freshidea - Fotolia
Interview: How Green Cargo’s IT switched tracks to logistics success
Green Cargo CIO Ingo Paas took a few turns to establish his company as a composable enterprise able to flex and react quickly
Ingo Paas is what you might call a different sort of CIO. Even by the standards of someone in the top IT role, he has strong ideas about the position and is unafraid to share them. That trenchant stance must accelerate change management processes wherever he goes. Or at least lead to some interesting, oh-to-be-a-fly-on-the-wall conversations.
Let’s go back to September 2019. Paas had forged a successful career at heavyweight European brands such as Ericsson and Adidas, but made a switch in September 2019 by becoming CIO of Green Cargo, a Swedish, state-operated logistics company with its roots in rail.
It’s the largest train operator in its home country and electric trains make up 98% of its tonne-kilometrage. For non-train geeks, that means it is very, very low on fossil fuel consumption compared with logistics peers. And that is a selling point. Green Cargo provides what it calls “climate-smart transportation” to help customers run sustainable supply chain operations across its Scandinavian network by using freight trains rather than road trucks.
Green Cargo may not have the marque of an Adidas, but it isn’t small either. It has about 1,800 staff and in 2023 had sales of SEK4.2bn (€360m). But when Paas arrived on the scene things were… interesting.
Mission impossible
“It was a ‘mission impossible’ project to take on that company as a CIO,” Paas tells Computer Weekly. “There were two mainframes, one SAP system and a lot of other ERP [enterprise resource planning] systems. The company was not succeeding in any way to proceed with those systems and I joined without finding any structure or capabilities within IT information security or whatever. I asked for the CISO. There was none. I asked, ‘What do you have in place?’ They showed me a policy: Microsoft Passport with a very high rating.”
Paas unpeeled the layers of a company trying to “overcome very bad management decisions and strategies” that had resulted in an unwieldy IT operation full of legacy boat anchors and was therefore resistant to rapid business change.
Paas had been persuaded to join Green Cargo after “an exciting conversation with the CEO”. Green Cargo was “completely different … much smaller” than the jobs and departments he had previously worked in. After six or seven weeks of navigating this new world, what followed was the mother of all pivots. He asked senior executives to “forget their plans” and requested they trust him to “run this change completely differently” from what had originally been envisaged.
The original plan was to replace the mainframe and SAP systems, but after just a couple of months, Paas decided he had to change tracks. The new plan was to shave off outstanding risks and enhance IT responsiveness to business needs. Getting there meant looking at the mainframe and SAP as a core data source, minimising complexity and renovating business logic, rather than focusing on the systems themselves.
The target was to move from four big-leap core releases – “none of which worked well” – to 300 smaller ones per year. Paas also wanted to define digital foundation platforms “to make sure that whatever we invested in was a building ground to reuse, orchestrate and scale based on the principle of autonomy, so we were not dependent on others”.
The big switch
His early switch was to suggest to leaders that they “completely forget their plans and ask for their trust to run completely differently … and to accept an evolutionary plan, and use it to invest in business development”.
Picture the scene:
“I came to them with seven PowerPoint slides and they were used to seeing, like McKinsey, 200 slides. I said, ‘Don’t spend so much time reading my slides, look at me. I’m here to take responsibility. I don’t want to emphasise all the strengths, I want to manage the core risks we have identified’.
“They said, ‘Ingo, you must have a business case and master plan’, and I said, ‘I don’t have one’. And they said, ‘You can’t come to us like this, ignore whatever we agreed before and do this and not have a plan’. I said, ‘Look, I don’t know what I need to prioritise because I don’t know what decisions I have to make to solve all these problems because it’s too much. If I make a plan now, the only thing I’m gonna do is follow the plan strictly.’ I put myself at risk and they said, ‘Ingo, this is weird!’.”
A new composition
What ultimately emerged from that notable meeting was what Paas calls a “hybrid integration platform”. That is underpinned by Paas’s belief in digital composable enterprises. He likes them so much that he even wrote a book on the topic, depicting the model as the fast track to scale and interoperability, and, more importantly, business agility.
Composability advances the ability of CIOs to discover, he says. “You need to be explorative in the way you look at new technologies [to find] radical changes,” he enthuses, whether that’s cloud or graph databases or figuring out the power of rapid application development. Push hard though and the result is a business form of “ambidexterity”.
“It’s quite fundamental to not have plans and to find answers to questions when you didn’t have questions before. A lot of organisations are talking about generative AI as the greatest thing they can do, but they should be talking about the business problem they want to solve, and evolve from core to scale and reuse investments.”
Paas moved Green Cargo in this direction, embracing uncertainty and using suppliers to understand business realities and possibilities. Practically, that meant combining low-code development tools, Google Compute Platform and democratising access to data using Microsoft PowerBI querying and workplace automation using Microsoft Dynamics ERP.
The change necessitated a fine balance, he says, between “not being vendor-driven but utilising vendor capabilities for innovation” and emphasising a sense of autonomy for individuals, teams and the organisation. Services are owned by the business or IT and there are no blockers to enabling high-performing teams and individuals.
As much as being a technical challenge, this was also a cultural phenomenon. Key to all this, he says, was building trust because “without trust, you cannot get anywhere, you cannot change existing relationships and turn them into new ones”.
The power of narrative
Getting there involved understanding individuals, introducing compelling storytelling and enlisting clear examples.
“People said, ‘I can’t change things, I don’t have a mandate’, and I said, ‘From now, you have a mandate’. I couldn’t make these good plans: individuals came up with them and my job became one of stopping them from doing so many.”
Today, Green Cargo is reaping the benefits of that bold transition, and Paas remains devout in his devotion to a more progressive approach to IT than the vast majority of IT leaders follow.
“If we can’t manage from the core, how can we be digitally resilient? If you want to react fast, it has to be from the core,” he says.
Rather than focusing on window dressing and becoming “SAP slaves”, CIOs must act decisively in ways that change the vista of how businesses can behave. In other words, if you’re on a train to nowhere, get off and find a new way.
