Tivi: Platform economy is changing the world, and the effects are also visible in Finland. United Finance shows how unexpected changes are caused by digital platforms.

Should I invest today? One company in the IT sector has moved to the sales service model. When a customer goes to the company’s site to check out computers and software, they can now get them at a fixed monthly price. The customer selects the products they need and purchases them as well as installation and commissioning services. After delivery, the IT Company will send the customer an invoice which in addition to the services also includes the first monthly installments of the devices.

However, the customer could be surprised if they knew what was happening in the background. As the customer was checking out the devices on the website, he actually searched for the IT-wholesale ALSO product range, which runs in the United Finance system. When a customer purchases the equipment as a service, they are actually paid for by United Finance. The invoice also came from its automated system, which also handles money settlements for the right people. The IT Company with which the customer operates is able to offer a service model having absolutely no capital and no invoicing system.

Both of these cases are examples of a new kind of economic model, the platform economy. What is that about?

The power of digital platforms is ferocious. Airbnb is the world’s largest hotel chain, although it does not own any hotels. Uber is the world’s largest taxi company, even though it does not own cars. Alibaba is the world’s largest retailer, although it does not have its own product range. Facebook is again the world’s most popular content company, even though it does not have much of its own content.

However, platform economy appears in a wide variety of forms, and the way platforms are born are different. For example, Amazon.com built automated server systems initially for their own online store. However, the platform became so powerful that the company started to sell it to others as well. Nowadays, a significant part of the world’s IT systems revolves around Amazon’s automatic platform.

Outwardly, United Finance may look like an ordinary financial company. The company’s commercial director, Marko Matikainen, is sitting in a conference room with a great view over Esplanade Park. The room is Björn Wahlroos’s former office, and there are many financial companies in the neighborhood. United Finance’s background is, however, quite different from that.

Matikainen explains that United Finance was separated from an IT company Vincit in the summer of 2016. At the heart of the new company is the IT system, the development of which began with Vincit seven years ago.

United Finance’s operating concept is simple. The company helps other companies to switch from one-off paid products to monthly-priced service models. This, of course, requires funding, but an even more important role belongs to the IT system that can make changes easily.

The United Finance system includes a kind of e-commerce module that can work within a client companies’ site. It makes it easy to sell products at a monthly fee. Although other services are also sold to the same customers, only one invoice will be issued to them. The United Finance system automatically manages invoicing, financial payments and various accounts for the right people.

“In the financial sector many would certainly like to offer such a service but building a technology platform is a big and demanding project,” says Matikainen.

United Finance, however, does not rely solely on the IT platform, but strong consulting expertise has been built alongside it. This is because customers usually need assistance at an early stage. Matikainen himself has 24 years of experience in developing the service business in various companies.

“Every now and again, we see that the business has gone a long way since it has succeeded in moving to the service business. According to one study, the service business grows up to eight times faster than traditional business. However, change has its own challenges and requires expertise,” says Matikainen.

United Finance also invests in consulting and training to help customers move from product sales to service sales. Very different types of service concepts can be implemented on one IT platform. United Finance’s customers include, for example, Martela that manufactures office furniture. In its concept, the customer does not buy furniture for the office but instead buys a monthly service, whereby the aim is always to optimize the furniture. If, for example, it is noticed that there are too few silent spaces for employees, some of the workstations can be switched to mini-conference rooms.

Matikainen says that it is mainly imagination that limits the possibilities of service models. In just over a year, the company has attracted more than 40 customer companies, operating in the field of telecommunications, security, health technology, software, sanitary ware, workwear and building technology.

* Article was published on 05.04.2018, in a Finnish information and communication technology newsmagazine Tivi (previously named Tietoviikko). Read more.

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