete satisfaction with their compe- responsibilities.
tence creation initiatives, and nearly all saw external
collaboration as a priority to some degree. This empha- Throughout the interviewed organizations, experiences
sis was most noticeable in the public sector, where all of getting the most from their own customer data are
respondents invested in collaboration to a high degree. scattered – and there is a notable lack of great success
stories. Shortcomings in data utilization seem to be a
Both the Digital IQ benchmark and interview results wider problem, as this was perhaps the most striking
have made one thing clear: measuring the success and feature in the Digital IQ benchmark. In the discussions,
potential of digital development initiatives is not this also arose as one of the areas focus will turn to in
straightforward. This also proved to be one of the most the short-term. With the modern availability of scalable
dividing factors for the enterprise executives, with feedback channels and the emphasis enterprises place
responses somewhat equally distributed from low to on customer engagement, one would expect a higher
high degree. The approaches ranged from employing rate for inviting their customers to participate and
traditional KPIs to more innovative initiative-specific contribute to development initiatives. However, none
measures, and both were backed up by stories of report a very high degree of effort or success in co-cre-
successes and shortcomings. Most organizations ation initiatives.
All in all, how can businesses and public organizations

become champions of the digital-first era?
These five things just might be the key to success:
5 things you can do to succeed at digital transformation
1. Craft a clear strategic statement for your organization-wide

digital approach, and clearly communicate at all levels.
2. Foster a culture that encourages innovative initiatives, especially in
environments with ever-increasing speed and complexity.
3. Use all available data assets to efficiently deliver insights and
value-add for the business.
4. Tailor a fit-for-purpose approach to engaging digital talent and
external insights that discover, create and capture the value of
digital opportunities.
5. Strive rigorously to define and deploy the KPIs that enable impact
assessment for digital investments and efforts undertaken.
Contributors
Microsoft Finland has worked on this in-depth study to integrated, end-to-end digital solutions from
investigate how digital transformation affects Finnish strategy and innovation through to execution to
companies and organizations. The study is based on solve our clients’ most complex business chal-
Microsoft’s unique approach to the subject and experi- lenges. PwC Finland is part of the global PwC
ence as a global leader helping companies drive network. www.pwc.fi
digitalization worldwide.
The companies and organizations that took part in
By combining deep business and industry insight with this study gave us an invaluable insight into the
digital innovation, PwC’s diverse teams of creative, benefits of digital transformation. Microsoft and
industry and technology professionals help accelerate PwC Digital Services would like to thank everyone
the successful impact digital can have. We help create who got involved for their thoughts and their time.
Andreas Korczak Malathy Eskola Petri Salo Antti J Saarinen Jani Lukander
COO, Marketing Lead, Leader, Senior Manager, Data Scientist,

Microsoft Finland Microsoft Finland PwC Digital Services PwC Digital Services PwC Digital Services
Andreas leads Microsoft’s Malathy oversees the Petri leads PwC Digital Antti is a seasoned digital With a 10-year background
digitalization strategy and marketing of digital Services in Finland. Petri transformation professional in human and technology
implementation within the transformation as well has extensive experience with dedication to help cus- research, Jani is helping
Finnish market. as leading marketing with technology enabled tomers discover, create and customers find ways to
transformation for business transformation capture business value directly turn their data
Microsoft Finland. with a global perspective through technology. assets into business value.
within various industries.

How Finland Is Embracing Digital Transformation

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How Finland is embracing

What ways is digitalization being implemented? 19

How are businesses implementing

In short, to win at digital, you need to develop the perfect

Did you know?

of organizations give digital

86% transformation a high strategic

of companies rate the importance of companies utilize their

Studies have shown that CEOs believe that one thing

#3 According to the European

15% of Finnish organizations reach

Our CEO is a champion for digital

The executive(s) responsible for digital are

Strongly Disagree Neither agree Agree Strongly

The largest gaps, as seen through the benchmark

Thankfully, Finnish organizations are doing very well in

Enterprises Public organizations

Finnair OP UPM Aalto-yliopisto

Fortum Outotec Veho D9

Kemira Posti Veikkaus Tampere3

Kone Sanoma VR Turun kaupunki

Lassila & Tikanoja SOK Wärtsilä Verohallinto

LähiTapiola Stora Enso

Forest & Lumber Industry split

Wholesale & Industry &

We approached executives at the very highest

To kick off the discussions, we asked the executives how

Kristiina Söderholm, Fortum Digitalization Develop-

Some organizations define digital as encompassing all

86% of organizations give

Digital Transformation importance

Q: How important is digital transformation on the organization agenda?

What encourages enterprises

“ We can no longer expect a 95%

Impact on new businesses

Impact on core business

Not at all Low Some High Very high

Impact on adjacent business areas

These questions will have a big impact on the shape of

Marco Ryan of Wärtsilä put it like this: “Digital transfor-

As for public sector organizations, several identified

Lever in gaining efficiencies

efficient within two years. 40

60% of organizations prioritize

Lever in defending market position

Lever in generating growth

Not at all Low Some High Very high

We already know that digital transformation is the top

As Mikko Vastela, CIO of LähiTapiola says, “Digital

It’s empowering employees to work better

Engaging Customers Transforming Products and

MOSTLY PEOPLE DIGITAL MOSTLY AGILITY

Empowering Employees Optimizing Operations

Assessing the priority of digital Enterprise Public sector

Transforming Products and Services 2 4

Not at all Very high degree

60% of enterprises rate

enhancing customer engagement as

Engaging customers Ranking