It was a real pleasure to attend Cognizant’s Norway event designed to light up the future of work and the future of Norway. The country feels that it’s at a crossroads but understands how the shift into software is changing how its firms capture value. What we learned during the day was how industrial processes are becoming infused with data. Buried in the data is meaning and that can radically shift a cost structure downwards.
First some backdrop: Norway did a smart thing with its riches from the 1970s oil boom. It has the world’s largest sovereign wealth fund set up to manage the huge profits Norway generated from the black gold lying underneath the North Sea. To say its done rather well is an understatement: it has just under €1 trillion in assets, while its net worth was recently calculated at €164,000 for every single one of its citizens alive today. Interestingly, those responsible for running the fund are beginning to make noises that perhaps the time has come to stop its global investments in oil and gas. The reason? It wants to make the government’s wealth less vulnerable to a permanent drop in oil and gas prices.
What intrigued me was hearing that Norway’s sovereign fund holds one of the largest positions on Alphabet, Amazon, and Apple etc. i.e. those companies that make meaning and an awful lot of money from our data. You would think that the large contingent of oil and gas customers present at our event would be downbeat, but not a bit of it. In fact, it was fascinating to hear how this particular sector more than any other is using super-powerful computers, data mining techniques and advanced algorithms to increase yields and drive efficiencies. One particular presentation struck a chord with me, and that was from Kvaerner and its impressive CIO, Frode Strand
By now you will know how much I like to talk about platforms, so it was fascinating to hear from a company that builds real, physical platforms and at HUGE scale (my childhood passion for Meccano reawoke). These platforms are used to drill for oil and constructed from hulking steel structures called jackets that sit out in the North Sea and endure. We learned how the designs of these huge rigs vary depending on height and geology. Of course, they cost an eye-watering amount to build. We learned how Kvaerner is beginning to use machine learning to drive the better design of these jackets because they were so darn expensive to build. Who knew that the design decisions of where to put the braces could vary quite so much with massive ramifications on cost and profitability? The placement of braces; the number and position of brace rows; the location and elevation of the legs that plug into the sea-floor; the joint optimization etc. the list goes on. A tiny miscalculation throws out the jacket and can cost millions to the bottom line.
The CIO saw this as an “optimization challenge” and wanted to build a model and use data and algorithms to generate and analyse various designs to arrive at a viable solution quickly. Do that, and he surmised, he reduces the cost of steel needed to build the rigs and the overall build time. Do it right, and Kvaerner would save millions in raw material and manufacturing costs. He set out to design an algorithm and deploy the massive computing power needed (a mix from the cloud and onsite from what I could gather) to generate and analyse the various designs and to arrive at a viable solution quickly. This design would then be optimised for weight and/or cost and/or build time. And he did according to his slides. His model has several thousand parameters with constraints and rules programmed in. The resulting algorithm works and looks set to be monetized. Go and see him speak to hear the story – like I say it was fascinating to hear and a very unexpected and enthralling 40 minutes.
There was something very real about what Kvaerner are doing. In this accelerated world of digital where we obsess over customer experience and their “next best actions”, it is worth remembering how our physical world still matters. These wise words from our very own analytics and AI lead at Cognizant James Jeude who also presented at the event really brought it home:
"Everything we touch, own, or use ultimately comes from mining, fishing, or farming."
I couldn’t agree more. It is a profound thought when you think about it. James gave a very illuminating presentation on the definitions of AI and explained his three M model (machinery, material and model). I would recommend reading his work on Storytelling and AI because it teaches the art of fact-based storytelling that not only informs but inspires meaningful decision-making and keeps key stakeholders aligned and engaged. Something we saw from Mr Strand in spades.
At the end of the event, we heard from the incredible, gutsy Karina Hollekim who was one of the world’s best extreme sports athletes until her parachute failed to open after doing a base-jump (she had it live on camera too, so it was painful to watch that jump unfold). She was predicted a life in a wheelchair but came back a winner. She is fully mobile and skis and hikes again. Talk about grit; she is indomitable. It was a story to remember.
P.S. You know you are onto a winner when the host for the event nonchalantly explained how he had hot-footed it from Windsor Castle after performing for the British Queen and Prince Philip to celebrate their 70th wedding anniversary the night before! His flying table trick left both them and us questioning our senses...