Sarah talks with Andrea Pelizzaro, Connected Services Manager, BU Decanters at Alfa Laval about the company’s multi-faceted approach to digital transformation. From the role of digital tools internally to optimize the customer experience to how to leverage digital to build next-generation services to meet customer needs, Andrea discusses the evolution, lessons learned, and what comes next.
Sarah Nicastro: Hello, everyone. Happy to be here with you today and excited to have Andrea with me. So just to, for a quick introduction of myself, and then I’ll ask Andrea to tell you a little bit more about him. So I am with IFS. I actually I’m the creator of a thought leadership platform called Future of Field Service, where I write content as well as host a weekly podcast. So I had the good fortune over my career, which at this point is about 14 years to interview companies almost on a daily basis about their journeys in transforming their businesses, seizing new business opportunities, leveraging technology, et cetera. So it is a very, very great job that I’m happy to do and excited to have this conversation with you all today and with Andrea. Andrea, do you mind telling the audience just a bit more about yourself and your role at Alfa Laval?
Andrea Pelizzaro: Yes, of course. So first of all, hello everyone. And thanks for joining this session together with me and Sarah this afternoon. My name is Andrea Pelizzaro and I’m responsible for Connected Services within BU Decanter. I started actually introduce Business Unit since may this year, but previously I was working as responsible for Business Development within the other business unit boiler still in Alfa Laval. I would say that I have several years of experience when it comes to business model innovation and IoT and I’ve been working in different industries, but now I’m fully attached to Alfa Laval, of course, and I will do my best to explain you actually a bit more about what we are doing today.
Sarah Nicastro: Awesome. Thank you, Andrea. So we are here today to talk about two sides of the digital coin. So what we’re going to be exploring in this session is the role digital plays both internally when it comes to helping you optimize and improve the customer experience, and externally as it relates to leveraging digital as a part of your customer value proposition. So two super important ways that digital tools are being leveraged by leading organizations today. A lot to consider, a lot of areas where you can go astray, and some lessons learned coming out of those, and some thoughts on where things are heading in both areas. So Andrea, with that being said, to start can you share a bit about, from the internal side, looking for Alfa Laval has leveraged digital to streamline and optimize its customer experience. So can you talk maybe about any major milestones and, or next areas of opportunity for that internal use?
Andrea Pelizzaro: Absolutely. So first of all, when it comes to, I believe our focus, especially when it comes to my job on the service business, I think one of the major milestones that we have seen or that we have been able to introduce within the customer experience nowadays is related to the user job remote guidance that is basically a software that enable us to be closer to our customer when they need to have support from remote and have the opportunity to be connected with an expert from our central headquarter. I think this is definitely a quite important advantage that we have been able to create, especially with regards to the challenges that we have seen during the COVID period. But of course this will be used more and more in the future, and that is actually our expectation.
Sarah Nicastro: Mm-hmm (affirmative). So Andrea, I have the benefit of having a little bit of insight on Alfa Laval’s use of IFS Remote Assistance. And one of the things that’s interesting, not just with Alfa Laval, but with some other customers who deployed that solution during the pandemic is how it was used initially as a response to enable business continuity. But the way that it can evolve as the COVID circumstances diminish or change to be a part of the overall service delivery mix. So in a COVID situation, particularly in the early days, you had situations where travel was restricted, technicians couldn’t get on site in a lot of scenarios and you really needed to act fast and figure out how you could still support your customers. Even as those circumstances change, it becomes a valuable tool to help you just have options for service delivery.
Sarah Nicastro: So to look at perhaps a remote first scenario, or to your point to even leverage it from internal Alfa Laval expertise to frontline workforce, or a number of different ways. And so I think one of the key themes when it comes to digital is being a bit more agile, not in the sense of software development but in the sense of mindset. Right? And thinking about what does the customer need? How can we meet it? If that changes or circumstances change, how can we quickly adapt as best we can using some of these tools? I think the pandemic was a really good lesson for folks that were lagging a bit with their digital investments that it is very important to have these tools in place. Do you have any other thoughts or comments around looking at ways Alfa Laval is helping optimize the customer experience?
Andrea Pelizzaro: Yes, of course. Then if we focus on, let’s say the capital sales side, so for new projects, I would say that the way that we are leveraging digital in general, it’s through lead generation. So we tend to work more and more through an online customer journey instead of having physical meetings or looking for the right person to talk with over a meeting into an office. Now we leverage a lot on digital campaign and the opportunity to target directly the right decision maker in order to of course, enable more businesses. So I think that is definitely something that many companies are working on, but especially into the industrial business is another important emerging trend I would say.
Sarah Nicastro: Yeah, I think you mentioned a critical term, which is customer journey. And one of the biggest issues that we see right now with digital is the siloed approach. Okay? And I think what that really comes from is looking at digital and doing so in a way of how to solve a particular problem, which is important. We just talked about remote assistance and how that was incredibly useful in a specific issue. But it also plays a bigger role in the company going forward. And we can’t just look at digital investments to solve a point specific problem without reflecting on their impact on the customer journey. So I think that one of the keys to digital success is really breaking down these internal silos and looking at that overall customer journey and making sure that it’s seamless.
Sarah Nicastro: I mean, customers want simplicity, they want ease, they want peace of mind. And digital can either be an incredible enabler of that, or it can be detrimental to that type of experience if it’s not done well. And so I think that term customer journey is really the key to looking at your internal use of digital and looking at it from the perspective of how your customers will experience that and reflecting on what’s that experience like. Is it as simple as it needs to be? Is it as streamlined as it can be? And use that to guide your investments and your strategic initiatives.
Andrea Pelizzaro: Yeah, absolutely.
Sarah Nicastro: So good. All right. Let’s shift gears a little bit, Andrea, and talk about the use of digital in creating new and differentiated customer value propositions. So tell us a bit about what this looks like for you in your role at Alfa Laval in the Decanter’s Business Unit.
Andrea Pelizzaro: Yeah. So when it comes to what we are currently trying to shape as a new portfolio of, let’s say services based on big data or IoT, we have different product families at the moment that we can leverage. And actually we start from something that could be very simple, that is a remote support and monitoring solution that is slightly different compared to remote guidance, because in that case, our customer will have the opportunity to remotely monitor their asset from everywhere and get support in case of troubleshooting. To the journey that we are basically working at the moment that is related to the predictive maintenance. That is another extremely important aspect that we want to tackle in the near future because we can clearly see the advantage of having this solution when it comes to support the customer in optimizing maintenance interval, for example. And so we would drive to cost savings.
Andrea Pelizzaro: So these are basically the key solutions that we offer. I can tell you as well that according to my previous experience when I was working in the marine industry, we were leveraging actually the knowhow that we have as a company when it comes to create specific support to our customer in order to operate in a proper manner the equipment that we provide. And I think it’s key and where we have still a clear differentiator compared to IT companies, for example, that pop up in the market presenting their digital tool that are based purely on algorithm. I think the knowhow that OEM can provide in this case is still quite extensive. So yeah, that is basically what we are, I would say, bringing into the market at the moment. But of course, there’s a lot of ongoing development for future innovation.
Sarah Nicastro: Mm-hmm (affirmative). Yeah, so the point here is you’re absolutely right. So you as the OEM, you hold a ton of expertise and knowledge and wisdom, and digital is really what helps you depart that upon your customer base. So I think more and more of what we see is customers are not buying products. They’re not interested in buying a product or a service. They’re interested in buying an outcome, an experience, a form of assistance, something that will remove a burden from their daily lives. Right? And so by leveraging digital, by obtaining this data, by making this data useful, by using that to help your customers with their problems, you’re delivering the type of value proposition that people are interested in today. And so I think that that is super interesting.
Sarah Nicastro: Now, what are some of the key drivers of this that you hear from within your customer base? So you mentioned cost reduction, you mentioned the need to leverage Alfa Laval’s knowledge to help train and ensure proper use of the equipment. Are there any other customer needs that are really driving the development of these digital services?
Andrea Pelizzaro: Yeah. I think one of the key drivers that of course is always top of mind from our end is the opportunity to provide, first of all uptime, because in most of the cases this is key for the customer. If you think about a plant in the food industry that you are running couple of decanters, and at some point one of those breakdown, you can have a customer that can potentially have, I don’t know, an entire line stopped for a day and they have a huge loss. So we need to provide of course this uptime, it’s definitely key for the customer. But I would say that as well performance is extremely important because in most of the cases what we have seen and here again, I relate to my former experience within the marine business. But of course, this is something that we see a clear trend within the food and water business as well is the fact that in some cases, the operator on site, they are not able to utilize the machine always in a proper manner.
Andrea Pelizzaro: So the opportunity from the OEM side is to provide recommendation in order to have actually the 100% performance from the asset that they are utilizing at that moment. So I think those are extremely important as a driver. And then I would say as well, that the fact that now we are in a connected world and especially we have asset located everywhere, it’s extremely important to be capable in monitoring from remote your asset. We have companies that are getting more and more mature in the IoT side, and that means that they are basically creating organization responsible to keep track about the processes of machines that are maybe 1000 kilometer away. So that’s another of course, driver that we need to take into consideration.
Sarah Nicastro: Yeah, that’s a good point too Andrea is in different industries and the differences in the customers they serve, this varies greatly. Some customers actually have less and less internal expertise. And so they need to rely on their suppliers more and more, or their partners. In this case, you bring up another really good point which is, you can’t allow the digital aptitude of your customers to outpace your own digital aptitude. So you need to ensure that you are staying ahead of their appetite for these things by prioritizing digital solutions, investing in innovation, et cetera. So that’s a really good point as well. So looking ahead, Andrea, if you think about what the next 12 or 18 months will bring either within Alfa Laval specifically, or just in the use of digital in both of the ways we’ve discussed today. What are some of your thoughts on where this is going to head?
Andrea Pelizzaro: I think in general the trend that we are seeing more and more within our industry is the fact that we have customer that are getting more and more mature when it comes to let’s say, the approach of as a service. So it means that they are starting to think more, as you said, as the output that they can get instead of the hardware that support them in order to get this output. So I would imagine that in the future, we will be able at some point, and I don’t know exactly when, because of course I’m not able to predict it. But my expectation is that we will be able to sell our piece of steel tied to a service agreement that is based on the output that they need. So they will not think any more about the transactional business, but more as a subscription based model for example.
Andrea Pelizzaro: That could be definitely something that I’m already working or as a company we are taking into consideration in every indigenous industry that we are engaged on. And then I would say that a potential challenge that I see when it comes to OEM like us, is the fact that we need to be better maybe in conveying that even though we have been working for centuries, let’s say within the piece of steel industry, we are trying to go beyond the steel. And in this case, we want to be recognized still as a solid company when it comes to provide a digital solution. So I think this is an important aspect that we need to take into consideration into our journey to be more capable in showing our capabilities when it comes to IoT.
Sarah Nicastro: Yeah. So, boy that brings about a lot of thoughts, and I know we only have a few minutes left. But just to comment quickly on those things, Andrea, I think the second part of what you said around what is the company known for, and what is the story you’re telling to your customers and prospective customers, and what’s the identity. That is such an important point. And it is an area where a lot of companies struggle because it is a change in what and who the company is. And it is a very big cultural shift in a lot of ways to doing business differently and introducing these new business lines and business models. And that part in and of itself can be very challenging. And I think it’s a point to bring home for folks, which is, that area deserves a lot of attention. I think going back to my point earlier about silos.
Sarah Nicastro: I think one of the very important first steps is to ensure that you have alignment on what the company wants that identity to be. Because when you have different divisions, different business units, different functions, all sort of telling a different story, it doesn’t add up for your customers. And so you need to decide cohesively what’s the story we want to tell. Who do we want Alfa Laval to become. And then make sure that you start managing that change and getting people on board with that. So let me pause there and just say that if anyone has a question, please feel free to type it in. We have just a few minutes left. I’m going to keep talking with Andrea in the meantime, because I actually have a couple more questions for you, Andrea, that I’d like to get to. But if the audience would like to ask anything, please feel free to add that in.
Sarah Nicastro: I wanted to go back to the as a service point that you made as well. So I recorded a podcast yesterday that will publish in a few weeks’ time with Dave Mackerness from Kaer, and Kaer is in Singapore, K-A-E-R. And they provide cooling as a service. And he had some really good insights on just why they’re passionate about the business model, why it works for their customers. Actually, how it ties to sustainability, and really helps the environment, and the benefits that it’s brought to the company. So I think your premonition that you can’t predict if and when Alfa Laval will get there, but overall things are moving in that direction. I think is absolutely, absolutely true. Andrea, with the couple of minutes we have left, are there any lessons learned you can share from your experiences in the company’s digital journey?
Andrea Pelizzaro: Yeah. I think first of all, I have seen, and we still see actually some challenges when it comes to, think about the standard that different industries should put in place in order to make this journey a little bit easier. Because from time to time, you get caught into, I would say, a conundrum of different directives based on location or based on industries that will not give you the opportunity to standardize and have a similar approach compared to the competition. That in the end, of course, you can pretend that you would be able to provide that to your customer the entire package of the solution that you have into our portfolio. But we know exactly that the customer are not looking for, for example, 20 different platform. They want to have one single platform where they can access all the data and so on.
Andrea Pelizzaro: So this is definitely something that I’m always trying to think about when it comes to the journey that I’m in. But at the same time, I would say that an important lesson learned would’ve been the fact that partnership and collaboration in general is key into this journey. We cannot pretend to work as a company always trying to produce everything on our own because we need to get the expertise from other places. And especially sometimes we can complement each other. So I think it’s key the fact that we can leverage on the expertise that we have in house, together with something that we don’t have in house. Of course, in the future, we will get better in filling the gaps. But I would imagine that even the fact that we have used in remote guidance IFS is because we were not capable in producing something on our own. And I think it has been a success in the end. So I think it’s definitely an important lesson learned that we always take into consideration.
Sarah Nicastro: That’s a very good point. Well, Andrea, thank you so much. I know we are out of time. So Andrea, thanks for being here with me. Copperberg, thank you for having us. We have some additional content on Alfa Laval and others at futurefieldservice.com. So would love to have you visit us there. And I appreciate the chance to come and spend some time with you all today.