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Nordic CIO interview: Martin Althén, Husqvarna

The CIO at power tool maker Husqvarna tells Computer Weekly how he is repositioning the company through digitalisation

Swedish outdoor power tools maker Husqvarna Group is attempting to stay relevant by bundling its hardware products with software, according to CIO Martin Althén.

Digitalisation is changing society and companies in a fundamental way. It is no longer enough to only make the best hardware,” he tells Computer Weekly.

Users want to be able to interact with hardware products through interfaces other than the product itself, he adds.

“Increasingly, users want to use the products as a part of a service,” says Althén, adding that this was initially a trend driven by consumers, but it is now spreading to professional users.

Husqvarna Group has worked on digitalisation in recent years and is well positioned for the change, according to Althén. “We began our first true digitisation project as early as seven years ago,” he says.

The result was Husqvarna Fleet Services, a cloud-based system connecting landscaping teams with their machine-fleets through an online management portal.

“We created a specialised digital services and solutions team 18 months ago, which only works on the IT in our products,” he says.

This team is now made up of 40 people, and has developed systems such as a watering system with sensors, and lawnmowers controlled through mobile and smart watch applications.

“However, at the end of 2015, we realised it is not enough to pursue digitalisation in the form of separate projects. We needed a deep analysis of what kind of company we want Husqvarna to be by 2020,” says Althén.

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It was decided that Althén should head the mission, and a colleague has temporarily taken over the other CIO tasks.

“I highly recommend other companies appoint dedicated senior leadership to steer the digitalisation journey. This is a prerequisite if the company is to make digitalisation a strategy rather than just creating a range of digital products,” he says.

Husqvarna’s digital strategy will be finished in September 2016. “Then we will work in the organisation to reposition the company. This will affect all our business areas and the countries we are present in,” says Althén.

Service packages for users from 2020

In 2020, Husqvarna will be able to provide its products in service packages, both to consumers and professional users.

“For example, we could supply a service that guarantees a well-groomed park. The person responsible for the park gets access to internet-connected products, which are themselves keeping track of when they need service and when they have been used,” says Althén.

Another example of a possible service is to support the care of forest plantations through technology. “We could put sensors in the trees to keep track of the growth, and sensors in the soil to make sure it has the right moisture, pH value, nutrients and so on. The information from the sensors could also be of interest for other companies and government bodies,” says Althén.

For consumers, he says services could connect intelligent garden management systems with the smart home and security services.

“There are a lot of possibilities outside of our product range. We do not co-operate with other companies yet, but have started discussions with potential partners,” he says.

“Our robotic lawnmowers are an example of a platform, which can be connected to other product and service ecosystems.”

Co-operation with other companies and the creation of ecosystems is a key factor for success in a digital world, according to Althén.

“However, this is not an easy task for industrial companies such as ours. The entire business logic has been based on reducing risk and maximising efficiency, and this has been accomplished through vertical integration. But in the digital world, you need horizontal integration,” he says.

Security priorities and ERP issues

Digital transformation will continue to take up a lot of Althén’s time when he takes back his traditional CIO responsibilities again in September 2016, but he has other pressing issues to handle as well.

“We have to invest more in our defence against cyber threats. This has a high priority, since the traditional criminality has moved into the digital arena,” he says.

Another challenge awaiting Althén is to reduce the number of enterprise resource planning (ERP) systems the company has. “This is connected to the digital agenda. If we are to provide digital services, it is important that we have an unbroken chain of data,” he says.

“This is so we can connect users, products and other parts of the service. This is complex if you have a handful of different ERP systems.”

The ERP systems are a legacy from when Husqvarna Group’s IT function was divided into different geographical regions. “We still have lots of other local systems too, but our infrastructure, client platform and outsourcing contracts are global. I initiated this transformation when I was hired as CIO in 2008.”

Change will be a ‘challenging journey’

The global organisation makes it easier to make sure that IT is fast, efficient and flexible, and that everything works equally well worldwide, according to Althén.

“We are not a huge company, with 13,000 employees and a revenue of SEK 36bn. If we are to obtain good prices and services from the best outsourcing providers, we have to consolidate our volumes.”

Husqvarna Group has outsourced networks, datacentres, storage, application management and help desk. “Our IT department consist of around 110 employees, who are mostly working with project management, architecture and managing suppliers,” says Althén.

“A fourth of the new digital services and solutions team belongs to the IT department, and the rest work exclusively in development projects.”

The number of software developers will increase during the coming years, as Husqvarna Group is transforming from a manufacturer to more of a service company with a lot of software, according to Althén.

“This is going to be a very challenging journey. Our product development organisation will be effected, as we are combining hardware and software development,” says Althén.

“It will be a big change for our sales force as well, as we move from selling hardware to resellers, to selling result-based service contracts to consumers,” he adds.

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