Information flows – the key to sustainable business ecosystems

Information flows.jpeg

Eeva Vuorinen, CEO

Some time ago we wrote about sustainability from a business ecosystem viewpoint and about a methodology that ensures sustainable industrial investments for our customers.  This blog post concentrates on information flows in a sustainable business ecosystem.

In the value creation process the companies (and other actors) interact mainly by exchanging information. Information flows enable sustainable development of individual businesses and value creation for the whole ecosystem and society.

The focus in an ecosystem should be in maximizing the value of existing information (and in creating new flows using smart technology). The better the existing information can be used and processed, the better the profit generated by this data.

Some typical shortcomings are not knowing what information exists and how it could be processed and used, and bureaucratic or siloed practices that encourage to collect “wrong” or one-sided information. Hence, it is important to identify what information exists; where it is generated; and which information supports value creation and mechanisms that encourage ecosystem actors to use (and share) information in a profitable way.

“Rush to wait” – example of information flow shortcomings

In the shipping industry “rush to wait” is a common phenomenon. Below a concrete explanation of how the business models in the shipping ecosystem currently lack the big picture. A company called Napa has written a great blog about the topic, too.

Information is not collected and shared in a way that would maximize the profit from information use for all stakeholders. Stakeholders, operators, owners, ports and the society have different incentives – although a better use of existing information would benefit all parties.

-           The party ordering the shipment for its goods usually wants penalties for the ship operator in case of late arrival or slower speed than agreed. Thus, the ship operator sails at high speed to reach the destination on-time.

-           The ports give the arriving ships slots, but it is common that another ship is still unloading, and the arriving ship ends up waiting outside the port. Often the information flow from shore to ship about free slots does not work in an ideal way: The arriving ship can be informed only at a very last minute that they cannot unload according to the agreed schedule.

-           Rushing to wait is unprofitable for the ship operator in terms of fuel and other costs, and the society suffers from the emissions caused by high speeding. The companies shipping their own goods suffer from overall higher freight rates and the eventual delays. Additionally, ports are not able to optimize their operations, which also affects land logistics (and eventually the consumers) waiting for the goods to arrive.

Governing the flow of information

Since no actor alone can secure sufficient information flows, an ecosystem needs an intermediate who has the overall view of the bottlenecks in these flows. Ecosystem governance is of vital importance in both business and innovation ecosystems when mapping and improving the information flows. And don’t get me wrong, “governance” does not necessarily mean bureaucratic systems, it can just as well mean smart technology and analytics.

Visual inter-organizational relationships of actors and information flows (and of goods and money) are key elements in ecosystem governance and change.[i] The governance of the information flows is an iterative process that starts from mapping one version of the ecosystem based on current knowledge, and then re-visualizing the landscape as knowledge deepens and the ecosystem changes. Examples from recent research, in pictures 1 and 2 below, show the current and a vision of the shipping industry ecosystem (shipbuilding, sea logistics, and production planning). The vision of the ecosystem demonstrates increased transparency, information integration, and collaboration in order to increase the total value production of the industry.[ii] It is important to bear in mind that the actors who use the information vary from situation to situation: Some actors generate information; some strategize on the information; and some use the information in operations.

20180207 - Sustainability information flows 1.png
20180207 - Sustainability information flows 2.png

I hope this blog gave some insight to how important it is to find a mutual benefit that encourages all actors to commit to share and create relevant information in the ecosystem.


[i] Tsvetkova A., Nokelainen T., Gustafsson M. and Eriksson K. (2017), A Framework for Ecosystemic Strategizing and Change.

[ii] Gustafsson M., Tsvetkova A., Ivanova-Gongne M., Keltaniemi A., Nokelainen T. and Sifontes Herrera V. (2015), Positoning report. Analysis of the current shipping industry structure and a vision for a renewed shipping industry ecosystem.