On track to transform disruption into opportunity

Eduard Matús, CEMS Alumnus and Marketing Manager ON!Track, and Josef Plachý, Talent Acquisition and Development Manager at Hilti, Eastern Europe, drill into the CEMS-Hilti business project to explain how the construction and maintenance giant harnesses digital disruption to provide innovative customer solutions

Digitalization revolutionizes a traditional industry

With its 24,000 employees in over 120 countries worldwide and regional hubs in Europe, North and South America, the Middle East and Asia, Hilti is an established leader in what initially appears to be a traditional sector: construction, maintenance and energy. But drilling down beneath the surface reveals that the digital revolution is just as present in Hilti’s field as any other, apparently more tech-friendly, sector.
The last five years have witnessed the influence of digitalization on all the phases of the construction business. The most visible of these has been the use of smart technologies to improve a building’s functionality: predictive maintenance, wireless retrofits and the use of sensors to tailor lighting and thermal comfort to individual household needs. However, digitalization has also impacted the more traditional side to the industry with the emergence of smart tools and automated processes throughout the whole range of the construction phase. Engineers working on the early phases of building design and infrastructure have moved from 2D technical drawings to 3D models of future buildings and even virtual reality tools have recently found their way into the industry, allowing investors to have a more life-like experience of their future home, office, shopping center or factory. Of significant importance is the fact that digital technologies are now influencing how construction companies run their job sites as well as their logistics. Put together, all of these changes are resulting in both the speeding up the construction process and the increasing of overall efficiency.

CEMS Hilti Business Project Team 2017 (l to r): Michal Vacko – Hilti, Jaroslav Ploc – Hilti, Eliška Machácková – CEMS student, Mariya Belcheva – CEMS student, Petr Báša – CEMS student, Aakash Ahuja – CEMS student, Josef Plachý – Hilti, Eduard Matús – Hilti

The Hilti-CEMS business project

It was in this context that in the spring of 2017 a group of three CEMS students and two internal Hilti talents focused in Hilti ON!Track – a cutting-edge asset management software package that is a direct result of the influence of digitalization in the construction industry. The team’s assignment consisted in investigating competitors’ offerings in the asset management area. Combining their knowledge earned through academic studies with global guidelines and best practices from successful pilot projects abroad, the business project team crafted guidelines for marketing and sales in Hilti Czech Republic headed by Eduard Matús, himself a CEMS Alumnus and now Marketing Manager ON!Track for Hilti Czech Republic and EE-EU. Greatly appreciated by the Hilti management team, special mention must be made of the team’s final presentation of the project outcomes which both consolidate market vision and awareness and contribute to the insights featured in this article.

Innovation is an on-going process that has to be on track with customer needs

For an organization to survive and grow, innovation is paramount. And although the temptation is to view the present as where it’s happening, stepping back in the company’s history enables us to see that innovation and technical disruption are nothing new. Among professionals in the field, it is widely recognized that Hilti’s direct fastening solution, for example, allows workers to fasten electric cables and pipes 10-15 times faster in comparison to traditional methods: and these first direct fastening tools were launched by Hilti back in 1957. The difference today is perhaps the speed at which digitalization has influenced the rate of technological innovation and change.

While a challenge, technological disruption forces organizations to look for radical leaps and, as in the case of Hilti, to take big steps in broadening their product portfolios. The company now offers not only products for a jobsite but also provides an effective asset management solution, helping companies to handle all the tools they require for their operations. Baptized ON!Track, the solution is technically an asset management and tracking software tool, but the related services that Hilti has tacked on are much broader in their scope and impact. In a nutshell, the software helps to make an in-depth analysis of the all the assets possessed by a customer, whereupon these are tagged and recorded in the software system. This opens up a whole new vista of practical applications to the client that cover anything from tracking equipment and minimizing loss, optimizing the fleet park, saving time on inventory audits and speeding up the reassignment of products from site to site. In addition, the system also supplies handy data on frequency of usage and the movements of each asset and future applications are under study regarding purchasing, leasing and rental decisions.

Digital disruption brings challenge: re-shaping the company’s structure, processes and employee skills

Selling, implementing and maintaining an innovative digital solution clearly involves different skill sets in comparison to operations connected with traditional construction-sector products. It also means dealing with a much broader range of contacts at the customer site. As such, employees suddenly need to understand specific customer concerns and answer questions regarding not only the people involved in the construction work but also, among others, the supply chain and finance. For customers, the implementation of new technology solutions represents a change in their internal processes and also significant investment on their part. In this context, the ON!Track experience has seen a shift in the negotiation pattern, with customers assigning senior management to discussions. For the bringer of solutions, introducing such a tool means entering a business area traditionally dominated by ERP system providers – a challenge but also an opportunity for companies to acquire new skills and know-how right across the organization.

For innovation and the offering of new technology necessarily adds a rush of adrenalin to operations. New teams have to be swiftly built and deployed in the field to cater not only for system roll out but also for the issues generated by change that the customer will or may experience – resistance to the new, training and coaching needs, reassurance and technical support. Team mix too has to cater for the new challenge, composed not only with the solid base of experienced, existing internal sales teams but calling upon new talent from outside the company skilled in digital solutions and consultative due diligence. At Hilti, this new combination of skills has led to the creation of a new global organization structure, with enormous focus being given to close international cooperation and instant experience exchange between the national teams.

The era of new technologies does not mean the end of the human touch

Despite the age of digitalization, Hilti’s purpose remains the same – to passionately create enthusiastic customers, build a better future for all the stakeholders and at the same time, aim for a strategy of sustainable value creation via leadership and differentiation. The company’s business model remains firmly cemented in building strong long-term relationships and this necessarily calls for trust – something that the company sees as its main advantage over its competitors. Moreover, this notion of trust is all the more important when considering that providing new digital solutions such as ON!Track widens the competition to IT companies, typical providers of ERP systems. But it is precisely Hilti’s legacy and reputation in the construction field that makes a difference: selling to your own people, knowing their business, and tailoring to specific needs makes that trust even more solid. In the end run, the lesson learnt from the Hilti-CEMS ON!Track experience is that while people need machines and software to do the job, to make potential savings, to optimize the supply chain, machines and software need that all-important and unique resource – people – to make it all happen.

Matús Eduard, Josef Plachý, Management Team of Hilti Czech, as well as visiting GM’s of Slovakia, Hungary and Baltics highly appreciated outputs of the student’s work

• To obtain a greater insight into the Business Project from participating students, please refer to the article in CEMS Insider – the CEMS Club Prague magazine.
• 4th-8th September, 2017 at the University of Economics, Prague: Block Seminar on the topic of Business model innovation in the context of digital disruption organized by CEMS Prague in partnership with Hilti.
• Explore internships, management trainee program for graduates and other opportunities in Hilti at careers.hilti.com