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Many IT organisations today take their cues from business startups to implement agile project methods, lean development and flat-hierarchy teams. This is why Finnish telecoms group DNA turned to startup consultant Janne Aalto to lead it through a major digital transformation.
“My appointment as CIO was preceded by DNA’s board of directors realising the scale of the [digital] changes happening around the world and in consumer behaviour,” Aalto says. “IT used to be part of DNA’s technical organisation, but the board felt it was too far from the business and wanted to change this.”
Aalto, who was head of platform development at Finnish digital advertising startup Kiosked, couldn’t resist the challenge. Eighteen months later he has taken DNA’s IT through a complete organisational restructure, separating it from the technical organisation and making it an integral part of the business. He is now the first CIO on the company’s executive team.
“From the start the goal was to bring both IT and business people around the same table to share their challenges,” Aalto says. “The thinking in some big corporations that the business is IT’s customer has become completely outdated with digitalisation. That model won’t take you far.”
As part of a new business-oriented IT, DNA has adopted agile projects methods and turned all its technology projects into business projects. While this meant a major perspective change for the IT team, it has been a success.
“It’s not only the business people who have been really enthusiastic about this,” he says. “The more technical IT people also see the new way of doing things as meaningful. They have become very close to the business and feel everybody is in the same boat, solving issues that are very important to our customers.”
Major architectural change
Aalto ran his own consultancy company and spent over a decade advising both startups and corporations on their digital business before taking the CIO position at DNA. For him lean and agile processes are the only way for IT to operate today, but for this approach to work people are only one part of the equation.
“You can only be agile if your IT systems enable it. For the most part, [DNA’s] systems were not like that but were huge, inflexible entities which were increasingly out of date,” he says.
“The thinking that the business is IT’s customer has become completely outdated. That model won’t take you far”
Janne Aalto, DNA
One of his first tasks at DNA was to change the IT architecture so it could support the rapid development of digital services better. A year was spent defining the necessary architectural environment and choosing the right technologies.
“We wanted a very modular architecture that has the customer at its core,” Aalto says. “It’s a multi-tiered architecture where the top tier is customer experience management. This ensures that all our systems will adapt to the needs of our customers and our digital services can support customers in real time.”
As part of the process DNA has discarded large technology stacks and package solutions. After working with many startups, Aalto favours technologies that have been created during or as a result of the recent rise of digitalisation regardless of whether they are cloud based or in-house solutions.
“We start every project with clear business goals where the necessary architectural changes would be made. Now we have something like 33 ongoing projects, some of them very large.”
The transformation will take two to three years and will mean replacing 80% of DNA’s IT systems
Embracing small partners
DNA’s architectural changes have also led to a revision of its partner strategy. Aalto says the emphasis should not lie on the size of a technology provider, but on choosing the best knowledge and skills for the selected technology.
“Size doesn’t solve anything. You can be a very small company but the best in your own sector, and that suits us. We need to have the internal means to manage any possible risks,” he says.
DNA itself has only a handful of internal developers among its IT organisation’s 150 staff, but enjoys a strong external provider network. Part of its strategy is to favour local partners with nearshore resources rather than offshore capabilities.
“Change is always difficult, but it won’t be made easier if you aren’t a significant customer for your partner or if they are located far away from you,” Aalto says.
He adds that while DNA’s IT transformation and new processes are well received internally, the most challenging part is transferring its customers from the old and in some cases business-critical systems to the new ones. The answer has been to introduce the new services simultaneously with the technological changes.
“Major mistakes happen most easily during conversions,” Aalto explains. “The key is to plan these things very well and implement them incrementally – preferably so you create a new services package for the customer, and when they move onto that, they also move onto the new system.”
Focus on the customer
While Aalto has been the architect of DNA’s recent IT transformation, he says the drive came from CEO Jukka Leinonen and DNA’s board of directors, who see the company today as a service operator rather than a telecoms operator. For them IT has a crucial role in creating a digital service offering for its 3.5 million mobile, broadband and pay-TV customers.
“We started to think about [the transformation] strongly from the perspective of digital services,” says Aalto. “In practice we are rebuilding our digital services both for our consumer and business customers. We have started to do a lot of experimentation. Instead of long projects, we try out an idea. We build and publish a first version of it and use analytics to see how our customers have used it, get feedback on their experiences and in rapid cycles improve [the product].”
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Currently DNA is working to introduce a data-friendly sales system in its 80 stores across Finland and to build systems that enable the company to understand customer needs better in real time and across different channels. Aalto says this requires a strong focus on analytics and data management.
“We will continue to move towards omni-channel, where our bricks and mortar stores and digital services become integrated. Customers can then decide themselves how they want to do business with us. We already have our first click-and-collect features, where you can reserve or buy a product online and then pick it up from our store – for instance, on your way to work. We will keep expanding these features.”
Gone are the days when companies could develop their services from the perspective of what they assumed would work the best. Now it is all about listening to the customer.
“A major challenge is that the behaviour of customers, especially consumers, has changed drastically. They demand very high quality services, preferably 24/7, and that everything can be done digitally. No matter what the industry, companies need to change [with them]. How well and how fast this is done will separate the wheat from the chaff.”