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If there’s no data, nothing happens.
Visiting Royal IHC, vessels and equipment manufacturer in Kinderdijk, is like travelling back in time. Everywhere overalls, engineers atop of ladders tinkering away at huge dredgers, a lot of steel, pipes, cables and cranes. “Don’t be fooled, a dredger is quite a piece of innovation,” laughs Jan van de Wouw (47), Director Digital Business. “Each year, it gets a little faster and better.”
Until recently, this kind of innovation mainly revolved around the thinking of new physical products. But this all changed towards the end of last year. “I went to the board with a message: if we want to stay relevant for the future, we really need to get going with digitalisation,” says Van de Wouw. “Our competition is already busy with it, and our clients are asking for it.” The physical delivery of a ship or equipment is important, but the digital delivery will be at least as important in the future, he explains. “If we ignore digitalisation, our products will eventually get selected less and less.” It turned out, everyone was well aware of this, says Van de Wouw. Action was taken fast: budget was made available, a strategy was launched, and since June this year, he has been leading a ten-strong digital business team.
"If we want to stay relevant for the future, we really need to get going with digitalisation."Jan van de Wouw
Before we start talking about Van de Wouw’s mission, here’s what Royal IHC really does, in a nutshell. “We’re an international company with about 3,500 employees, specialised in delivering maritime solutions,” explains Van de Wouw. “We focus on three markets: wet mining, offshore and dredging. We’re primarily known for the third. More specifically, we’re the biggest suppliers of dredgers and dredging equipment in the world.” We don’t do the dredging, he emphasises. “We build and sell our vessels and equipment to contractors who, for example, need tools for building and maintaining a harbour, or for beach nourishment.” This is what the company is known for, but Van de Wouw is bringing in something new: connected vessels. “Simply put, we connect vessels and equipment using the internet, to a platform on which we compile all kinds of data and analyse it. We use this new data to build new services.”
Here’s an example. “We have now connected 25 ships, from 5 clients. Each ship has 80 sensors on board. From each 80 data points, we receive real-time information that both, customers and our service technicians, can see from their workplace. We can remotely see how production is going, or if there’s a malfunction, you name it. Since we have the data, not only can we call if something’s up, but also eventually predict when something might occur down the line. If we know this in advance, we can advise a client ahead of time, to come through a service point for maintenance with one of our service engineers. This way, nothing actually happens during uptime, which nowadays costs unnecessary time and money.”
This sounds like a similar development, now happening in the automotive industry: connected cars. “Exactly the same,” agrees Van de Wouw. “I drive a car that is totally connected. If my car dealership sees that my car needs maintenance, they call me. This is how we want to work with our clients. Advise them on what’s going to happen and what actions they can take, to ensure that, as much as possible, their productivity as well as their projects are successful.”
Client is king
Van de Wouw’s underlying mission is to make his clients’ lives better, he says. This may sound like marketing jargon, but for Van de Wouw, this idea has been deeply ingrained since his youth. “My parents had a wholesale textiles business, and we lived above the shop. When a client would come in, my parents would drop everything and run downstairs to help the client. Our clients were kings,” he laughed. It’s still this way now, and his CEO, Dave Vander Heyde, sees it as such, says Van de Wouw. “’Will the client notice anything with this innovation, Jan?’ he often asks. If that’s a no, then I need to focus on something else.”
Remote vessel monitoring is one thing, but Van de Wouw wants to go a step further next year. “While we analyse data coming in, we can also tell our clients how, for example, their productivity compares with that of other customers with same-type vessels. With these analyses, we can help them improve their productivity, so they make more money with the same equipment.”
Van de Wouw and his team don’t just work towards the innovation of a product or service, but build new business models in parallel, he says. “That’s how we get to try out pay-per-use contracts with a number of clients. Normally, we’d sell a dredge pump and hear about it later when it would break down. But the idea now, is to install the pump on the ship and the client pays when it’s in use.” Advantage is, the customer only pays when something is running. “Our gain is that, in the long term we do better business, because we’re more involved in the pump’s operation.”
"We don’t just work towards the innovation of a product or service, but build new business models in parallel."Jan van de Wouw
Dredger VS speedboat
Van de Wouw may be working with bulky industrial dredgers, but a speedboat is a better metaphor for what he is. In the space of half a year, he set up an entire innovation process, and new services are about to go to market. “This kind of slow pace is a bit part of the industry,” says Van de Wouw. “The delivery of a vessel takes 2.5 years on average; it has to be good in one go. But the services we’re working on are simple at the beginning. It’s OK if they’re not perfect initially, or if everything still needs to be changed. We can easily adjust that.”
This is also what makes his position unique, says Van de Wouw. “Our team itself has few specialists in dredging or related technologies. What we can do however, is quickly bring people with the right know-how together. And with methods such as lean startup, you can show something that can work, quickly, and with relatively little investment.” The biggest challenge in his work is having enough available time for the new initiatives his team comes up with. “Everyone is busy with daily activities. Sometimes it happens that people don’t show up, or that I can’t have any meetings.” In that case, he just keeps looking until he finds people who do want to participate. “Once they’re on board and have participated in a few scrum sessions in which we deliver projects quickly, they’re enthusiastic.”
The question then remains: where is this all going. Is it possible, that Royal IHC’s most profitable activity will no longer be vessel sales, but instead, all kinds of software services? “In the long term, it’s entirely possible,” says an enthusiastic Van de Wouw. “Just imagine the arrival of autonomous ships that self-steer and operate. This calls for entirely different types of challenges, products and business models. Maybe by then we won’t be selling vessels but use the vessels to provide services. This is also why we need all this data. Without any data, nothing will happen.”
Jan van de Wouw
- Current position: Director Digital Business at Royal IHC since 1 June 2018
- Education: Business and Computer Science at Fontys Hogeschool (1990 -1994), selected MBA modules: Security & Cyber Risk, Business Process Management at Nyenrode Business University (2016)
- Previous positions (selection): Business Analyst at Philips (1998), various positions at Samas NV, IT director (1999 - 2009), various positions at Royal IHC, director IT (2009 - present)
- Favourite innovation book: The World is Flat by Thomas L. Friedman
- Essential gadget: Bose wireless headphones
- Impressive innovation: Tesla by Elon Musk
About Hacking Innovation
Can you manage innovation? Large Dutch companies seem to think so, judging by the number of innovation managers who have been hired in the past two years. But how do you handle the managing of semi ideas and vague plans whose value have yet to be proven? How do you deal with the torrent of normal-is-best, as seen in traditional companies? Who are these corporate troublemakers? What drives them and what are their biggest challenges? A close encounter with innovation managers in the Netherlands.