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In 2009, the production division of the former government agency Swedish Road Administration was transformed into independent public company Svevia. Three years later, Emil Dahlin was appointed as Svevia’s first CIO and he immediately began reshaping its IT.
Dahlin began by cutting the operational expenditure for IT by 25% between 2012 and 2015, while increasing the IT staff threefold.
The transformation involved renegotiating all IT contracts and ending the “bad” ones, as well as removing computer systems.
“Before I began working at Svevia, there was no cost control,” says Dahlin. “There was a central budget, but also 40–50% decentralised budget, so I centralised the control of the costs and the management of IT.”
It was not only Svevia’s IT that was transformed during this period – the whole company changed its culture, says Dahlin.
“We had to start thinking in terms of profitability. Since 2011, Svevia has cut its workforce from around 2,800 to 2,000, while still doing as much work. We are the largest road operation and maintenance company in Sweden,” he says.
Dahlin believes Svevia becoming a private company was a good move.
“When people’s work is not measured in any way and there is more money on 1 January every year, there is no will to work for profitability,” he says. “Under those circumstances, employees do not handle the organisation’s money as if it were their own.”
According to Dahlin, it was not a difficult task to transform Svevia’s IT. “I had the full support of our CEO and most of the management group saw the need for change,” he says.
Dahlin says a new chief financial officer (CFO) began work the same day and gave him good support, but it still took a while to cut IT costs.
“The business often has no clue about the future of technology. We have to be the experts”
Emil Dahlin, Svevia
“We managed it by saying, ‘You cannot take an IT cost if you do not work in IT,’ and then it became obvious where the leaks were,” he says.
“They were in more than 120 divisions around the country. They all thought they were unique – they did not operate the same way in Jönköping as in Piteå, so they wanted different IT systems.”
Dahlin has worked hard to make Svevia’s different divisions streamline their processes. “We have a mantra that goes, ‘same requirement, same solution’,” he says. “The different operational areas are not so different that they need different processes to do equivalent tasks.”
The CEO said he wanted an “IT dictatorship”, which was a big help, says Dahlin. “What he meant by that is everything should emanate from the business, but ultimately the CIO makes the final decisions about what solutions best match requirements, the money we have available and future needs.”
Dahlin wants his IT department to function as a broker, offering all types of services. “The important thing is that we ensure the solutions will still be working well in three years’ time and they will not cost too much time and money to replace in five years’ time. The business often has no clue about the future of technology. We have to be the experts.”
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Another time-consuming task was to hire the IT staff Dahlin needed. “Today we have 20 people in IT, plus up to ten consultants. When I started, we had seven people in IT.”
Svevia outsourced everything in IT in 2009, but this did not create a real client organisation and worked very ad hoc, says Dahlin. “Before I started in 2012, IT had no representation in the management group.”
Dahlin is very happy with the way the transformation of Svevia’s IT has worked out. He believes an instrumental part of the success was his ability to get the division managers on board. “I have worked hard on my rhetoric. It was very important to get them to see what was in it for them when I took away their IT personnel and their IT budget.”
To continually develop the communication and collaboration is an important task for Dahlin. “It is necessary if you are to lead a decentralised operation with centralised processes. We can only get to know what is happening in the regions where we do not have IT personnel through collaboration.”
Dahlin believes the importance of co-operating and collaborating with the business will continue to grow. “IT will get more and more integrated in the business. We have already killed off IT being seen as a support function. We used to be, but in 2015 we are an innovative and change-driving part of the business.”
Svevia’s main goal is long-term value growth, in line with or over the rest of the market, according to Dahlin. To accomplish this, the company has four overarching strategies: specialisation, commercial culture, operational effectiveness and embracement of the customer.
“IT maps all initiatives to these strategies and prioritises accordingly. If we take operational effectiveness as an example, we are making order management mobile, so you can place and receive orders in the field instead of at your desk.”
Other important projects are modernising the customer interaction through a new homepage and social media; procuring data communications and telephony; moving to online storage; revamping the purchase process; enabling mobile cooperation; and replacing the human resources (HR) systems and transforming HR processes.
“My biggest challenge is that the budget is not as elastic as the expectations. I work hard to try to map the conditions to the expectations – the rigid cost control we implemented three years ago really helped. It makes everybody think things through more thoroughly, instead of just going for the first solution that comes to mind,” says Dahlin.