Lassila & Tikanoja builds digital competence with information management

It is an interesting time for information management at Lassila & Tikanoja. In addition to increased automation and improved internal efficiency, one key objective is to achieve competence in the field of digital business. CIO Harri Karjalainen explains the life cycle of modern information management development work, and what role master data plays within the big picture.

A stock listed company Lassila & Tikanoja employs 8,000 people across 4 countries. As a company, L&T represents a large and diverse information management ‘entity’, which has been systematically developed over a long period of time.

“In the traditional IT world everyone is in a hurry but without really having a destination. Modern information management is brought to the centre of the company and made integral to business development, which requires new competencies from IT people. In recent years L&T has built in a matrix model leadership culture, and now all departments are working towards the same goal.  The matrix leadership model has resulted master data being brought to the centre of information management development,” Karjalainen explains.

Digitalisation is spreading throughout all industries, and L&T wants to be in the forefront in developing services that deliver genuine added value for customers. According to Karjalainen, it is of critical importance that information management has reached a turning point.

“We have been good at improving internal processes for a long time. Now, for the first time, our objective is to increase our business through technology. This requires a new kind of competence from our information management, something that cannot be built overnight.”

From leading processes to leading information

In information management applications and data are diverging from one another. Previously data and systems have been seen as inseparable. Nowadays, new models create a location for data that is independent from all other systems.

“Companies used to be typically led by processes and exported all their data through SAP, for example. The application and information architecture was one and the same. When a system came to an end of its life cycle, problems arose since all data was stored within that system. In new models data has a long life cycle.  Data is designed to serve single service components, which are then used to create a process for each situation, and to enable the use of different applications in different channels. The model requires a centralised master data solution (MDM) that distributes data on to different systems.”

“We are shifting from being process led to being information led. I believe that the importance of information architecture is highlighted even further, and it can be used to create a greater competitive advantage than with an application or process architecture.”

The new model is agile and flexible. When critical data is located in the MDM, old systems can be easily removed and new ones implemented. The goal of L&T is to build a dynamic IT environment, which allows elements to be changed much more easily than before.

“Service Oriented Architecture is a term that has been used for 15 years, but not until recently has it been recognised as a practice. When you can separate information from applications, it becomes easier to build applications for a specific purpose. The life cycle of an application can be short in contrast to the information that drives the purpose of the application.”

Master data – the foundation of digital services

Investing in master data is a natural developmental step for L&T. The real need and demand has stemmed from projects. In the MDM pilot project, one step of an order-agreement process was automated. Now customer service agents are not anymore able to enter conflicting data into the ERP system, even if the ERP system were to allow it.

The vision is to expand master data and automation. It is desirable that all business-critical data elements are added to the MDM solution. In the short term, the goal is to increase process quality and transparency. The management team also appreciates improved data quality, which increases visibility, improves BI reporting and thus provides valuable data to support decision-making. When master data is in order, the company can move on to building digital services.

“When creating an online service for customers, you have to be completely sure of the accuracy of the data. Now when the order-agreement process is automated for our customer service, it could be transformed to a self-service online. This would free up human resources and, in the best-case scenario, the end-customer would find the online service better and more convenient than interacting with a customer service agent.”

Towards a managed information architecture, one step at a time

Karjalainen believes in small projects and moving forward one step at a time. Learning by trial and error is a good way to meet the challenges of multi-dimensional master data projects. Why go to the effort of fine-tuning master data for a specific online service if there is no demand for that service? Smart project decisions must be made and there should be trust that those decisions will ultimately ensure that business benefits are realised once the project has finished. The results are not always immediately quantifiable. For example, you cannot estimate the effect of automation in decreasing workload after the first day of operation.

The master data concept model is well managed at the organisational level, as are the related core concepts. In addition, the organisation and responsibilities for accuracy of, and changes to data have been carefully considered from the beginning. The tools exist and they must be adaptable according to the needs of the business.

“In the information architecture concept you must recognise what is master for which set of data, as well as understanding how data will move. Adding data to the MDM solution doesn’t automatically mean that it is taken into the MDM system. In some cases, the master can be a system other than the MDM, thus the MDM is the distributor of that data. This is exactly the type of adaptability and practical demands of real life business that are required from our solution.”

Facts:

Lassila & Tikanoja

– A Finnish service company that provides environmental services, industrial services and facility services
– Operates in Finland, Sweden, Latvia and Russia
– Turnover in 2014 approximately 640 million euros
– Employs 8,000 people
– Listed on Nasdaq, Helsinki