Report on Deutsche Welle TV program – How Klöckner & Co became a digital pioneer with the help of etventure
12. February 2016
The digital revolution is turning the business world upside down. Traditional industries that at first glance have nothing to do with the digital sector can no longer ignore new technology. One such example is the steel industry. This topic was addressed during a program on the Deutsche Welle TV channel. As an example, reference is made to steel trader Klöckner & Co, a company that etventure supported with the process of digital transformation. Next week, etventure will also be presenting its solutions at the 2016 “Stahlmarkt” steel conference, one of the most important events in the steel industry’s calendar.
“If the steel industry itself does not open the door to the digital world, other players from outside of the world of steel will create their own digital opening,” says CEO of Klöckner & Co Gisbert Rühl during the program. Klöckner was one of the first companies in the steel industry to recognize the importance of undergoing this change. With the support of etventure, the steel trader therefore established its own startup called “kloeckner.i”. “Traditional companies are not necessarily incompatible with a startup mentality,” explains Alexander Franke, Managing Director of etventure business ignition GmbH. Indeed, in addition to having decades of experience in their sector, industry giants such as Klöckner & Co also have a global business with existing clients. “Companies can no longer afford to rest on these assets,” says Franke. “Instead, digital transformation should be executed in such a way as to make the best possible use of the advantages that already exist.”
Klöckner & Co has succeeded in doing this, as evidenced by the numerous digital solutions that have been developed since the founding of kloeckner.i. These solutions include an online contract platform that clients, such as large plant manufacturers and finishers in Europe and the USA, can use to view and manage their ongoing orders and deliveries. The platform also goes to show that beginning the process of digitization does not always mean that the existing business model has to be completely changed. What is crucial is that the first steps move toward user-centered solutions that immediately add value. “The most important initial step is the successful market roll-out of initial digital flagship projects. Combining this with the development of in-house digital expertise at kloeckner.i is generating a sustainable competitive advantage,” says Alexander Franke.
But why is it necessary to have an independent digital unit like kloeckner.i? It would still be possible to implement gradual changes from within the company itself. But in the video, Gisbert Rühl explains that when it comes to the radical transformation required for digitization, a separate digital unit like kloeckner.i is necessary. At kloeckner.i, the aim is that innovation is facilitated not only by this disincorporation from the normal corporate structure but also by the digital unit’s working practice, which is very different to conventional approaches to product development. Rühl’s view is that German companies are often too sluggish because they only want to sell products that are perfect. In contrast, kloeckner.i uses innovation methods straight out of Silicon Valley. Instead of perfect products, it begins by developing solutions that meet the minimal requirements, which are known as minimum viable products (MVPs). These products are then continually refined, in partnership with the customer.
“Startups and the steel industry – successful digitization using startup methods” – this is the title of the presentation about the partnership between etventure and Klöckner & Co that will be given by Alexander Franke at the “Stahlmarkt 2016” conference. This annual conference is organized by the Handelsblatt business newspaper and takes place in Düsseldorf next week, on February 16 and 17. It is a major event in the steel industry’s calendar. etventure is sponsoring this industry convention and will also be exhibiting at the event.
Below is the entire Deutsche Welle program (in German). The report about the digitization of the steel industry begins at 8 minutes 35 seconds. Following on from the report, Joachim Bühler, a member of the management board at Bitkom, explains how digitization is affecting job descriptions and the labor market, and what companies need to do in order to be equipped for the digital future.