Tieto Corporation, a leading IT Software company, began their digital transformation in the late 90’s. Using data-driven tools, they built a strong technology platform and together with Microsoft developed TPC, Tieto Productivity Cloud, a quintessential cloud center crafted in Finland serving global customers. Today, Tieto offers a mixed portfolio that includes private, hybrid, and/or Microsoft cloud, helping their customers modernize, digitize and innovate. Leveraging Microsoft technologies, like Dynamics AX and Office 365, Tieto brings industry specific solutions in the areas of Financial Services, Forestry, Manufacturing, Healthcare and Welfare. Arne Thor, Head of Dynamics AX Sweden for Tieto, shares their cloud journey and the benefits of embracing the mobile-first, cloud-first world.
“The old business model that was in play five years ago is quickly eroding; the need to start the digital journey is equally urgent to stay competitive,” states Thor. Impacted by both Microsoft’s shift and customer demand to integrate digital technologies into their businesses, Thor affirms the pressure to iterate and deliver at this faster pace. “Customers need to move fast; Microsoft is moving fast – everyone has to move fast to keep up with the demands of the digital economy.”
With increased focus on clock-speed, Tieto creates internal startups to help them move faster. This also aligns to Microsoft’s business model. For example, if Microsoft sells AX, Tieto needs to have a similar model to deliver hosting and capacity and to be identical in charge per use. If the customer wants to consume Dynamics AX as a service, they want to consume the managed services in the same way.
This approach not only helped them to enter the Dynamics AX market, it also helps establish growth, create change, and impact overall revenue.
“The time when Tieto did it all is in the past; now the digital business model means there is more focus on harnessing information in the form of data and analytics driven by how customers consume cloud services.”
The consumption-based model where value resides in the customers’ continued use and repurchase of a cloud service, is in strong contrast to the static model where customers paid heavy up-front costs. The value now is in usage vs potential.
While the consumption-based model is easier for the customer, it makes behind-the-scenes operations more complex. Thor notes, “It is critical to be really good at what you do in order to deliver tangible business value and you must deliver solutions via the right business model.”
Understanding e-commerce, networks and the digital processes by which business happens in addition to developing their own IP helps to differentiate Tieto from other players in the market.
Business is now data-driven and revenue comes from algorithms. This is partly new territory for Tieto. While they have been involved here and there, capturing information now becomes a growth bet for their business. “To be relevant for customers we used to provide them the tools and wish them luck,” Thor explains, “Today, we need to create the smart algorithms, offer this as a service and then analyze the data to deliver insights. ERP, CRM, BI Solutions, IoT Platforms, global connectivity – today we combine these things to deliver analytics from a connected environment so the customer can stay on top of their game.”
Tieto’s investment in digitalization is paying off as evidenced in a recent customer account team meeting that Thor attended. He shared that the figures shown within this space indicates that prices were coming down. However, their revenue increased by 15% and at the same time the customer satisfaction increased by 40%. “The quality of the user experience, by working in a better way with better tools and customer insight is a great example of digitalization’s benefits.” Thor continues, “Meeting and exceeding the customer experience drives revenue and customer value.”
Thor emphasizes that it’s crucial to not only understand your customers but also your customer’s customer in order to deliver the right solutions. To do this, Thor advises that partners must make significant investments in digital technologies now. “To have business value, it’s important to invest in technology, peoples’ know-how and to be close to your customer's business.”
Thor is confident that Tieto is well-positioned to succeed. While it’s imperative to stay alert for change, right now the focus is on digital transformation and Tieto is ready. “We deliver services in all time zones, 24/7 – a great value proposition. With 13,000 employees, we cover over 20 countries giving customers the ability to consume all of our offerings as a service. Further, Tieto is in a good place to deliver full Lifecycle Services to our customers. Not many partners can do this currently end-to-end.”
Watch Reetta Ruusunen, Tieto Industry consultant, tell how you need to change and embrace digitalization