Everyone’s talking digital in shipping these days. Board meetings and conferences are full of people trotting out shallow truisms as they grapple to convince colleagues and investors they know how to deal with the challenges ahead.
Yet amid the cacophony of high-sounding tech speak, there is a widening gulf between words and the real world.
Shipowners labouring with thick paper files and creaking legacy technology is more the reality than the data-enabled future of which many speak.
So how can the widening gap between rhetoric and reality be bridged?
It is not only a problem for the small shipowner or operator. Big players are struggling to find clarity too.
Andreas Sohmen-Pao, chairman of BW Group and one of today’s most influential shipowners, is not afraid to admit to the scale of the challenges ahead.
It is not just about the technology itself and where and how it can be applied. It is also about its interaction and impact on existing legacy business models.
As BW steers into these deep new technological waters, Sohmen-Pao — speaking at the 2018 Norway-Asia Business Summit in Singapore last week — suggests there are five questions that every player in shipping should address if they are to best deploy the power of technology.
1. What is more important to success: knowledge of the business or knowledge of technology?
Shipowners labouring with thick paper files and creaking legacy technology is more the reality than the data-enabled future many talk of
The obvious answer is both, but how can the best of both be merged? Combining the knowledge of existing operations with the insights of data scientists to create profitable new activities is easier said than done.
For example, BW is taking a pragmatic line with an investment in a company called Alpha Ori, which has blended shipmanagement skills with a Silicon Valley technology team.
2. What should be done in-house and what should be outsourced?
Internal teams running legacy systems may be loyal but they may not have the skills or incentive to disrupt themselves.
BW has chosen to maintain its in-house team to gradually improve its legacy system while using Alpha Ori and others to do the "blue sky" thinking.
Of course, how much should you outsource if new processes are expected to be a key competitive advantage in the future?
It is all very well outsourcing, but what happens if that is something you need in order to be able to outcompete your peers in future, asks Sohmen-Pao.
3. How to collaborate with rivals and others?
Individual shipping companies face a real problem not with too much data, but too little. Data generated by one company is seldom adequate to garner deep analysis and insightful findings, unlike the consumer sector where customers can run into the billions.
But intense historic commercial rivalries can make effective collaboration difficult.
4. How do you deal with uncertainty about the destination?
Long gone are the days when a team put together a proposal that laid out an outcome and how much it would cost, leaving the board to decide whether or not to go ahead with the business plan.
Now sometimes all you know is that you are going to collect a large amount of data, drop it into a machine and hope that the computer is going to make some interesting insights and make sense of it.
Are you happy with that leap of faith, Sohmen-Pao asks, where you cannot describe exactly what you are trying to achieve, when you are just starting the journey, and hoping that computers will help us get there?
5. How to balance central control with trusting the front line? And what are the implications for future skills and resilience?
Central control always feels safe to those in charge, and technology enables ever more to be done from shore. But what happens when the abilities to fix practical problems quickly is lost? And what are the implications for risk management and business continuity?
It is easy to talk in superficial ways of the almost limitless opportunities for shipping companies presented by technology. It is only by drilling down to the granular detail that any individual company can start to position themselves for the changes to come.
