The Nordic region has actually seen an increase in enterprise IT outsourcing as traditional markets try to find skills and experience in web of things (IoT) and big information technologies.

As heavy industries embrace IoT innovation around the world and become more data driven, Nordic companies are working with provider to fill knowledge spaces, create environments and offer know-how.

Barry Matthews, a partner at ISG, who directs Northern Europe, said standard IT outsourcing, where an organisation pays people to provide a service, grew by 17% in the Nordics in 2019, compared to 2018. In Europe as an entire, investing on IT outsourcing increased by 10% in 2015, compared with 2018. ISG said this development was a result of organisations’ need to reduce costs while continuing to change digitally.

ISG also found that in Europe, cloud-based services accounted for 37% of IT outsourcing. In the Nordics, cloud-based services made up 35% of agreement value, compared to 20% 3 years ago. ISG monitors IT and organisation procedure services agreements in Europe, the Middle East and Africa (EMEA) that are worth over EUR5bn (₤ 4.2 bn).

“Part of the Nordic growth is a great deal of focus on IoT. There are a great deal of makers and telcos in the Nordics that are extremely progressive, and they are ensuring the right ecosystems and connectivity remain in location to utilize the IoT,” said Matthews.

In the region, heavy markets such as machine, lift, crane and cars and truck production, along with shipping, are adopting what is called the industrial web of things (IIoT).

Swedish outdoor power tool maker Husqvarna is one example. The company utilizes IoT as part of its strategy to offer services on top of product sales. Its connected lawnmower service, part of its Gardena Smart System, utilizes the IoT. Gardeners can get a real-time overview of their garden through a mobile phone or tablet app that enables them to control and configure all their connected gadgets, even when they are on the move.

In shipping, Danish huge Maersk uses the IoT as part of systems to provide insight into the movement of products without the requirement for people to log info.

Linked to the IoT velocity is increased contracting out for information skills in the Nordics. “We are seeing a focus on huge data technology in Nordic heavy industry,” stated Matthews. “They are putting sensing units into machines and are gathering data. As an outcome, there is more outsourcing as they seek the analytics abilities they need to translate what the information indicates.”

Matthews stated this was an example of organisational redesign, which is common amongst producers in the Nordics as they change digitally. “If you have a big Swedish company where staff have actually been developing stuff for many years, and suddenly make it a data company, you require outside help to transition,” he added.

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