The services cannot be designed and manufactured in isolation, like products. They are co-created with the customers and are interdependent with wider service networks and clusters. (Gray and Vander Wal, 2014, p. VII)
This Saturday evening I started my spring season by taking my ‘new’ wooden river boat to its maiden voyage at the Oulu River delta. The boat is equipped with some nearly 20-year-old Evinrude 2.3 hp 2-stroke outboard motor, a pair of oars and other types of important ‘river boat stuff’. The boat may not be new, but it is new to me. I bought it two weeks ago from a good friend who had kept it in an excellent condition for a past couple of years.
The first times are the riskiest ones so I was well prepared, in a Nordic manner, with safety first attitude including life vest.
The first half an hour I did use for waking up and warming up the outboard motor after its 6 months of hibernation through the arctic winter. The old 2-stroker showed it has a life of its own and at least semi-autonomous decisive power. Small wound in my right hand reminds of the first half-an-hour negotiating with the outboard motor. However, gradually I learned the tricks and everything worked just perfectly for the rest of the trip. Starting up was a true experimental learning process.
Value created in a network
During the voyage I passed by the Stora Enso Oulu mill and the Port of Oulu in +3 - +1 Celsius degrees enjoying unlimited fresh air, mild wind, and the evening sunlight. The view next to the pulp and paper mill reminded me about the challenges and opportunities that Nordic SMEs currently face in their business development in the context of process industry customers. The difference in scale between SMEs and their global customers is often comparable to the size of a river boat and a pulp and paper mill. No matter how large or small the business is, value is created in a network. A company cannot create value on its own; value is co-created through exchange (Gray and Vander Wal, 2014) in a networked economy. Companies develop value proposition but their customers must accept and use it in order to create value.
ProcessSME project enables cross-border networks
Value co-creation requires relationship in a network and that is what ProcessSME project funded by Interreg V A Nord is all about. ProcessSME project seeks to enable value co-creation in a cross-border network of:
- SMEs that are suppliers to process industry and are aiming towards providing innovative products, services and further advanced offers, and who aim to entering new international markets
- National and international process industry (i.e. oil and gas, energy, pulp and paper, mining) companies that are willing to buy product-services and further advanced pffers, by doing so striving to improve their effectiveness and competitiveness
- Research and industrial organisations that want to participate in and improves SME networks within the region and to obtain input about current challenges concerning process industry
New forms of advanced business models
The trend in the process industry has been for a while towards advanced services characterized by long-term contacts, pay-for-use principle, cost-down commitment and advanced risk management, to mention few. The former services supporting products are developed deeper in the customer’s processes towards services supporting customers. The current business models in the Nordic process industry SMEs are product focused and the need to transform towards service focused value generation is growing fast.
The rapidly growing ProcessSME partner network provides support for SMEs in finding the needs and opportunities, developing new business models, building European partnerships, applying for EU-level funding, and further to develop SMEs products and services.
The first Finnish workshop for SMEs in Nivala
Business Model Innovation and Internalization of Process Industry SMEs (ProcessSME) (http://process-sme.eu/) project is coordinated by Lapland University of Applied Sciences. Other project partners are Norut Narvik, Narvik Science Park, Luleå University of Technology, IUC Norrbotten, University of Oulu, Nivala-Haapajärvi Subregion Association and Industrial Park in Nivala.
In a workshop series concerning Business Model Innovation for Selling Advanced Services in Process Industry SMEs organized by University of Oulu, Lapland University of Applied Sciences, Industrial Park in Nivala and Nivala-Haapajärvi Subregion Association (Nihak) and the process industry SMEs, the northern Finnish SMEs are brought together with the research and industrial organisations to co-create advanced service business models for their process industry customers. The first workshop will be organized on the 2nd of May 2017 at Nivala and the following ones in Oulu and Kemi will follow soon. This workshop is the first installation in a series of workshops organized by the Finnish project actors on this topic.
Yes, I did see an ‘iceberg’, a small one though, while cruising the Oulu River delta downstream. However, the fear of failure should not be an excuse of not chasing your dreams. You are most warmly welcome on board!
Matti Muhos, Research Director, MicroENTRE, University of Oulu