THE ROLE OF IOT IN DIGITAL TRANSFORMATION
31-01-2019

Rapidly emerging Internet-of-Things (IoT) technologies are revolutionizing the business processes. Over the past few decades, the development of the IoT has been prompting the digital transformation by introducing a plethora of novel concepts including integration platforms and architectures, smart products and communication protocols. Consequently, these innovations have also influenced the economic impact of the IoT.

In particular, the traditional end products have evolved into smart products and become aware of their own identity, environment and position. Furthermore, they can process data, make their own decisions and communicate with other devices opening tremendous circumstances for an immense number of applications that guarantee to improve the quality of our lives.

For small and medium enterprises (SMEs), this represents a huge opportunity to evolve from traditional product-oriented enterprises into data-driven enterprises [1] by not only introducing the smart products but also mining the data acquired by these products. Examining the data, gaining knowledge and discovering patterns equal new possibilities, new potential and consequently new services. However, the implementation of IoT solutions requires a fundamental transformation of the business model. To transform the business model, one can use a method developed by the DIGITRANS project, which supports SMEs in developing and implementing their new digital business models [2].

One interesting example of successful story presents a Slovenian high-tech SME called Sensum, which offers integrated high-quality assurance solutions for automatic visual inspection of pharmaceutical and nutraceutical products [3]. This company was founded in 2000 by the computer vision researchers from the University of Ljubljana and at first focused on the development of systems for applications in pharmaceutical industry, e.g. colour inspection of tablets in blisters. Through the years, it developed and improved several machines for automatic visual inspection and sorting of tablets and capsules and started to collaborate with IMA – one of the leading enterprises in this field. In the meantime, it penetrated the global market, kept growing and extended the manufacturing facility. Moreover, Sensum became recognized as a technology leader and preferred supplier of machines for automatic visual inspection and sorting of tablets and capsules [3].

According to [4], 200 billion devices are expected to be connected in 2020 or every human being in Earth will be surrounded by 26 smart products. It is therefore of utmost importance that SMEs adapt to these changes and thus transform their business models in order to stay competitive in the market. They are competing against time, so they have to encourage an open modernization-oriented culture within their organizations and attract new employees from the fields of data science and software engineering. This might lead to some structural changes within the organizations in the beginning. But potentially, it will ultimately increase their business opportunities and consequently guarantee new sources of income.

Authors: Melanija Vezočnik and Matjaž B. Jurič, University of Ljubljana, Faculty of Computer and Information Science

[1] A. A. Pflaum and P. Gölzer, "The IoT and Digital Transformation: Toward the Data-Driven Enterprise," in IEEE Pervasive Computing, vol. 17, no. 1, pp. 87-91, Jan.-Mar. 2018.

[2] DIGITRANS website. Accessed: Jan. 29, 2019. [Online]. Available: www.digitrans.me

[3] Sensum website. Accessed: Jan. 30, 2019. [Online]. Available: https://www.sensum.eu/

[4] A guide to the Internet of Things. Accessed: Jan. 29, 2019. [Online]. Available: https://www.intel.com/content/dam/www/public/us/en/images/iot/guide-to-iot-infographic.png

DIGITRANS - DIGITRANS METHODOLOGY PRESENTED AT THE DIGITAL TRANSFORMATION WORKSHOP AS A LEVER TO INCREASE COMPETITIVENESS AND EXPORT

In Zagreb, on January 24, 2019, Digital Transformation Workshop was held as a lever for increasing competitiveness and exports for export-oriented companies and people involved in strategic business decisions, future Digital Transformation Officers and all those who are in charge of designing new products.

Along with the distinguished panelists from academic and private sectors, one of the panelist was Assist. Prof. Katarina Tomičić- Pupek, PhD from the Faculty of Organization and Informatics Varaždin, a partner institution on the Digital Transformation project in the Danube Region – Digitrans. She presented the Digitrans project and a framework for the digital transformation of small and medium sized enterprises. The aim of the workshop was to help the trainees identify their own competitive advantages and know how to use them.

DIGITRANS - FIFTH DIGITRANS PARTNER MEETING IN VIENNA – FINAL ARRANGAMENTS

DIGITRANS - 30TH CENTRAL EUROPEAN CONFERENCE ON INFORMATION AND INTELLIGENT SYSTEMS (CECIIS) - DIGITAL TRANSFORMATION - SHAPING THE FUTURE

30th Central European Conference on Information and Intelligent Systems (CECIIS) will be held on October 2-4, 2019 at the Faculty of Organization and Informatics in Varaždin. The deadline for paper submission is April 1st, 2019.

You are kindly invited to join, participate, submit, attend, present, cooperate and contribute. Research and professional papers and posters, taking into account the CECIIS 2019 conference theme Digital Transformation - Shaping the Future within different conference sections, are welcome.  

Please find more information about important dates, special theme, conference research tracks and procedures on paper submission on the conference web site.

Download conference link.

DIGITRANS - SOBOČAN-INTERIJERI – THE STORY OF EXCELLENCE AND DIGITAL TRANSFORMATION

They have won Creators for centuries award for innovation and investment in entrepreneurship in Central and South-Eastern Europe, The golden marten in 2016, for best mid-sized company in Međimurje county, Lider invest 2016 reward and many others. Intersport, Samsung and Nike are among their clients. Their profits and number of employees has been continually growing and 60% of their profit comes from export.

This list only partly demonstrates how successful SOBOČAN-interijeri d.o.o. is and how important they are for Međimurje County economy. What is the secret to their success? By analysing their path carefully, we can see the link between continuous production and business processes optimization and the resulting success.

Business optimization, logistics and storage advancement were the main features of their business in recent years and this makes a great foundation for digital transformation – a goal they are decisively heading towards. Franjo Sobočan, owner and director of the company, said market opportunities are becoming increasingly challenging while customer expectations are ever so high.[1] Since they do business on the global market, it is to be expected that the standards they have to reach are high. Their customers expect them to be able to follow a controlled production process resulting in customer satisfaction.

HOW THEY STARTED

SOBOČAN – interijeri d.o.o. was founded in 2000, in Mursko Središće, Croatia. The company's main activity includes equipping business and shop interiors with furnishing equipment. As an authorized partner of internationally renowned brands, the company is a significant exporter in its region and is placed at the top of the European market for furniture and furnishing equipment. The most effective cooperation is established in the German-speaking areas such as Austria, Germany and Switzerland as well as other Western European countries.   

The company offers its customers individual solutions and a wide range of services:  innovative concepts development, prototyping, consulting, successful delivery and precise installation as an “off-the-shelf” solution in Croatia and around the world.

In 2015, the company built a new locksmith workshop and two canopies on the surface of 3200 square meters and founded Innovation and Technology Center (InTeC) at the headquarters. Half the investment was co-funded from EU Structural and Investment Funds. With this investment, conditions for business process optimization and reorganization of the existing machine park have been provided which will result in increased efficiency and competitiveness in foreign markets and numerous other benefits with digital transformation being one of the strategically most significant.

In 2016, the company started with production process digitalization, including different work organization and production process monitoring, business process, logistics and storage optimization. Special scanners are being introduced into production process so that every workshop leader and operational manager can scan the product and add the bar code so the product can be traceable in every production phase.

This is the only way of doing business if they want to respond to the needs and demands of clients Europe wide, with traceable products, compatible with high standards set by the costumers.

THEY CONTINUALLY INVEST IN BUSINESS DEVELOPMENT

A 16 million HRK investment was initiated in autumn of 2018. It is focused on the improvement of the complete production process - from creating an offer, job contracting, product design, production preparation, ordering input and materials, production process and packaging. This investment includes the construction of new production facilities where logistics and storage, final product montage and control, package and shipping processes will be located. New technology for business processes improvement will also be financed with this investment, so that the product quality is in line with expectations of customers Europe wide.

The idea behind the story is not just the continuous investment in new technologies and facilities - it is the change of the whole business concept they accept willingly which results with flexibility and the ability to respond to customer higher demands. The production process is very important part, but just one part of the new value creation process. A company needs to be fully aware of market demand and customer needs to be able to respond to them.

New revolution is happening right now and changes in the way business is being done are happening worldwide. These changes should not pass us by, we have to be ready for them. In the future, the existing concept of products and production process will thoroughly change. Production process will still be basic and indispensable, but just a part of the whole business system. This implies the completely new selling concept for SOBOČAN-interijeri, said Franjo Sobočan.[2]

SUCCESS FORMULA

In the story about SOBOČAN-interijeri we can find important digital transformation elements and learn a valuable lesson: digital transformation is not just the process of buying and installing new equipment and software. Companies should know their business model, their market and their customers very well and continually upgrade the knowledge they have. This is the only way to respond to the market adequately.

It is necessary to have a detailed insight into the business system so it can be adjusted with the market, fulfil its purpose and achieve success. So, get to know your business model, all its resources and processes, know your market and your customer and be ready to invest your time and other resources needed in this process and after that be ready to apply the knowledge and conclusions you got as a result of the research.

Digital transformation is just that – transformation and it requires commitment and a great deal of work, but at the same time, it is the only way to survive and succeed in the market.

Quote sources:

[1] Source: Article on the portal Međimurske novine „SOBOČAN-interiors stepped into digitalization to raise business and product quality“, published on 4th November 2018, available here.

[2]  Source: Article on the portal Međimurske novine „SOBOČAN-interiors stepped into digitalization to raise business and product quality“, published on 4th November 2018, available here.

DIGITRANS - DEVELOPMENT OF A DIGITAL BUSINESS MODEL FOR SMES THROUGH DIGITRANS METHODOLOGY

On February 27 2019, Development of a digital business model for SMEs through DIGITRANS methodology workshop was held in the headquarters of Končar-Elektroindustrija d.d., in Zagreb. Workshop was organized by the Association of Croatian Exporters and the Faculty of Organization and Informatics, and it tended to atract SMEs and other persons involved in strategic decision making.

The workshop was attended by 15 representatives of companies who, using the combination of new and existing tools on practical examples, wanted to overcome the steps needed to design a new business model that uses all the potential of digital technologies.

The workshop was moderated by prof. Vjeran Strahonja, PhD, Assis. Prof Martina Tomičić Furjan, PhD and Assis. Prof Katarina Tomičić Pupek, PhD from the Faculty of Organization and Informatics and Ivan Plačko, Director of the Technological Innovation Center of Međimurje. Moderators participate in the Digital Transformation in the Danube Region – Digitrans implemented within the Interreg Transdanubian Danube Region and as experts in digital business modeling have participated in creating DIGITRANS methodology and tools and have rich experience in developing a digital business model using DIGITRANS methodology.