Strategy and targets

Investors
Investors

Digital Workforce Strategy Update

Digital Workforce Services is updating its strategy. According to the vision and strategic goal the company will build a comprehensive business automation platform which is self-deployed. The platform will expand the company’s target customer base to better serve also companies employing 1,000 -10,000 people. With the new platform the company will be able to grow its market share in present markets and accelerate growth in new markets where the company will face little or no competition.

Several market related factors have led to this strategy update.

Firstly,

the market opportunity for automation of work is booming as digitalization is impacting all future work. The research firm Forrester states that robotics and automation will transform as much as 80% of all jobs by 2030.1 According to McKinsey Global Institute 50% of today’s work activities could be automated by 2025.2 The COVID-19 pandemic boosted business automation plans, and Forrester predicts a $22 billion market for software robotics and related services in 2025.3
50%
of today’s work activities could be automated by 2025. 2
80%
of all jobs will be tranformed by robotics and automation by 2030. 1
Secondly,

the benefits that companies are striving for through automation, are evolving and acceleration of digitalization, growth of revenue, improved customer experience and competitiveness are overtaking cost savings and labour productivity as the most important goals. Forrester states that the market is transforming from the automation of individual tasks into a market for the automation of broader, holistic business processes, the so-called automation fabric market. Forrester states that services delivering such comprehensive capabilities are not currently available on the market.4 The Digital Workforce Outsmart Platform is the first commercial platform to meet this need.

Finally,
we recognize a new growth opportunity in the US mid-market segment with companies employing 1,000 – 10,000 persons where the number of customers is ten times higher compared with the company’s present customer base and where customers are looking for easy-to-deploy, cloud-based services for intelligent automation.3 
CEO Mika Vainio-Mattila:

“For us our new strategy will mean transformation from expert-driven services to a platform-based business model. We will introduce the Digital Workforce Outsmart Platform to the heart of our service portfolio. Through the platform we will introduce significant additional capabilities for process automation. Ensuring seamless cooperation between software robots and humans is a key element. This will be supported by cooperation with the Swiss software company Flowable AG, whose technology will enable us to orchestrate all the platform technologies as a service. The multi-technology platform is being developed together with our customers in pilot engagements. The Outsmart Platform will deliver technology capabilities and services to ensure business continuity as secure cloud services charged based on consumption, pay-as-you-go. This will enable our customer promise: Outsmart your competition."

Targets

Growth

Digital Workforce’s goal is to achieve an annual turnover of EUR 100 million by the year 2026. Approximately EUR 30 million of the annual increase in the revenue is expected to come from the Nordics and EUR 50 million from the United States and the United Kingdom.

Profitability

Digital Workforce targets a clearly positive adjusted EBITDA margin5 by the end of 2026. In the longer term, the Company targets an adjusted EBITDA margin of over 20 percent, but in the period 2021–2026 the Company will prioritise investments for growth over profitability.

 

The investments in new sales and delivery resources to accelerate growth especially in the UK and US markets are expected to have a temporary negative effect on the Company’s profitability, as it will be necessary to increase costs in said markets before the revenue from those markets will grow. However, the Company estimates that it will achieve its profitability goals, because the Company expects the profitability of its business to improve significantly as the revenue and especially the share of revenue from Continuous Services increases.

1 The Future Of Work Starts Now, Forrester 08/2021
2 McKinsey: Effects of technology trends in 2050
3 The RPA Market Will Grow To $22 Billion By 2025, Forrester 02/2022
4 Automation Is The New Fabric For Digital Business, Forrester 06/2021
5 The adjusted EBITDA is calculated by adjusting the EBITDA with respect to material items that deviate from the ordinary course of business and affect comparability. Such items include, for example, acquisition and restructuring costs and other material exceptional costs.

Updated; April 6, 2022