An interview with Antti Kleemola, CDO at the Finnish Rail Company, VR Group.
Digitalization has transformed the business world, depending on your point of view, for at least the last couple of decades. The change has been immense, not only in terms of processes and systems, but also in terms of the need for new competencies and working cultures.
Major changes require skilful management and many companies have reacted to digitalization by hiring a CDO to manage this change.
Is there still something left to be done in this digital transformation and is an appointed Digital Director required to successfully manage it?
We interviewed Antti Kleemola, CDO at VR Group, a government-owned railway company in Finland, operating in public transport services in both long-distance and commuter traffic, as well as in logistics and maintenance, about this topic.
From measuring kilometres to assessing customer satisfaction: digitalization means to VR above all a change in their thinking culture
VR is a textbook example of a giant organization where the need for a CDO was determined through experience. The changing business environment and with it the new measures of success drove the traditional logistics group, which has long had a monopoly over rail transport, to reflect on its capability in change management. Kleemola explained:
“Strangely enough, the focus of VR earlier was on the train instead of on the customer. For example, not that long ago our performance indicators focused mainly on kilometres driven.
“Due to both digitalization and the fact that competition for passenger rail transport will increase in the coming decade, our focus has shifted more than before from our fleet towards our passengers. Nowadays we focus on both the number of customers and customer satisfaction when measuring our success.
“Changes are happening on many fronts, which is why we need the entire organization to coordinate as to how to prioritize accordingly”.
The CDO is always busy – the need for change management due to digitalization shows no signs of slowing down
Kleemola's journey zigzagged, with the help of headhunters, through various leadership positions in the information administration to the digital executive of VR. Originally, he joined the organization to set the passenger transport sector in order, from the perspective of digitalizing the customer value chain. One of his first tasks was to make purchasing tickets easier, with the help of information technology.
“Quite soon it was noticed that it would make sense for the whole organization to think about how our business can better benefit from technology. It was desired that insights gained from the digitalization of passenger transport be applied to the entire organization. In this light, the need for a CDO was also identified,” Kleemola says.
“In a big organization like VR, reacting to changes isn’t always that simple. When both technology-driven reforms and demands for change from the authorities have an ongoing impact, it takes a strong digital leader to successfully hold everything together”..
The responsibility for digital change doesn’t lie solely on the CDO’s shoulders.
Whose responsibility it is to implement change in organizations, especially at giants like VR? Should it be only among CDOs, or possibly include someone else?
“To allow true change to happen, someone proactive and able to invest enough time and effort is needed. I doubt that a CDO alone has the power to do this. People in the organization are the key, and both employees and executives have a lot to take on when it comes to digitalization.
A viable partnership with business leaders is also of the utmost importance for a digital leader. This means digitalization throughout the entire organization’s agenda, not just in that of the CDO and his inner circle.
"The partnership and networking with both internal and external stakeholders need to be in good shape to succeed in times of digital transformation. Not even we at VR have all the answers; we need partners across industries,” Kleemola explains.
If the organization were an electric locomotive, information technology would be its fuel.
A successful digital leader turns his attention not only to making business more efficient through technology, but also to how such changes affect the overall customer experience.
“The goal of all our activities is ultimately to ensure that our customers are satisfied and have access to our services as easily as possible, be they train passengers or industrial customers who need an unbroken flow of goods. Therefore, we actively collect our customers’ insights and experiences and use them to draw useful conclusions about any developmental needs.
I believe that excellent customer experience still requires, in terms of digitalization, making organizations more collaborative and sharing common service platforms for the benefit of the consumer. There is still plenty of work to do in building these ecosystems for us digital leaders”, Kleemola states.
From IT's perspective, one of the biggest transformations has undoubtedly occurred in the area of cloud transformation. As data has moved from organizations' own servers to the cloud, its overall meaning has also fundamentally changed.
“With cloud transformation, information technology, as I see it, is becoming more of a “basic electricity”, so to say, that sustains operations. This “electricity” can then be recharged from the charging station if necessary, to allow the journey to continue.
As it stands, technology itself no longer requires that much management; the perspective has changed even more to people and change management. I believe that this will become even more pronounced in the job description of the CDO in the future,” Kleemola concluded.
Who knows, maybe the digital director of the future will be the title of CTO — Chief Transformation Officer.