It is not wise to make the IT department the supplier of IT services and the business the customer of those services, according to Mattias Forsberg, CIO at Swedish retailer Systembolaget.
In many companies, he says, the IT department is just a supplier to the rest of the company, which means they miss out on the benefits of co-operation.
“It is when you combine competence from people in different areas you see magic happen – you get innovation and development,” adds Forsberg.
He says the key to a successful business is that everyone in the company focuses on the real customer: “If you see the business side as the customer, you try to please them. But they might not know what the real customers want, or what new technological possibilities are out there.”
Forsberg and his colleagues in the management team have their different areas of responsibility, but they work as a team to figure out how to develop the company and the business.
“In many companies, the CIO is responsible for infrastructure and operating the IT systems, but they are not that involved in the development of the business. If you see yourself as a supplier, you do not have to take on responsibility for the business – you just deliver what others have ordered.”
At Systembolaget, IT and business are knit tightly together. “You need IT for everything you do in a company. The key to success is to create common goals – and to co-operate to reach them. You should not have separate goals for the IT department,” he says.
Business and IT have a united goal
It is important not to see IT as a separate entity in any way, according to Forsberg. “We do not have an IT board; we have a management team and a development team.”
"When you combine competence from people in different areas, you see magic happen – you get innovation and development"
Mattias Forsberg, Systembolaget
This philosophy is reflected in the fact that Forsberg not only manages the IT department, but also the project office. “The project office is responsible for all business development projects. Most of them have IT as a big component, but not all of them.”
Forsberg expect more companies to adopt this approach. “If you make a change in the organisation or the processes, you have to make changes in the IT systems – and vice versa. So it makes sense that the CIO is responsible for all the development projects in the company,” he says.
The 43-strong IT department is based in Systembolaget’s headquarters in Stockholm. “All of the operations and most of the development is outsourced to different Sweden-based companies, and we also use offshore resources through our outsourcing partners,” says Forsberg.
“We outsourced a lot back in 2002, and the IT department became really small. But since then we have built up a bigger team to govern IT internally, and also insourced some of the development.”
Integrated IT systems
If the business side wants to start using a new cloud-based service, it first has to get approval from Forsberg. “This is a good mechanism. In some other companies the marketing departments have created their own e-commerce solutions, for example, without involving the IT department. Our model might make us a bit slower than other organisations, but it is better in the long run to have all the IT solutions integrated.”
Separate IT systems can be very troublesome, especially when it comes to an omni-channel approach, according to Forsberg. “Therefore, we have consistently gone for integrated solutions, even though it is slower and more expensive.”
Omni-channel retail is the evolution of multi-channel retail, where all the different sales channels – such as bricks and mortar, online store, catalogue and mobile – are seamlessly merged together.
“We have gone further in this pursuit than most other retailers in Sweden,” says Forsberg. “For example, we can show how many of each and every product we have in our stores, on our website and mobile applications, within minutes.”
Systembolaget’s enterprise resource planning (ERP) system, IFS, is a central part of the omni-channel strategy, and the biggest project in the coming two years will be to upgrade and expand it.
“This project will have a big impact. It will change how employees in the stores interact with the ERP system, and we will make improvements to how we handle the flow of products and the logistics process,” he says.
Managing change involves pain
A lot of focus will be on change management, according to Forsberg. “We have a very substantial plan for how we are to inform and educate all affected people. But I guess afterwards we will still think that we should have put even more effort into change management, just as most companies do after big ERP projects.”
"Change should be a bit painful, otherwise the change is not big enough"
Mattias Forsberg, Systembolaget
But he does not expect projects to be free of some discomfort. “Change should be a bit painful, otherwise the change is not big enough. This is true not only for IT projects, but for all aspects of life. You cannot become better if you are not willing to take some pain in the process.”
Other important projects at Systembolaget in the next few years are to replace the cash register system and to roll out Wi-Fi in its 431 stores.
“Wi-Fi will make it possible for the employees to use mobile equipment to show the customers information and to handle orders. It will also allow us to come up with new applications for customers, like information on screens in the stores, or location-based services on their smartphones,” says Forsberg.
IT's role in the business
Systembolaget is a government-owned company whose goal is to reduce the harmful effects of alcohol. It is the only retail company in Sweden allowed to sell alcoholic beverages containing more than 3.5% alcohol by volume.
“We have a required rate of return to operate the business in an effective manner, but the state does not make a profit on us – it makes a profit from the alcohol tax. Our mission is to impress the customers while we are selling alcohol responsibly,” says Forsberg.
IT’s role in this is to develop customer contact and rationalise the employees’ work so they can put their efforts into impressing the customers, according to Forsberg.
“We should not tempt people to buy more alcohol, but we should give them as good a service as possible when they are buying alcohol. Today, 75% of Swedes want to retain the monopoly, compared with 48% in 2002, and that is very pleasing to us,” he says.
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