Creating new business in a separate unit – and entering partnerships instead of investing in-house. The engineering and design consultancy Tyréns is gearing up for digital transformation in the construction industry.
In April 2019, the engineering and design consultancy Tyréns launched a new digital business unit: Business Area X, or BAX for short. The strategy is to separate the new business from the old. “We don’t think that our managers and consultants can be best at both running our current business and creating the new. BAX provides new business thinking, while our core business units provides the engineering”, says Johan Dozzi, CEO of Tyréns.
Dozzi has high expectations on growth in the new business unit. “The covid pandemic is speeding up digitalization, the only question is by how much.”
Time for collaboration
Pernilla Thessén, Head of BAX, describes her role as an enabler for sustainable growth as the result of digital transformation. To achieve this, her workdays are focused on creating the necessary conditions for BAX experts to clarify value-added approaches and methods for digital transformation – and to create new products and business opportunities.
“We do that by combining four key things: think big, explore the new, focus on sustainable value-creation and use the know-how and skills of our core business.”
The construction and facility management industry is one of the last industries to go through a digital transformation. An important reason why the industry lags behind is the project-based approach and fragmented value chain, explains Pernilla Thessén. “This manifests itself in work processes based on analogue work methods, and business models that don’t create incentives for productivity and life cycle perspective.”
Now, this is all about to change. “It’s time to tear down the silos in the construction industry and start using digitalization as an enabler for sustainability”, says Pernilla Thessén.
Partnerships key strategy
Today, digital competence is becoming crucial for success in the industry. The world is moving towards building smart houses and smart cities – where digital solutions are an integral part.
Unlike many of its competitors, Tyréns have opted not to build digital systems in-house. Last time Digital Governance met Johan Dozzi, he explained the strategy – to team up with best of breed digital partners, to create an offer that outmatches the competitors. The responsibility of creating these partnerships lies with BAX – and Pernilla Thessén has started building a portfolio of partnerships. Two of the partners are Microsoft and the leading Swedish telecom company Telia.
“Our partners add strong platforms, proven technology and strong brands. We add industry knowledge. Our contribution to sustainable growth in the industry is larger together than if we would have done it individually”, Pernilla Thessén says.
Transformation includes business models
New digital offerings also introduce new business models. In the new digital business, Tyréns is leaving the traditional consultancy model behind in favour of productification. “We won’t offer a classic engineering solution based on billing hours, but may base it on our partners business models, which might be more suitable. Selling subscriptions is one example”, says Johan Dozzi.
Digitalization of buildings requires secure data flows between different stakeholders in the building and the city. To make this happen, organizations and other stakeholders need to collaborate. They also need to understand their own position in the new ecosystem, as well as that of others.
It’s vital that solutions are connected to the building, rather than to each individual supplier. “All we do must belong to the building. That is a key to succeeding with smart offices and smart buildings. The problem today is that when a new supplier enters, they set up their own system. And when the contract ends, they take their system and leave. When it all belongs to the building, the system will not change if the building’s owner switches suppliers. Setting this up is a big task – it’s our ambition, but it’s not easy.”
Taking position in the ecosystem for smart cities
Changing business model also opens up for new business in the aftermarket. This is already being tested in a project in the Norwegian capital Oslo – Økern Portal. It is called “Norway’s smartest house” and will go live early 2021.Tyréns is responsible for continuously delivering updated data to the building’s systems after construction. “This is a way for us to expand our business”, says Pernilla Thessén.
With the shift into building smart cities, a new ecosystem is being formed. What role Tyréns will take in that new landscape remains to be seen. But Pernilla Thessén doesn’t think that Tyréns will take the lead and head the construction of smart cities. “I don’t think that a consultancy can take the ultimate responsibility, but we can provide value-adding solutions and use our knowledge to support customers and society.”
Johan Dozzi fills in: “We will be a partner in delivering smart buildings. Whether it’s us or a partner taking the lead is not the most important. What’s more important is to find our place in the new ecosystem, and to establish strong relationships.”