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Mattias Forsberg, Systembolaget, CIO of the Year 2013

Stockholm, 2014-02-05

•  Short introduction

• Omni-channel in Retail – How to reach the seamless customer experience?

•  Leadership – The most important skill for the future CIO?

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Agenda

Vice President IT, Systembolaget

•  Responsible for all IT operations and development within Systembolaget

•  Responsible for the Strategic Project Portfolio at Systembolaget (yearly 20-25 strategic projects).

Introduction

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MATTIAS FORSBERG Born 1972 Interests: Family, Sports (cross-country skiing, alpine skiing, triathlon, tennis, floor ball) Experience:

•  2011 – : Vice President IT, Systembolaget •  2008-2011: Vice President IT, B&B TOOLS •  - 2008: +10 years as Management/IT

Strategy Consultant

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The role of Systembolaget: There will be fewer alcohol-related problems if alcohol is sold without aiming to generate a profit

SYSTEMBOLAGET OPERATIONS •  >120 million annual customer visits

•  426 stores

•  >500 agents in small towns/ rural areas

•  5,032 employees

•  Turnover SEK 25.7 billion SEK

•  530 active suppliers

•  Over 13,650 items in range

The downsides of alcohol

1. Challenges for the mandate •  Alcohol advertising •  E-commerce

3.  The (absence of) debate about public

health and alcohol issues

5.  The development within retail •  Omni-channel (integrated channels) •  Increased customer expectations

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Strategic challenges ahead

Source: SIFO 2013

•  Short introduction

• Omni-channel in Retail – How to reach the seamless customer experience?

•  Leadership – The most important skill for the future CIO?

6

Agenda

The development of integrated digital channels challenges retailers

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Increased usage of digital channels

Increased expectations on digital channels

Customers expects integrated channels

•  89 % of the Swedish population has Internet access •  Systembolaget had 28 mil. digital customer visits 2012 - an

increase with 164% from 2011 •  >50% of visitors mobile by 2013 •  Increased usage of social channels for interaction

•  Information needs to be easily available, indifferent of platform or device

•  Expectations of personalization also on-line •  Access to the whole assortment on-line

•  Customers uses the mobile also at store visits •  90% of the customers searches for information on-line before

a purchase (indifferent of purchase on-line or in store) •  Ability to choose delivery point (store, home, agent)

Source: Systembolaget

Primary customer segments are mobile and digitally experienced

Average all customer segments

Kunniga Karlberg PRIMARY 41+ (female 58% male 42%)

Grabbige Gustav SECONDARY 31-40 years (male 79% female 21%)

Party Pia/Fest Filip SECONDARY 18-30 years (male 52% female 48%)

% of all customers 13% 11% 13%

Internet usage (daily) 96,2% 97,2% 96%

Sb.se from mobile 16% 44% 52% 41%

Downloaded mobile app 17% 28% 32% 19%

Ordered at sb.se 27% 50% 32% 21%

Facebook (daily) 50% 47% 51% 61%

Twitter etc. (daily) 14% 12% 17% 20%

Source: Systembolaget customer segmentation 2012/2013

Prioritized customer segments for communication and dialogue

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13% 11% 13% % of customers %

The e-commerce with alcohol until 2017 will have a modest growth rate but the potential long-term is high

9 Source: HUI “Försäljning av alkohol på nätet” 2013. Systembolaget calculations. Includes current ordering to be picked-up at shop or at agent.

E-commerce with alcohol (% of total sales)

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5

10

15

20

25

30

2013 2017 2022

High

Medium

Scenarios of growth rate

4-7%

10-28%

3%

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Digital channels currently scores below other channels and needs to be improved

Customer Satisfaction Index (NKI) per channel

Source: NKI survey, CFI group, 2013

Understand your customer needs. Build for the future

Understand each channels position

Don’t take short-cuts regarding architecture

Key steps towards a seamless customer experience

•  Customers “real” usage of channels •  Plan for mobile first

•  Digital channels primarily for information •  Limited growth of e-commerce , but long-term high potential •  Catch self-service opportunities

•  Build with integrated channels in focus (information, processes, application, infrastructure)

•  Defined and accepted architectural model •  Actively work with application lifecycle management/

technical debt

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Systembolaget guiding principles, examples

•  On-line, real time (almost) store stock levels in all channels •  Integrated information, processes , systems and organization

Significant improvements of the digital channels

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Improved on-line channel

•  Increased product and store information •  Improved ordering possibilities •  Personalization and product guidance (“Vad passar till”) •  Mobile/responsive design (in development)

Enhanced on-line offering/services

Integrated channels

•  The whole assortment available on-line, inclusive Local Products •  Search & find (Smart Phone App) •  New channels- Product guidance on Twitter (through sales personnel) •  Home delivery (pilot) •  On-line ordering for pick-up at agent (under evaluation)

Example digital development 2013-2015

•  Short introduction

• Omni-channel in Retail – How to reach the seamless customer experience?

•  Leadership – The most important skill for the future CIO?

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Agenda

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The Systembolaget IT Transformation 2011-2013

CIO of the Year 2013

IT Service Desk of the Year 2013

•  IT without clear leadership

•  Instable IT operations

•  Projects without clear ownership (over budget, poor quality)

The situation 2011 •  Clear leadership •  Common goals •  Individual targets and

performance metrics •  Continuous

improvements

Situation •  The world changes to a digital world with increased technological innovation, increased importance of IT

in business, consumerization of IT etc.

Challenge •  To continue to be relevant in the future, the CIO needs to evolve from a specialist that 'run' IT towards

someone that ensures that the business achieves strategic value from the use of technology.

Solution •  The key to address this challenge for the future CIO will be leadership. Strong leadership can be

supported by •  Understand and describe how IT will create strategic value •  Define and implement goals, structures and measurement systems •  Implement a culture of continuous improvement •  Engage with and implement through the whole IT echo-system (business-IT-suppliers)

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To only ’run’ IT is not enough anymore…

”Be the change you want to see in the world ” (Gandhi)

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…and the most important is YOU and how you act as a leader