The break­through of IT indus­try — In the core of ADP

To cel­e­brate the 20th anniver­sary of ISLET, we high­light some of the most promi­nent top­ics from our his­to­ry and how our newest gen­er­a­tion of man­age­ment has adopt­ed them. In this blog entry, more specif­i­cal­ly, we will relive the fast paced and mul­ti­fac­eted moments of our indus­try until the present day of arti­fi­cial intel­li­gence. Do you still recall the term that pre­ced­ed dig­i­tal­iza­tion, tech­nol­o­gy and IT?

ADP

ADP. Auto­mat­ed Data Processing

A term, when first heard, sounds a bit old-school and rigid if not com­plete­ly unsexy.

Nev­er­the­less, the acronym ADP still sum­ma­rizes the aim of mod­ern-day soft­ware devel­op­ment. Still in the age of AI, the term ADP is high­ly apt. Indeed, it still encom­pass­es the core mes­sage of what we do and what we strive to achieve.

From a tod­dler to euphor­ic adolescence

Halfway through the 1980s, the enter­prise resource plan­ning (ERP) was a shad­ow of itself com­pared to what it is today. In the next decade, how­ev­er, we wit­nessed a major inter­na­tion­al ERP break­through. This break­through made its way to Fin­land only at the end of the 90s when a wave of new imple­men­ta­tions rolled over the country.

At the end of the last mil­len­ni­um, the mar­kets only had a few ERP providers with the biggest being SAP ja Ora­cle. Next to the two big fish­es, there were sev­er­al small­er play­ers which were oper­at­ing in spe­cif­ic nich areas or usu­al­ly focused on spe­cif­ic indus­tries. The end of the 90s proved out to be a real gold min­ing time for ERP providers and experts. The mar­kets had an excess in ERP demand with only a lim­it­ed num­ber of experts with the nec­es­sary know-how and expe­ri­ence to swift­ly devel­op systems.

The time was char­ac­ter­ized by wild and fast moves. The big inter­na­tion­al play­ers brought in their experts from abroad while Finns were sent abroad to be trained. The chal­lenge was the para­dox between under­stand­ing busi­ness and sys­tems. There were only a hand­ful of experts who mas­tered both.

Espe­cial­ly ERP imple­men­ta­tions require equal amount of busi­ness and sys­tems under­stand­ing. In the begin­ning, how­ev­er, most of the ERP experts were pro­gram­mers lead­ing to a com­mu­ni­ca­tion gap between the ser­vice providers and clients.

Typ­i­cal­ly, experts need years of expe­ri­ence and involve­ment in sev­er­al projects in var­i­ous com­pa­nies from dif­fer­ent indus­tries to mas­ter ERP con­sult­ing. The strongest con­sul­tants, there­fore, were the ones with a strong busi­ness back­ground as they knew the processes.

Oper­a­tions opti­miza­tion or new busi­ness models?

Pre­vi­ous­ly, soft­wares were per­ceived as the nec­es­sary evil and they were only used to opti­mize pre-exist­ing process­es. Nowa­days, con­verse­ly, sys­tems and soft­ware are the beat­ing heart of businesses.

As a result, many com­pa­nies are tran­si­tion­ing or have already tran­si­tioned from tra­di­tion­al prod­uct plan­ning and man­u­fac­tur­ing process­es to cre­ate soft­ware-based busi­ness mod­els. Exam­ples of such pio­neer­ing com­pa­nies in Fin­land are

Pon­sse and Kemp­pi. I dare to claim that in both com­pa­nies, soft­ware-based prod­uct devel­op­ment receives big­ger rel­a­tive invest­ments than tra­di­tion­al prod­uct R&D.

Due to fast tech­no­log­i­cal advance­ments, the role of soft­ware in, for exam­ple, forestry machines is grow­ing rapid­ly. There­fore, you can find a great amount of soft­ware-based intel­li­gence in Ponsse’s forestry machines. By invest­ing in soft­ware devel­op­ment, Pon­sse wants to ensure that they con­tin­ue being on top of the game in the future as well. Just like Pon­sse, Kemppi’s his­to­ry has begun with equip­ment man­u­fac­tur­ing that has over­time expand­ed to weld­ing man­age­ment soft­ware, appli­ca­tions and weld­ing soft­ware. In their own words, the fam­i­ly enter­prise claim that they devel­op intel­li­gent equip­ment, weld­ing pro­duc­tion man­age­ment soft­ware and sup­port­ing expert services.

Rein­vent your­self or perish

The tech­nol­o­gy indus­try is rel­a­tive­ly young com­pared to many oth­er indus­tries. In oth­er indus­tries, the big play­ers can be over a hun­dred years old. As the IT industry’s time­line can only be mea­sured in a scale of a few decades, the same his­to­ry sim­ply does not exist.

In our field, tim­ing means every­thing. We must devel­op our­selves con­tin­u­ous­ly and under­stand which cus­tomer chal­lenges are promi­nent in a tak­en period.

A mis­con­cep­tion is that rein­vent­ing your­self means that you do things first and ear­ly enough. Some tech­nol­o­gy com­pa­nies, how­ev­er, are ahead of their time and the mar­ket is not ready for what they have to offer. There sim­ply has not been enough pur­chas­ing pow­er and these com­pa­nies have per­ished. Even though we can­not pre­dict the future from a crys­tal ball, tech­nol­o­gy com­pa­nies must strive to under­stand the mean­ing of right tim­ing in their business.

Infor­ma­tion based leadership

In this decade, the impor­tance of tech­nol­o­gy has grown expo­nen­tial­ly in cor­po­rate lead­er­ship. This par­a­digm shift can be seen in the roles of mod­ern IT direc­tors. Pre­vi­ous­ly, CIOs were seen only as tech­ni­cal direc­tors that had no busi­ness in board rooms.

The tables have turned, how­ev­er, and capa­ble CIOs are cru­cial for orga­ni­za­tions as they are in the epi­cen­ter of busi­ness with fre­quent­ly a vis­i­ble role. Often­times, CIOs are a part of the exec­u­tive board. More­over, next to CIOs, anoth­er C‑suite lev­el posi­tion has emerged, the CDO – Chief Dig­i­tal Officer.

As the CEO of a long-time fam­i­ly busi­ness, I see that work­ing in the tech­nol­o­gy sec­tor offers an amaz­ing chance to glance into the future. It does not only offer us the dai­ly oppor­tu­ni­ty to devel­op our­selves, it requires us to do so.

Jan­i­na Luoto
CEO, Isletter
Islet Group Oy

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