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Like many organisations, Swedish hygiene and forest products company Svenska Cellulosa Aktiebolaget (SCA) is currently going through a digital transformation.
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And according to CIO Robert Sjöström, this is a matter of life and death. “If the company is to survive, we have to digitise – both internally and externally,” he says.
One aim of SCA’s internal digitisation is to be able to manage the purchasing process better. “Today you pick up the phone and order something, like office supplies,” says Sjöström. “But in the future, we want every purchase to go through a portal.
“This is important for several reasons. Firstly, everybody can pick up the phone, but in the portal everybody will not be able to order everything.”
The portal will also improve ordering from suppliers with whom SCA has contracts. “The portal will also mean electronic invoices, a reduced number of tasks, and increased transparency,” he says. “We are doing a pilot in Gothenburg now, but it will take a few years before this is implemented around the globe.”
An example of SCA’s external digitisation is putting microchips in diapers for the elderly. “The chip lets you know if a person has a urinary tract infection,” says Sjöström. “This is a pretty new product, which is currently rolled out at nursing homes.
“We also have digitised restrooms, where you can measure the number of flushes and visitors, whether the paper is running out, or whether you have to clean the toilet.”
Digital services are still a very small part of SCA’s business, but will increase steadily, says Sjöström. “We are curious and progressive, because we see that digital has a part to play in our business, even though we are so focused on tangible products,” he adds.
Another example of external digitisation is websites, which are mainly aimed at building relationships with customers of hygiene products. “We already have several different sites, and we have many projects in the pipeline,” says Sjöström.
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He says the company does not sell many products through these sites, but is considering growing this channel. “It is not an easy decision,” he says. “If we start selling more ourselves, we need a new logistics solution, and we will become competitors to our own customers, who are selling our products today.
“It is really important to be open and flexible when it comes to which business models we will see in the future.”
This is something Sjöström thinks about a lot, because he is not just CIO, he is also responsible for strategy and business development, and global business services. “The fact that I have three different roles is more the result of my experience than a strategic decision at SCA,” he says. “I do not know if I would recommend this setup to other companies, because all businesses are different. But for us, it has turned out to be really effective to link these areas.”
The reason for this is that much of the company’s global business services and business development depend on IT, says Sjöström. “Also, when it comes to strategy – of which mergers and acquisitions are an important part – it has turned out to be a lot of synergies with the CIO role.”
“It is really important to be open and flexible when it comes to which business models we will see in the future”
Robert Sjöström, SCA
Sjöström has a broad background, including senior positions at Capgemini Consulting and TeliaSonera, and an education focused on business and economics. “I have been at SCA since 2009, starting out as president for the global hygiene category,” he says.
The hygiene business brings in 85% of SCA’s revenue, and the forest business accounts for 15%. “We have a presence in about 100 countries, and our products include toilet and household paper, diapers, feminine care products such as sanitary napkins, incontinence care products, and industrial papers.”
SCA’s brands include Tena, Tork, Libero and Libresse. The group has a turnover of about SEK 115bn (£9.5bn), and around 44,000 employees. “In IT we have around 500 employees, and then we have various external IT resources,” says Sjöström. “About 25% of our IT is outsourced – but we are not big supporters of outsourcing.
“Our strategy is to only outsource things we are good at, so we know what demands to put on the suppliers. We also have partnerships with bigger suppliers, to ensure development.”
Sjöström does not know what the company’s outsourcing percentage will look like in the future, and adds: “With cloud solutions and suppliers’ new business models, the definition of outsourcing is changing.”
Sjöström sees a move towards cloud-based solutions as natural development, but he does not want SCA to be among the more progressive businesses. “Many of our suppliers’ business models for the cloud have to get better, the security issues have to be sorted out, and the solutions have to be economically justifiable,” he says.
Robert Sjöström, SCA
SCA’s IT function is divided into two parts, which Sjöström initiated. “I have been responsible for IT for five years now, and in the beginning I did not make any big changes,” he says. “But I saw that we had a challenge when it came to handling daily operational tasks at the same time as we were driving strategic development.
“So we divided IT into one strategic part, consisting of only five people, and the big operational organisation.”
The two parts each have a leader, who report directly to Sjöström. “We are like a triangle, working together,” he says. “This has turned out to be a really successful move. We are much more effective now that the head of operations is not drowning in strategic tasks.”
SCA’s main IT hubs are Gothenburg, Munich and Philadelphia, but many IT staff are located in other cities around the world. “We are very global and mobile, and it does not really matter where people work,” says Sjöström. “We have cut down on travelling in recent years, and invested in video conference equipment. We also use Lync and other communications tools. If you know the people you co-operate with, it works really great.”