Ecosystems, business models and servitisation

JARI RAAPPANA HOW TO MAKE IT YOUR COMPANY’S COMPETITIVE EDGE? Bank was established in 1988 by Ingvar Kamprad, the founder of IKEA. currently has operations in , Demark, , , , , and UK.

For consumers the offering includes a range of financial services and banking products such as loans, savings and cards. For businesses the offering includes a range of financial services for their customers, including loans, store cards and loyalty solutions.

The strength of Ikano bank comes from working together to create long-term solutions based on fair terms that bring value to its customers and partners alike.

178 Ikano Bank IT is being shaped by shifting market conditions, new regulations, and changes in con- sumer demands and behaviours.

For the past decade, fintech companies—technol- ogy firms that focus on financial products and services—have moved quickly, forcing the more traditional banks to rethink their core business models and embrace digital innovations.

While the more traditional banking industry will undoubtedly remain as its customer base is solid, change is imminent, affecting banks like Ikano Bank well into the future.

Instead of working as a separate business support function, Ikano Bank IT have had to reimagine how their IT operations deliver a more distinctive Mikael Nurmi, customer experience by mastering the use of state CTO, Ikano Bank of the art technologies in order to build competi- tive edge for the bank. The change journey for IT started in summer 2016 “The first step is to build more value and with a newly developed sourcing strategy imple- provide compelling customer experiences mentation, with targets on acquiring the best fit for at a lower cost. We needed to commit to a purpose ecosystem and digital capabilities, better next-generation operating model for our IT. service levels, enhanced business continuity and We needed to balance the two speeds at overall IT costs reduced by up to 30 percent. which our IT organisation operates— integrating more slowly changing legacy At the same time, Ikano Bank started to deploy, transactional back-ends with more dynamic together with Sofigate, a new business technolo- customer-facing front-end systems and gy -driven operating model by refining the core applications”, describes Mikael Nurmi, functions and the organisational structure of IT in CTO of Ikano bank. order to improve collaboration between business and IT, focusing on managing the supplier eco- “We needed to ensure that our IT is looped system and services, and sourcing and deploying in and accountable for the delivery of the best fit-for-purpose business technology rather sustainable, integrated solutions that meet than in-house implementation. the business’s needs regarding time to market and flexibility. Digital for us is a way of “Developing the required capabilities for the working, a mindset in which we operate. future in-house would have taken years. Our The digital and traditional worlds are not goal is to scale up quickly so we need to dichotomous, rather they are highly adopt a dynamic approach to accessing interconnected and inseparable worlds,” digital capabilities (ecosystem) from outside Mikael Nurmi continues. the organisation.”

179 179 “THE OUTSOURCING JOURNEY WON’T BE EASY; LOOKING OUTSIDE FOR DIGITAL CAPABILITIES WILL LIKELY INVOLVE A NUMBER OF STARTS AND STOPS.”

“We decided to outsource the backbone “We have a clear view that in the future IT Operations and to partner with Cap digital transformations will rely heavily on the Gemini to take advantage of scale of use of emerging technologies and specialised economics, reduce the time to transform tools, many of which are being developed by our business technology platforms and innovative niche players and start-up increase resources needed to build up companies rather than the established innovation. Digital capabilities are for us a IT service providers. Our new business prerequisite for competing in the longer technology -driven operating model will term”, Mikael Nurmi defines. clearly benefit from this evolution”, he concludes this very interesting discussion. “The outsourcing journey won’t be easy; looking outside for digital capabilities will likely involve a number of starts and stops. Over the long term, however, I strongly believe that if we partner with industry best players, incorporated with our business technology operating model, our IT will be better, faster, more agile and thus more JARI competitive.” RAAPPANA

180 TAKEAWAYS Transform and run your IT to take full advantage of supplier ecosystems for the best-fitting services and solutions. Re-imagine your IT to work closer with the business and provide much needed competitive edge.

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