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There are not many industries digital technology has affected as deeply as retail, and traditional bricks and mortar players are quickly expanding into multichannel offerings. It is a serious but interesting challenge for Björn Ekstedt, CIO at Swedish logistics company PostNord.
Ekstedt started at PostNord in February 2016, and joined its executive team in March after a transition period. He says digitisation is driving digital communication and e-commerce forward at high speed, which makes his job stimulating.
“You can’t stay still, just develop a new functionality and say ‘here you go’,” says Ekstedt. “You have to figure out how you can really help the business of your customers.”
It has been a steep learning curve for Ekstedt, as he got to know the 38,000-employee company, which operates communication, e-commerce, distribution and logistics services across the Nordic region and Germany, as well as postal services in Sweden and Denmark.
With traditional mail services on the decline, the company is investing heavily in adapting its operations and infrastructure to the growing demand for digital alternatives. For Ekstedt, this means navigating the company through three major transformations, all of which have a major impact on IT.
“The first transformation is to compensate for the rapidly declining physical mail volumes by expanding our logistics business,” he says.
“The second one is to become truly Nordic, which means having the same products and services across all the Nordic countries, not only to gain synergies, but because many of our larger customers are asking for one Nordic partner with a single Nordic offering.”
As for the third transformation, an increasing focus on the digitisation of communications and logistics data, from warehouse to payments, is turning PostNord into a highly digital company.
When Ekstedt joined PostNord, his predecessor had already taken the company through its first wave of outsourcing to upgrade its digital capabilities. This included moving infrastructure management and application development to external partners.
The company is now approaching its second wave of outsourcing, as the previous agreements are coming to an end. Ekstedt says this time the focus will be on giving the suppliers more responsibility in delivering services, rather than simply performing technical tasks. This will include establishing partnerships.
The focus on service delivery is part of PostNord’s efforts to put IT at the core of its business. This is key to company’s efforts to create unified Nordic operations with shared platforms. While the business side is harmonising its product portfolio across the region, IT has to find ways to support it.
“This is driving the need for master data management and systems consolidation across the Nordics,” says Ekstedt. “Since it affects more or less the whole business IT landscape, it will take some time.”
The company is now in the middle of this transformation.
While Ekstedt has hit the ground running at PostNord, he describes his start in IT as pure coincidence. After 10 years of management positions in the Swedish Armed Forces, Ekstedt was looking for something completely different when, in 2007, he was offered an IT leadership position at Swedish energy company Vattenfall. Instead of technical skills, Vattenfall was looking for someone with proven expertise in change management and leadership, which Ekstedt had.
Since then, he has held various IT leader and CIO positions, but once again it was the need for change that attracted him to PostNord.
“It is a really interesting position as it is not only about IT but the transformation of the whole company,” says Ekstedt. He is also a member of the group executive team, which isn’t that common in Nordic companies. “This is a signal IT is strategically important for the company,” he adds.
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Ekstedt sees his key role as helping PostNord’s 400 IT staff understand and embrace the ongoing changes. Despite his military background, he believes the best way to do this is to engage everybody in the process instead of giving them orders.
“I am interested in the people of the organisation and how I can help them to develop and grow as professionals,” says Ekstedt. “One way of doing that is delegation. I expect all my team members to make decisions and take responsibility, stepping forward to be accountable for our performance in IT, and also as a company towards its customers.”
This includes revamping PostNord’s IT organisation with the introduction of small rapid development teams as a permanent part of it.
“Rapid development is a way to speed up IT deliveries to business, to become more agile and make use of lean principles,” says Ekstedt. “The one absolute success factor in this development approach has been the setup of small rapid development teams for different functions where IT and business developers work side by side.”
Information, information, information
Rapid development teams also have a crucial role to play in ensuring PostNord keeps up with the changing needs of e-commerce and digital communication, and the company’s focus has already shifted. It is now developing new data-based digital services that complement and support the physical logistics process.
“For example, e-commerce and IT go hand in hand. The information flow and logistics flow run completely parallel,” says Ekstedt. “Previously, logistics was primarily between the transportation company and the sender. Now the consumers have the most say in these kinds of transactions.”
“The role of a CIO is not to run traditional IT any more. You need to instead become a true part of the business”
Consumers today expect to be served on multiple digital channels with greater flexibility in terms of how, when and where their packages are delivered.
This is why PostNord has been quick to trial new services. In 2015, it teamed up with Swedish carmaker Volvo to provide an in-car delivery service where consumers’ online purchases were delivered to their car boot by PostNord.
It’s experiments like this that Ekstedt wants to embrace, along with the rapid delivery of new services that add value to the business. He believes the role of data and information will only grow in the company, which means IT and business are becoming inseparable.
“More and more of the value for our customers and their customers is created by the information services following the physical logistics products,” he says. “The role of a CIO is not to run traditional IT any more. You need to instead become a true part of the business.”