Future-proofing customers’ investments
In the autumn of 2018, Wärtsilä redesigned its organisation to boost the lifecycle value that the technology group brings to its customers. Wärtsilä Marine Business and Wärtsilä Energy Business began operating at the start of 2019, covering both equipment sales and services for their respective markets.
In addition to responding to customers with better speed and agility, the new structure aids the implementation of Wärtsilä’s Smart Marine and Smart Energy strategies.
“Developing stronger partnerships with our customers and providing them with greater value is essential for reaching our long-term target of profitable growth,” Jaakko Eskola, Wärtsilä’s President & CEO, commented when announcing the reorganisation.
Wärtsilä’s leadership team were confident that the redesign would lead to more rapid development of innovative solutions and services and further strengthen Wärtsilä’s position as a global leader in lifecycle solutions for the marine and energy markets.
By the end of the first quarter of 2019, the company had already reported the initial benefits of the reorganisation in the form of improved cooperation within the business areas in developing full lifecycle offerings.
To revisit the rationale behind the change, two senior executives weigh in with their views on the significance of the new structure to their respective business areas’ operations.
“By and large, our customers have been wanting this change and expecting it. I think they will sense a more unified and responsive organisation,” says Björn Ullbro, Vice President of Energy Services at Wärtsilä.
“This change is designed to serve the customer,” states John Sydney, Vice President for the Middle East and Asia in Wärtsilä’s Marine Business. “Our customers have expected us to behave as one company from the beginning, so the Marine Business coming together as one organisation is a development that fulfils their demands.”
"The ability to provide our organisation with a single level of accountability for both Services and Solutions and “one” team that can answer all our questions or attend to all our service requirements will definitely have a positive impact on our activities."
Alioune Ibrahima, Director of Finance and Accounting, National Electricity Company of Senegal (Senelec)
A consultant and partner
“When we consider what customers value, we need to examine it from the perspective of the customer’s pipeline. When they invest millions of dollars to build an asset, that investment must perform its task. It needs to work according to their business plan,” asserts Sydney.
He explains that in certain segments of the maritime industry, Wärtsilä’s customers treat the company as an equipment supplier delivering products or components for vessels, while in others, the company has a more valued standing.
“In offshore, cruise, and LNG carriers, for example, what we supply needs to function in a technologically superior, much more efficient, and more cost-competitive fashion. In those segments, we often take a consultative, partnering role with the customer. They listen to us and they value our opinion,” Sydney says.
To illustrate, Sydney describes customers’ keen interest in Wärtsilä Marine Business’ solutions, ranging from hull designs and machinery that reduce vessels’ emissions and enable compliance with the Energy Efficiency Design Index (EEDI), to predictive maintenance technologies utilising artificial intelligence.
“Our customers want to know how we’re positioning ourselves in the market with our solutions, because in many cases there’s no other company that can supply the scope of services that we do. We have ship design specialists and segment experts who work with our customers’ teams in determining the naval architecture of their newbuild vessels based on the latest innovations for ships today.”
According to Sydney, having one integrated business taking responsibility for selling projects and providing after-sales support brings immeasurable benefits for the customer.
“It means that whatever we sell, we have to take care of for the next 20 years – or for however long the customer decides to keep that asset. To put it in a radical way, what we sell, we have to honour to deliver and look after. That in itself is already a big positive,” Sydney emphasises.
"With the change [in Wärtsilä’s organisation] we now have a single point of contact. This works very well for us a shipping company."
Owen Barry, Technical Manager at P&O Maritime’s Corporate Head Office, UAE
A single point of contact and effective feedback loop into product development
“What very few of our competitors have is the ability to combine technological edge with the lifecycle angle,” says Ullbro, shifting attention to the Energy Business.
“We are the only organisation that has a fully-owned network that serves customers from start to finish. We have a distinct advantage in being able to harmonise our go-to-market strategy and present one offer for the entire investment case,” Ullbro underscores.
Generally, in the energy business, one organisation sells new equipment, and then local agents or distributors handle the after-market side. “This can mean there’s very little incentive, or even possibility, for the equipment manufacturer to provide guarantees in the lifecycle phase. In our case today, one person is ultimately responsible for what happens in the customer relationship. Our customers can have one meeting where all of their needs or concerns are dealt with,” Ullbro says.
“Another extremely important aspect that we’ve gained advantage of by taking full ownership over the whole lifecycle is the feedback loop into product development” he points out. “A shorter feedback loop makes us more attentive and faster to adapt to evolving markets”.
"Environmental and digitalisation trends emerging in the marketplace to reach 2030 and 2050 requirements are driving change in our sector. We expect that our feedback and experiences from our operations will be incorporated in future solutions and services from Wärtsilä."
Shinya Tomita, Fleet Manager at EagleStar Shipmanagement, Malaysia
Understanding the customer’s changing business case
“Our ability to understand their business case as it changes is fundamental to our understanding of what our customers value,” continues Ullbro.
He outlines the scenario faced by many of Wärtsilä Energy Business’ customers from different parts of the globe operating in today’s energy landscape. Power companies are striving to keep pace with growing demand for electricity, while at the same time, renewables such as wind and solar are steadily on the rise.
“What happens to our customer’s operating profile? What happens to the price of their fuel? And their competitors? It’s a long time from when they start up their commercial operations to when the plant is decommissioned. A lot can change in those decades. If we look back just 10 years, the world was a very different place then. Today, there is more risk as well as more volatility coming in,” Ullbro explains.
It is amidst this uncertainty – with energy systems increasingly powered by renewable energy and supported by flexibility and storage solutions – that Wärtsilä is leading the energy system transition by designing, building, and servicing optimal power systems.
“We believe that our customers, by choosing Wärtsilä, will simply be better off. They’ll have a better earnings trajectory, a lower risk on their investment, and a better night’s sleep”.
“It’s easy to assume that plant efficiency is always the number one priority. It isn’t anymore, not for all customers. What’s increasingly important is that the power plant starts when they press the button,” Ullbro sums up.