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How Vestas Wind Systems used outsourced machine learning to transform contract management

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Vestas Wind Systems turned to IT outsourcing during a time of duress – it’s evolved into a strategic priority. Here’s how contract management and machine learning vendor SirionLabs fits in.

Our diginomica inboxes are awash with machine learning PR pitches. But when I got the chance to talk to Vestas Wind Systems A/S about their lessons with machine learning in action – via an outsourcing partner – that got flagged, in a good way.

Henrik Stefansen, Senior Director, Global IT Sourcing at Vestas Wind Systems A/S, gave me the inside view. Founded in 1945, this Danish manufacturer and servicer of wind turbines has become a global player in wind energy. Now with turbines in more than 70 countries, Vestas bills itself as “the only global energy company dedicated exclusively to wind energy.”
The ups, downs, and ups of the wind energy business

Five years ago, Vestas Wind Systems was dealing with the complications of declining government subsidies. The global economy was working its way out of a recession. Higher operational costs – combined with sluggish energy demand – compelled Vestas to push hard for new efficiencies. Stefansen has been an IT leader at Vestas for sixteen years. In the last four years, he’s led a drastic change:

We’ve gone from being a fully insourced company on the IT side about four years ago, to today being more or less fully outsourced. So that’s been quite a journey.

Managing outsourced processes has brought a learning curve:

I’ve come to realize that a lot of the other stuff that we need to be able to handle – and the processes you need to have in place to manage an outsourced setup – is quite different from when you run everything yourself.

That opens up a chance to improve processes:

That’s where really we got into looking at, “How can we optimize and automate some of these processes – instead of doing everything manually?”

Stefansen handles these operations with an internal team of twenty, and about a dozen externals. 27,000 employees count on his team’s IT services. If you can’t handle the breeze, don’t be in the renewable energy business:

We went through a bit of a dip through the financial crisis around 2011, where we cut the company in half. We had to reduce that much. But we recovered from that, and had a record year last year.”

How has the wind energy business from Stefansen’s early days at Vestas?

   “When I joined the company, we were still sort of an entrepreneurial startup. Over the last five, seven years it’s been much more industrialized. Now wind is a competitor, and it’s a subsidy to all of the known coal and gas sources as well.”

Today, I would say, wind is more or less on par with coal and gas, also from a cost perspective. And that’s of course what we’ve been working towards the last many years… If you want to sustain a business like this, it has to be comparable on a cost level to the other energy sources out there – that’s roughly where we are now.”