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Transforming shipping to a digital enterprise

Interview - October 4, 2018

Capt. Rajesh Unni discusses how Alpha Ori Technologies is transforming the multi-trillion dollar maritime industry from analog, disjointed systems into smart digital enterprises, and explains the value creation it offers its client base, which includes big organizations like the Maritime and Port Authority of Singapore (MPA) and ST Engineering.



Could you tell how Alpha Ori came to be?

Ninety percent of world trade goes through shipping. I don't foresee that changing dramatically in ten or fifteen years from now. Of course, there's a lot of protectionism. There will be a lot of 3D printing and other technologies that will move this logistics supply chain a little bit. It will change the way commodities are moved around. But there are still certain opportunities that are available in traditional shipping. Instead of looking at it as disruption, I would rather look at this as enabling to optimize and utilize this set a lot better than what it is currently.

If you look at shipping as a whole – the asset when you look at the ships, the hull, forms – there has been a lot of R&D that has gone on in optimization. If you look at the engines that propel these ships, there's a lot of research and development that has gone in as well. As a result, what has happened is that there are a lot of embedded systems that have gone on top of typical machinery.

Like what Singapore is doing, Singapore is a great place in terms of the ecosystem that they built. They built differential markets to support you, they built great institutions that can support you with talent and they also build a network that you can customize for your needs. The ecosystem is what differentiates Singapore compared to most of the countries.

On a ship similarly, while I'm drawing the analogy is that there are some great pieces that have already been built and will continuously be built. But they need people to connect this and make some sense by connecting these two. Ships are huge investments in terms of capital. The markets today are not generally justifying such investments because the top line is what it is. Then there's a lot focus on the OPEX today and how to operate a ship more efficiently and more cost effectively.

We went into the moral climb to see where the value creation can happen. The hardest part is understanding where we can capture the value creation. A ship owner wants to see how their value capturing works out in dollar and cents today. It’s about how to use data in a way that’s affecting the bottom line, improving safety, improving operational efficiency. That's where our focus is. Because we have a combined experience of tech with some of the operating experience that we carried through for twenty-five odd years.

Now, we're saying, can we remove some of the pain points and help these asset owners to maybe use the assets a little bit better. The key is to be able to draw insights out of the data. While we want to work on hardware and make it as easy and cost effective as possible to get as much data we can pull out, the key is not there. The key is to be able to develop insights in a useful output data that can help port operators and all the stakeholders – whether it's a commercial operator who operates the asset, whether it's the asset owner who owns the asset, whether it's the crew member who's sailing on the ship.

Our approach is about finding how useful our tools are going to be for them to carry out their daily tasks safely and efficiently. We are not looking at disruption, it will happen maybe 15 years from now. Our focus is today. We look at how we can be useful to all the maritime stakeholders, whether it's the port, asset owner, asset operator, the financial institutions that lend money to these asset owners, etc. All the applications that we built have to align in these focus areas, otherwise we are not going to build.


The government came out with the sea transport ITM, the AMC 2030, the investment in the new Tuas port. Can you comment on the need for Singapore to continue upgrading its value proposition within the maritime industry to remain a key player?

The best thing about Singapore if you ask me in one word is execution. They're very good at execution. A lot of people plan but there is a big difference between planning and execution. It takes some effort to move from a planning stage to an execution stage and that's where Singapore does it very well. Instead of always debating ‘what's in it for me’, they move the discussion very quickly to ‘what's in it for us’. They're able to move that discussion towards execution. Now that you have determined what's in it for us, how are you going to play that story in milestones and roadmaps?

Moreover, they're able to bring different stakeholders and incentivize them not just monetary but incentivize them with all the other support that they need to help them grow or help them move towards what they want to achieve. If you take our case, we approached the government and we committed some timelines. They quickly created a two-way commitment and accountability. You just move away from dreaming to a little bit of pragmatism and meritocracy. That's where I see a lot of difference between Singapore versus others.


Singapore's pragmatism is based on internationalization, digitalization and innovation which are some of the key strategies within the CFE and the ITMs. What are the possible impacts of digitalization and industry 4.0 technologies in the shipping sector?

In shipping, people sometimes forget to ask the customers what they really want. People who win will be those who sit with the customers, understand what their problems are and suggest solutions that are then useful to them consumers. To your point, they see a lot of people who are attempting to solve macro-level problems. That journey has to be in small steps, but every step has to have some value creation for people who are the users of that space. Those are the people who will eventually see results. They may take time. It may not happen like this in six months but in two years, you will find that they're slowly building things that are transforming but very seamlessly. It’s about sitting down and understanding this space first. It’s about understanding what’s going to excite the customer and then trying to give that to them.


Alpha Ori Technologies produces solutions in IoT, in the smart ship concept all the way to big data analytics and overall management. Can you tell us about the impact you have had in the value creation for your clients through your different suites of digital solutions?

One of the impacts is about safety. It's about how we enable customers to operate ships safely. The other impact is on cost, whether it's in fuel or in manpower. The third area where we're focusing is on utilization to ensure that assets are utilized in their most appropriate manner. The last but not the least is also how do we create a framework whereby we are able to integrate stakeholders. We collaborate when needed. For example, we may not the best cybersecurity experts in the world, but we have partners like ST Engineering who are. Ultimately, we have to create a platform or the infrastructure for everybody else to be able to collaborate. That is where we are. We have tried to build that platform and invite more collaboration.


You also collaborate with MPA on the center of innovation, first smart ship center. What does the future look like for you within that maritime ecosystem and future digital innovation?

One is to go ahead and drive all this digital innovation. But then you will always need that human element to manage these digital innovations that are happening. If that's not there then there's always a mismatch. The center of innovation, our idea of holding is one end. We will create the smaller innovations along the way. But we'll also build a workforce that can manage these innovations. We will work with institutes like NTU, NUS and bring in talent and prepare curriculum, prepare content and prepare staff that will then seamlessly integrate with these innovations.

The idea of the center of innovation was to be able to attract different stakeholders into coming together and trying to sort some problems, and building the talent and the workforce that will then be needed to manage these innovations and this platform. At the end of the day, selling is the last thing. If you have a good product and it's helping people, it will sell.

MPA has been very helpful for us in the sense that when we brought out this idea of the center of innovation, we said that Singapore is losing service business, vehicles. Service business typically works either on the arbitrage human capital or you have some great technology to enhance productivity. The human capital arbitrage is going away from Singapore as it's getting expensive.

How do they compete to be relevant in the service business industry? A lot of the maritime businesses in Singapore have been focused around the service platform. If you don't support the productivity, efficiency and technology to bridge that gap that is on the human capital cost, you will lose all the service businesses. Coming back to the point of execution, MPA asked if we are willing to execute and how we are going to do that. The center of innovation was one of those baby steps we took towards executing the digital tomorrow. That's where Singapore is beautiful.


Can you tell us more about the success you've had through your technology and the reaction of different stakeholders as a result?

One of the successes was when we said we will focus on purely on the PNL of an asset owner. We focused on line items certainly. Our incentives model is in a way where you don't pay us anything if you think you don't benefit. But if you benefit then let's share some of it. This is a very different approach to many people. We got some success on that model. We also looked at our customers’ businesses and identified some of the issues we could solve. We engaged in a dialogue and a survey to understand our customers to include only what is useful for them. We involve them in the entire product development. This way, once it is developed the customer ends up satisfied. Suddenly, the problem has moved away from having customers to how do we scale this business. We didn't foresee that we will have success like this.

Then, we started speaking about compliance. Nobody wants to bend rules and deviate from procedures. Either your procedure or processes are not helping them or are too cumbersome. If you can address these two points, people will follow. Compliance follows in that bucket. On the safety, for example, everybody wants to be safe on the ship. Every operation is tricky. If you can build something that helps and enhances safety, or if there is a value for money proposition which is still safe: that's where people then start talking.

Same thing as operational efficiency, people focus on one particular type of machinery. They don't realize nothing can work in isolation. If you want to optimize a whole ship, you have to look at the ship as a whole. There are so many different makers in the maritime industry and there are a lot of cultures mixed here. We need somebody who can aggregate this and draw inferences. That's where we are trying to use our expertise and start getting people to talk to each other and then hopefully, build some insights. Lastly, we bring in machine learning and artificial intelligence. That's useful for me, for the crew members. The data analytics is a great space to be. It's hard to find good talent but it's been harder to combine that talent with contextual experience.


Some of the successes that you have had are from your collaboration with MPA and ST Engineering, which by itself is a certain seal of approval from those big companies. What role does the US play within your ecosystem today?

If you look at the talent that is available in Silicon Valley, versus the talent that's available in Singapore, versus the talent that's available in India, they're very different. The ecosystem if you look at artificial intelligence, machine learning and data science, Facebook, Google sitting in Silicon Valley, there's so much talent there. We need the pick the best of all worlds and then create again, a platform for them to be able to connect and talk to each other and create an ecosystem. That's what we're trying to build the same collaborative platform. Whether it's the talent or whether it's a product or whether it's different stakeholders.

An ST Engineering or an MPA will not come to me if they don't see that I'm able to add some value to what they're trying to achieve. The moment you add value in somebody's journey then the size difference becomes irrelevant. Whether you're big or small, it doesn't matter. If I'm able to add value to somebody, they will respect me for what I add. But if you're small and you can prove that there is some value creation and addition that you can do to them then the size doesn't matter.

We must spend some time to understand where digital transformation is heading. A lot of times you find that it's 80% contextual and 20% data science. For example, sometimes it's 80% data science and 20% contextual. It can also be. It's just about mixing and matching.