Logowall of companies in maritime ecosystem
Logowall of companies in maritime ecosystem

Navigating the wave of digitalisation

Many companies talk of ‘digital disruption’ or ‘paradigm shift’; but very few can explain exactly where to start the digital journey with any kind of certainty argues digital expert.

There is certainly no shortage of companies offering their perspective on the future of the industry as it strives to take advantage of the coming surge of digitalisation. The question is: how can a traditionally conservative industry like maritime be expected to navigate the bluster and hyberbole of the latest Digitech? Many companies talk of ‘digital disruption’ or ‘paradigm shift’; but very few can explain exactly where to start the digital journey with any kind of certainty, says Vigleik Takle, Vice President and Commercial Director at Kongsberg Digital.

Digitalisation is everywhere; it’s hard to escape the buzzwords such as ‘big data’, ‘artificial intelligence’, ‘blockchain’ or ‘machine learning’ when reading the trade media or attending conferences. It’s a sign of the times; but how much of this buzz around digital solutions results in better, more efficient practices in the shipping sector?

“Clearly, some industries are already gearing up on their digital journey while others are lagging behind. The telecom, insurance and banking industries, for example, are already adopting digital technologies and disruptive moves have affected these industries. The use of digital in the shipping sector, however, is limited and for the most part it’s still at the beginning when it comes to gaining the full value of digitalisation. But the industry is on the verge of disruption, as digitalisation is increasingly considered one of the key solutions to the many challenges the industry is facing as well as to opening up new business opportunities,” says Takle.

Convergent challenges

Speaking to Jotun Maritime Insider, Takle referred to Kongsberg Digital’s recent report which outlines the major drivers and challenges for digitalisation in the shipping sector. “The maritime industry is in an intriguing position with many concurrent problems to be solved, including overcapacity, low margins, regulatory pressure, lack of efficiency and new digital demands from customers. digitalisation is being increasingly considered one of the key answers to these challenges,” says Takle.

Kongsberg’s Digital report also highlights the main perceived benefits of digitalisation, which include reduced costs, reduced risk, increased sustainability and new revenue opportunities. It is commonly accepted in the industry that, in time, the digital transformation will challenge the existing business models, and new models and opportunities will emerge. The industry’s increased interest in digital solutions is also reflected in the fast-growing number of software vendors entering the space.

“Today, practically every conference dedicates a large proportion of their program to topics like artificial intelligence, robotics, autonomy, blockchain, digital platforms, and big data. There are no shortage of people offering their perspective on the future of the maritime industry, but few can tell us where to start the digital journey with any kind of certainty,” opines Takle.

Jotun Insider - Navigating the wave - Vigleik-Takle
“Digitalization offers solutions to industry challenges and new business opportunities but ‘going digital’ is not easy. The key to unlocking value is to start simply and work collaboratively to utilize expertise, data and insights to create a competitive advantage” – Vigleik Takle, Vice President and Commercial Director at Kongsberg Digital.

Software jungle

Although the digital transformation of the maritime industry is still in its infancy, it’s already becoming difficult to navigate the “software jungle” argues Takle. Over 160 different vendors are currently offering various solutions to ship owners, charterers, operators, and other related industry stakeholders.

The report provides a full overview of the most significant players in the maritime software landscape, categorized according to the major Opex (operational expenditure) drivers such as administration, fuel and energy management, maintenance and operations and fleet management systems.

In spite of the crowded software landscape, the report says few of the vendors have been able to build significant scale with their offering. Hence, most of the vendors are still quite small in terms of revenue and number of customers, and given that the industry is very conservative, it could be years before we see mainstream adoption of new technology.

Underlying drivers

To get a better insight into the future likely adoption rate, the report says it is critical to understand the underlying drivers for digitalisation in the maritime industry. The three main drivers are high competition in the market, new regulations and new technology. All three will create an even stronger pull towards exploring the opportunities that lie within digitalisation predicts the report.

“So far, there are only a few early adopters of digitalisation in the industry, mainly because the key challenges for digitalisation are not being addressed. Once both the industry and the software vendors have fully understood and addressed these challenges, a major transformation is likely to happen in the following one to three years,” explains Takle.

Lack of a solid ROI (Return on Investment) is cited as a key challenge, as is data quality. Another key challenge as regards the adoption of digitalisation is cybersecurity. The rapidly growing number of “connected ships” is increasingly exposing the industry to cyber threats that could have a devasting impact on its credibility.

Collaboration key to solving challenges

“Neither a single industry player nor a software vendor can solve all these challenges by themselves. This calls for collaboration among the industry players and the software providers,” emphasizes Takle.

Recognized for developing new digital solutions and related technology alliances, Kongsberg has clear priorities to use resources to help companies with their digital transformation. Over the past few years it has established Kongsberg Digital and the Kognifai digital ecosystem to exploit the potential to help make maritime operations more efficient.

“Our ambition is to help transform the maritime industry. As part of our efforts, we have developed Kognifai, an open digital ecosystem, to address the challenges preventing the industry from accelerating its digital transformation,” explains Takle.

Turning data into business value

Kognifai enables customers to cost-efficiently capture and aggregate quality data from their assets, and securely transfer it to the cloud using the Kognifai infrastructure. Through the Kognifai Marketplace, customers have a large range of leading applications and services that can turn their data into business value - ranging all the way from advanced vessel performance to basic administrative tools. Kongsberg has launched an extensive partner program to ensure the leading software applications are made available in the marketplace.

“As it is an open ecosystem, Kognifai also enables customers to seamlessly integrate with their supply partners and cost-efficiently test out new ideas, and new operating and business models. In turn, this helps the maritime industry prepare for the future,” says Takle.

According to Takle Kongsberg has its collective fingers on the pulse of vast quantities of data in the market, with more than 18,000 vessels today outfitted with Kongsberg equipment and software systems onboard. This figure is likely to increase significantly over the next few years as there’s a good combination between tech push and market pull says Takle.

“We have one eye on the present, and the other is scanning for future trends and competencies,” says Takle and adds, “We are currently focusing on several areas, including condition based maintenance, performance management and decision support. While shipping is traditionally conservative, we firmly believe a growing number of owners and operators will turn to digitalisation and the use of advanced digital solutions to improve efficiencies.”

Indeed, the number of companies focusing heavily on developing digital solutions and platforms is growing at a rapid clip. In addition to the specialized software vendors, major companies like GE, ABB, DNV GL, Siemens, among others, are offering industry data platforms that aim to facilitate easier connections between different companies, increase data quality and drive safety and efficiency services in shipping.

It is unlikely that every shipping company will be a winner in the coming surge of digitalisation; growth in the field will likely be a process of elimination, separating the bluster from those software vendors with a firm grasp of the industry’s complexities and a genuine offering to make. While there are bound to be losers in the process, Kongberg’s report offers sound guidance in choosing the right players to gain a competitive advantage.

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