The transport and logistics sector is one of the most rapidly transforming as organisations in this industry jump on the bandwagon to Digital Transformation success. Ingo Paas, CIO and CDO, Green Cargo, details how the rail company is making the most of technology such as cloud and why this is fundamental to ensuring a digital future.
Green Cargo is a public sector body in Sweden transporting 22 million tons of freight every year and serving close to 300 locations in Sweden, Norway and Denmark through its network, as well as linking to nearly 2,000 destinations in continental Europe.
The company has strategic objectives that by 2030, it will increase the internal digitisation of processes, automate its rail operations and lead the integration of eco-friendly systems. Paas’ team is addressing these goals by developing a low code app development strategy to give the organisation greater agility and introduce technology that can improve operations. Long-term, the IT team plans to change the endpoint for its services through greater integration with its customers’ business processes to increase transparency and demonstrate how its rail services are part of its customers’ core production processes.
Ingo Paas, CIO and CDO, Green Cargo, explains how he leads his team to success and how the Nordic region compares to the global picture when it comes to Digital Transformation.
What does your role as CIO and CDO entail?
My key responsibility is to enable and push the business strategy and take a leading role in Digital Transformation while delivering IT change that will benefit the organisation. That means I must make strategic decisions without consulting everyone and execute the plans. The role requires a lot of agility, shifting gears in response to market changes to identify opportunities for IT to support the business.
Is there a specific area of technology, or the business in general, that you’re passionate about and why?
My passion and what drives me is creating scalable, digital foundational platforms, which is central to the vision and ideas I discuss in my book, Digital Composable Enterprises.
Building Digital Composable Enterprises requires a digital resilience and the ability to adapt and augment radical, new technologies. On the one hand, it focuses on exploitation and routine to secure legacy interoperability and enterprise-wide integration. On the other hand, the focus is on exploration and innovation by embracing digital composability. Organisational ambidexterity implies that enterprises must simultaneously balance seemingly contradictory strategies: to exploit (routine) and explore (innovate).
However, it is not about the technology itself, for example, Generative AI, requires the ability to augment and scale these technologies and do so from the core of the business. It must be about taking the technology and finding a good use case, then creating resilient innovation around that technology. If you think about your core IT systems as valuable data sources and digital platforms, you need to find a way to embed technologies into this core environment so that it can use the data within the organisation. That can’t be done if it’s just sitting on the outside of the organisation. Transforming traditional ERP into digital ERP platforms is a key transformational innovation that IT provider, Rimini Street, has been supporting us with for many years.
Digital foundational platforms give you the interoperability you need to add, augment and scale new technologies without increasing costs and complexity in uncontrolled ways.
If you adopt this agile, incremental and experimental approach, where your IT environment and the organisation slowly acts like an organism, the cloud becomes the core where all of this activity must happen.
What do you notice about the Nordic region when it comes to Digital Transformation processes – how does it compare to the global picture?
Historically, Silicon Valley has been considered the hub for innovation, but this is changing. Though there is a shift in market dynamics, the Nordics remains one of the most innovative regions in the world. Sweden is one of the top five countries in the world if measured by a global index on innovation. Difficult to say why that’s the case, perhaps it stems from the great culture and people.
How do you think companies can achieve Digital Transformation without necessarily embarking on a forced march to the cloud?
The reality is that without the cloud it creates challenges for CIOs in this world of Digital Composable Enterprises. You cannot build the digital future of IT in traditional data centres, as it is difficult to scale and grow on a path of Digital Transformation and innovation from global hyperscalers.
There continues to be a perception around security and the risks associated with the cloud, but my CISO’s response is how can you make the right level of investment in our own data centre to rival the hyperscalers? As a CIO and CDO, I think it is possible to manage the risks (such as data security and privacy) and frankly, there is a greater risk if you don’t move to the cloud.
However, if you are going to move to the cloud, you should not think that it is managed by someone else. You must own it through a cloud centre of excellence at the core of your cloud operations. You must also have the skills and take responsibility for onboarding SaaS applications. You must master this approach, not simply buy it and expect the vendor to manage it for you.
From my perspective, the cloud is so fundamental to your digital future that you need to control it.
Can you discuss Green Cargo’s strategic objectives and what you hope to achieve by 2030?
The biggest challenge for our industry sector is growth and profitability. Our second biggest priority is helping to reduce carbon emissions, as rail transport is more effective than trucks. Every weekday, we operate some 400 freight trains, thereby replacing around 9,000 truckloads.
This is the future of Green Cargo, so IT must support these objectives, which means helping us to become a tech- and data-driven logistics company.
We have built several enterprise applications to digitalise operations, which we have done with our OutSystems low code development platform. This has given us a lot of new data points on the way business processes work, which has enabled us to challenge the company to adapt to this new way of working. We have built applications connecting to our mainframe, which enables operators through a dashboard to move wagons and change their position in a train before the wagon is moved. The operator then gets an automatic booking confirmation from the mainframe in nearly real-time.
We have built a customer portal, which is unique in our industry in Europe. Customers are now able to make their transactions much simpler than ever before by either logging on the portal or using one of the hundreds of APIs we have developed. We have also connected our customers in heavy industries into this network, so we can optimise how we support them integrated with their core business processes.
We have also built core data models, which take data and business logic from different integrations and systems.
We are currently working on a project with a US tech startup combining internal capabilities with AI to analyse capacity planning with complex but pre-developed AI models.
How are you actively addressing the digitisation requirements of your business and leading your team to success?
We work with Safe 5.0 and use Microsoft DevOps for planning and running sprints. We have organised ourselves around DevOps teams for the development of apps, working with an integration team and an analytics team. We are applying the same approach now on the IT operations side and in areas such as security, basically trying to be as agile as possible.
Our success comes from our ability to understand the business. Whenever we talk to business, we firstly try not to talk IT, rather, we focus on the business. It is important to be an active listener, showing we understand their problems and suggesting the types of technology we could use to solve them. This leads to better engagement.
Another key factor in our success is our ability to reuse, innovate and scale. This is where having these foundational data models is key.
What does your technology roadmap look like in the long-term and what areas of the business will be prioritised?
We prioritise these digital foundational platforms as they give us the muscles and power to solve complex problems consistently and move to controlled, scalable development. We are also looking to democratise our analytics capability, shifting the focus to Microsoft as it is central to our digital strategy. We continue to concentrate our strategy on building a modular digital ERP landscape to maximise our ability to be digital, resilient and adopt disruptive technologies or AI at scale.
What advice would you give to someone in your position on a journey such as yours?
- You must take strategic decisions on the platforms you adopt. You should never wait for the business to ask for such investments. CIOs must make those decisions, as the business often lacks tech-savviness.
- If you don’t build digitalisation at scale and from the core of your business, you create significant risks for your company.
- You must consider the cloud as the core of your digital foundational platforms, otherwise you will fall behind.
- CIOs must take an incremental approach, plan less and focus on collaborative and relentless execution.
- Establish autonomy in everything, create accountability with individuals, teams, the organisation and create trust with everyone.
What’s one lesson you’ve learned along the way and how does this influence your business approach?
I found the courage to make more decisions against a backdrop of market uncertainties without having a clearly defined plan. It enabled me to go into execution mode rather than planning around a set vision. Fundamentally, I didn’t follow the traditional cycle of planning, negotiating, asking, reconfirming, agreeing then implementing. Instead, we implemented something incrementally, then demonstrated it to the business, proving the business value rather than showing fancy presentations, which is a completely different approach compared to traditional strategies.
Focusing on delivering business value requires a strong committed team, relentless focus in execution, bravery in decision-making, incremental moves, aligning with business priorities and strategies to produce more scalable value and innovation for the organisation.
