Few industries have changed as fundamentally in such a short time as the retail industry, and the Swedish home improvement company Jula was one of all the companies that changed and survived. New opportunities brought about by digital systems, global competition and consumer demands raised the bar for what was expected and pushed from the outside. An insightful CIO pushed from the inside.
– If you have a complete organization and an established way of working, and which has always worked, both the organization and the culture become quite a big resistance when you have to turn things upside down. Everyone talks about how good digitization is, and it is, but change hurts. Digitization is perhaps the most challenging and painful thing that companies have undertaken in our lifetime, says Henrik Ljungdahl, business developer at iCore and former CIO at Jula.
Det är över tio år sedan som Henrik började på Jula. Dåvarande vd Johan Åberg rörde om i den affärsstrategiska grytan och förstod att något måste ändras i grunden för att möta den globala konkurrensen, hålla nere kostnaderna och samtidigt öka tillväxten. En av åtgärderna var att tillsätta en helt ny funktion. Jula fick då sin första CIO, Henrik Ljungdahl.
– I came to a company that functioned much like any other company at the time, with lots of different kinds of IT systems to help the departments. But no one focused on making the systems work together for the business, and the growth that would be delivered was completely dependent on being able to work according to a scalable business model.
The goal was to go from 30 to 200 department stores within five years. To do that, from an IT perspective, opening a new store needed to be as easy as flipping a switch, everything from inventory to cash registers would just work without fuss.
– We started by looking at business security and what impact factors existed from an IT perspective. Then we mapped the business processes, existing systems and mapped out what needed to be done differently.
Work then began to integrate the various IT systems around a platform and the business system could take part in the results directly instead of via detours. In this way, Jula increased the speed in opening new department stores, and at the same time the establishment cost fell.
Changed the organization
One of several changes that Jula went through was to introduce digital labels in the department stores and simplify the inventory work. For every price change, 22,000 labels in 30 department stores would change, and digitizing the process was both a necessary and natural evolution.
– At that time, the marketing department still had the task of pricing and presentation, but instead we created a platform for interaction between the head office, the department stores and the customers right down to the product level. Now we could make price adjustments in one place, which then rippled through everywhere.
The marketing department still had the same mission, but of course their work needed to be reorganized from the ground up.
The goal was to go from 30 to 200 department stores within five years. To do that, from an IT perspective, opening a new store needed to be as simple as flipping a switch, everything from inventory to cash registers would just work.
– The calculation of the big picture was simple, even though the investment was large. You could even make the digital labels flash when something is not right with the balance, so both the buyers and the site managers had an easier life. But because it meant the organization also changed, there was some internal resistance until the labels were in place and everyone saw how well it turned out.
The website became increasingly important so that customers could search and find products before they even arrived at the department store. In the department stores, customer price terminals were then set up with the same function and content as the web, and which helped the customers on the spot. Soon there was no longer a need for a printed catalogue.
– The change was driven by external factors, the customers wanted accessibility and quick information, and we wanted to deliver it as cheaply as possible. The result was also another piece of the puzzle in building turnkey and integrated IT systems that made it possible to quickly open new department stores.
"IT must take care of itself"
When Henrik started at Jula, it was a general idea that IT should ensure that the computer and mobile phone work, but not much more. So when IT slowly but surely began to take a position as a driving force in business development, it created some friction, regardless of the company involved.
– People are probably always afraid of changes that they themselves cannot influence or control. You can look at any billion-dollar company 10 years ago, and most of them were put together with duct tape in terms of IT. It still occurs today, of course, but retail has come a long way, and my old employer Jula has come very far on the digitization journey.
I learned during the journey not to make a fuss about it but to talk so that people understand. But digitization always means organizational and cultural changes. These are two very important areas that need to be addressed from the beginning and not along the way.
The process of opening new department stores became more and more well-defined and Jula never missed anything essential in a new establishment. Today, the company has 130 department stores and has come a long way to the goal of 200 department stores. Henrik quit at Jula 2019 and moved to a role as a business developer at iCore.
- It is fun to see how Jula develops further and takes new important steps towards even more digitized business processes. Today, they think even more precisely about digitization.
Henrik, what would you have done differently if you could do it all again?
I would probably have spent more time on pedagogically reaching everyone. I learned during the journey not to make a fuss about it but to talk so that people understand. But digitization always means organizational and cultural changes. These are two very important areas that need to be addressed from the beginning and not along the way.
What advice can you give to others who are about to take a digitization journey?
- It is not possible to solve one IT problem at a time, then you end up completely wrong. You have to start with two insights, firstly what the business processes look like, and secondly what opportunities digital tools can create.
Differentiate between project and organizational change, behavioral change. All parts must be included and planned in a business project.
How can friction be avoided in the organization?
- The most important lesson I learned is not to use IT terms. Many people in IT think they talk like everyone else, but we don't. Then it is important to have the management behind you and to be fully aware of the added value that a change brings. Well, one more thing. Staying on budget is usually good.
