TOWARDS INDUSTRIAL SERVICE BUSINESS

Challenges in Designing ICT Support for the Networks of Companies

Sauli Hiippavuori, Markus Hänninen, Samuli Pekkola

Department of Computer Science and Information Systems, PO Box 35 (Agora), 40014 University of Jyväskylä, Finland

Kari Luostarinen

Metso Paper Inc, PO Box 587, 40101 Jyväskylä, Finland

Keywords: ICT development, systems integration, organization networks, industrial service business.

Abstract: Traditional manufacturing business is changing its shape to service industry. In addition to products, manu-

facturers are also providing specialized knowledge-based services. Although ICT is an enabler for such op-

erations, its support for the activities of the networks of companies is still quite unknown. In these settings,

ICT-related challenges are multifold. In this paper findings from a case study on constructing ICT support

for industrial service business are presented. Technological challenges in designing and implementing sys-

tems to support daily business operations of industrial service business are listed.

1 INTRODUCTION

Currently industrial companies are moving towards

service-oriented business operations. In other words,

they are offering different kinds of support services

to their customers. These include maintenance and

repairing services, analysis of problems or potential

problems, and fine-tuning and modifications for im-

proved performance of the machine. To enable this,

different kinds of ICT solutions; e.g. groupware and

CSCW applications, knowledge management and

expert systems, databases, and information hotels

have already been developed (Biehl et al. 2004) and

used e.g. in aircraft industry (Thompson 2004),

shipping industry (Brook et al. 2003) and pharma-

ceutical industry (Rödder et al. 1998).

Biehl et al’s (2004) stated that an infrastructure

for remote connections exist and is ready to use.

However, an efficient use and utilization of the tech-

nologies to support the operations of networked

companies is far more complex (c.f. Heikkilä et al.

2005; Shaw et al. 2005). In other words, an infra-

structure is just an enabler. The focus on technolo-

gies often ignores business strategy, organizational,

user-related, and adaptation-related issues that have

been identified relevant (e.g. Laudon and Laudon

2004; Vervest et al. 2005; Mumford 1983). As these

issues have their impact on the introduction, use, and

acceptance of technologies they cannot be forgotten.

Although we study technologies, we dive into the

complexity of industrial service business environ-

ments. We study a network of two companies with

dissimilar objectives, cultures, working practices,

histories etc. The companies have recognized a need

for tighter cooperation so that they can survive in

changing, global business environment. However,

they do not know how it can be done in practice.

Thus, in the paper, we try to identify a set of differ-

ent technology-related issues (they turned out to be

challenges) that need to be addressed by different

parties – companies operating in the network, ser-

vice providers and their customers, and the develop-

ers of ICT solutions –when developing industrial

service business.

2 RESEARCH APPROACH

The case study is performed in a network of two

organizations: service provider (a paper machine

manufacturer) and their customer (a paper mill).

A paper mill is a complex construction where

more than 10-meters-wide stream of paper runs

through the machine as long as 160 meters at almost

2000 meters per minute. A paper mill (and a ma-

516

Hiippavuori S., Hänninen M., Pekkola S. and Luostarinen K. (2007).

TOWARDS INDUSTRIAL SERVICE BUSINESS - Challenges in Designing ICT Support for the Networks of Companies.

In Proceedings of the Ninth International Conference on Enterprise Information Systems - DISI, pages 516-519

DOI: 10.5220/0002379105160519

 SciTePress

chine) is a set of interlinked machines using bearings,

rods, connectors, pumps, gaskets, cylinders, drive

belts, and numerous automation systems and com-

puters to control, monitor, calibrate and adjust it.

The machines, although they look the same, are

unique. Depending on the paper grade, they are con-

figured differently, use different kind of pulp, and

have their own history of “updates”, i.e. newer com-

puters or sensors. This complexity sets requirements

for its operating staff – they have to handle a myriad

of different systems and computers and be able to

combine that information when fixing problems.

However, currently economical situation is changing

and such expertise is not afforded to keep in-house.

Paper machine manufacturers are also struggling

with a changing business environment. New paper

machines are not bought in masses but only small

upgrades are invested. The paper machine manufac-

turers need new business opportunities, so they have

started to offer services to paper mills. In this respect,

there is a desperate need for industrial services both

at the paper machine manufacturer and at the paper

mill.

We have studied the difficulties in establishing

industrial service business. We have worked with

the companies for more than 2.5 years developing

ICT solutions to support their floor level activities.

The aim was to synchronize the workflows and sup-

port cooperation between groups of experts in two

organizations. For this numerous interviews and

workshops were organized to understand the prob-

lems and challenges of a new business model and

their implications to ICT solutions.

3 NETWORKS AND SERVICES

The changes in the business concepts emphasize

networking. In principle, the networks provide a

knowledge base with greater number of people un-

derstanding and being able to work on complex and

unique machines. The networks consist of specialists

either from the same employers (internal networks)

or from the service provider’s connections to other

companies (external networks): subcontractors, sup-

pliers, customers, even competitors. As there is very

seldom just one supplier but many delivering differ-

ent parts of the machine and of its automation and

control systems, also the skills to offer services ap-

propriately need to be obtained from several partners.

Consequently they need to coordinate their activities

carefully and implement them effectively as the

timeframe for maintenance is limited to a bi-monthly

halts of the machine.

The novelty of co-operation, different organiza-

tional cultures and lack of common practices creates

several problems. In the interviews, both paper mill

operators and service providers acknowledged that

the opposing does not fully understand the service

process, and that causes problems. Also, the lack of

contextual information has turned out to be prob-

lematic.

4 ICT IN SERVICE BUSINESS

The companies have utilized dedicated solutions for

some particular purposes. Data collection systems,

monitoring and maintenance systems, diagnostic and

process analysis tools, reporting systems, etc. are in

use. These systems and the lifecycle of a paper mill

(upgrades made on different parts of the paper ma-

chine) have led to a fragmented ICT infrastructure.

Because of the number of parties involved in up-

grades and operations, an architectural ICT design

has not been done, as illustrated in Figure 1.

Different applications, devices and systems in

use can be identified from Figure 1. For example, at

the mill the data is collected through different sen-

sors and meters in the automation systems. This data

is utilized by operators and maintenance personnel

in different applications (process analysis tools, con-

figuring and data collection tools, databases contain-

ing process history). Yet there is no integration be-

tween them or between them and the business sys-

tems. It needs to be done manually. Although the

need for the deeper integration has been identified,

the lack of indication of explicit revenues and rigid

work practices have restrained the integration at-

tempts. Manufacturer’s experts share the same ap-

plications with the paper mill personnel.

ICT has consequently two functions; as an en-

abler to create an infrastructure for the network of

organizations and for the remote services and to sup-

port the service processes. The infrastructure is

needed both inside the organizations and between

them, complicating its establishment. The execution

of service processes and the delivery of the service

products must be supported by ICT solutions and

applications. This kind of combination of different

functions enables industrial service business.

TOWARDS INDUSTRIAL SERVICE BUSINESS: Challenges in Designing ICT Support for the Networks of Companies

517

Figure 1: An example of information systems architecture in industrial services; manufacturer (left) and paper mill (right).

5 TECHNOLOGY-RELATED

CHALLENGES

Biehl et al. (2004) argued that different kinds of ICT

solutions have already been developed to support

service business. However, these solutions do not

support existing business and work processes at

large as they are utilized in solving problems in spe-

cific areas of service business (c.f. Heikkilä et al.

2005; van Liere et al. 2004). The systems are lacking

either the infrastructure or the process support being

unable to provide high-quality services. This is a

challenge when the size of the networks increases. In

our case, a number of parties are offering their ser-

vices for both the machine manufacturer and the

paper mill in cooperation. To support this kind of

joint business, a common gateway or interface

through which the organizations could interact and

share information becomes invaluable (Sihn 2003).

Deepened co-operation leads to increasingly

shared business processes. Companies can no longer

depend on their internal processes as more and more

boundary-crossing transactions and business opera-

tions become common. This sets an obvious re-

quirement also to an ICT infrastructure – how to

support shared business processes and operations

while simultaneously keeping intra-organizational

issues safe. Yet that information, e.g. order volumes,

might be essential for the service.

As the work environment is becoming increas-

ingly distributed, the importance of ICT support

increases. Solutions developed to support service

processes satisfy only the primary needs of the spe-

cialists, but do not support them adequately. Integra-

tion on both system and user interface level, as well

as in the adaptation of new systems, is a major chal-

lenge identified.

The value of the services is concretized once the

data is analyzed, reformed, and delivered back to the

customer in different forms (reports, proposals, etc.).

The value the customer experiences is dependent on

the outcome and the production process (c.f. Grön-

roos 2001). This stresses the importance of visibility

and transparency of the service processes. In our

case the customer gets only a 10-page-long report

having no means for follow the analysis process.

This could last several weeks or months, leading to

the “simple” report. The lack of visibility reduces

the perceived value of the service and may easily

lead the proposed actions to be neglected.

All this sets requirements for the development of

ICT infrastructure. Particularly the interoperability

of the different systems and applications is empha-

sized. However, in our case the only point of inte-

gration between these systems is the user. Some de-

velopment attempts have been initiated and some

improvements have been made, but the breakthrough

is still to come.

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6 DISCUSSION

Technological solutions have been developed to

overcome aforesaid challenges, but, as illustrated, so

far the value of these solutions has been close to

zero. They have been developed separately for small,

specific needs, which have resulted fragmented ap-

plication architecture that fails to support the work

processes adequately. Also, because of the life-cycle

of the paper machine, the systems at the paper mill

are developed purely for their own needs. They are

not even designed to have external connections and

to support service business as information producer.

Yet they are perceived as one by the service provider.

Integrating these solutions for a service-oriented

application architecture has been a topic of discus-

sion in the companies. Yet the task is highly compli-

cated. A generic platform and loosely-tied integra-

tion of applications is needed, but it is not enough.

As only a part of the information can be collected

from the remote systems, its correct interpretation

sets a need for contextual information. This, as

turned out in our case, becomes challenging as ap-

propriate experts are traveling between their own

organization’s sites or between them and customer

site. The question is not only having access to data

but also having access to experts.

Technological challenges for industrial service

business can be summarized as follows:

• Systems are not developed in accordance to

networked environment, and they are lacking a

dynamic and loose coupled network.

• System architecture is fragmented consisting of

separate solutions for specific purposes. Design-

ing new system architecture is needed but may

turn out to be impossible.

• Platform technology to enable service innova-

tions, development and remote service applica-

tion concepts does not exist.

• Lack of interoperability between applications

and systems in the network causes that the inte-

gration between business applications and con-

nections to external systems is difficult.

• Lack of technical interoperability between or-

ganizations does not support delivery and visi-

bility of service products.

• Applications do not form a solid entity or sup-

port workflows.

• Operational interfaces do not support fluent co-

operation or communication limiting interaction

between service provider and customer.

• Knowledge created in the service process can-

not be shared and utilized.

These are even more challenging when the transition

from product-based industry to service-oriented

business mode is considered; while we are still

struggling with technological issues, that, by solving

them, would enable industrial service business, we

are also trying to change business environment and

organizational practices. So, although all this needs

to be done concurrently, we are still in a situation

where the base, i.e. ICT infrastructure in its entirety,

is not rigid and well established. Although Biehl et

al. (2004) argued for the existence of the ICT infra-

structure, our case argues against that. In fact, we

have bits and pieces of the infrastructure, but it is not

complete or coherent. There are still several issues

that need to be considered before the organizations

can operate in a service-oriented business mode ei-

ther as service producers or service consumers.

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