Building the future

CXO asked Skanska’s newly appointed CIO, Magnus Norrström, about how he is preparing for his new role supporting the construction industry.

CXO. So Magnus, you recently joined Skanska, and have been spending your time travelling around to better understand Skanska’s operations. How is that going?

Magnus Norrström. Yes, that has been going well. I’ve met all the members of the senior executive team, including our CEO, Johan Karlström, and I’ve met about half of the other staff units that are located here in Stockholm. I still have a couple of meetings to go, staff units are areas like reporting, communications, purchasing, etc.

I’ve been to Helsinki, met our person that is responsible in the UK. I also have meetings planned for Poland and Norway, and am planning trips to the Czech Republic and Latin America. I also have meetings in the US planned already. But I’m quite used to the travelling.

CXO. What have you learned about the role so far?

I have three different responsibilities here with Skanska. I’m head of Group Staff Unit IT and in that capacity, I report to one of the senior executive team members, Tor Krusell, and I am also responsible for the group. So in addition to my IT responsibilities, I do have a personnel responsibility.

The second role I hold is as chairman of the board for Skanska IT Solutions. That covers the IT development, maintenance and operation company for Skanska, mainly Skanska Sweden. That’s a group of about 90 people with their CEO who then reports to me in this capacity.

The third area I cover is co-ordination of the IT activities in the 13 business units. Skanska is a decentralised organisation, which means the business units do not use one overall IT structure. That is basis of my role overall.

CXO. What is on top of your agenda this first year in the company?

MN. When I began at Skanska I agreed that I would split 2008 into three different steps. The first one is to get into the organisation and the business as such. The second one is then to formalise my journey going forward, and the third step is to get buy-in and confirmation of that plan.

CXO. Do you feel like your previous roles have prepared you well for your current task at Skanska?

MN. Before my previous role at Nordea, I spent 20 years with Accenture as a management consultant in IT. After leaving Accenture in 2005 and joining Nordea as the CIO, at Nordea I learned about the dynamics that are ongoing in a larger corporation. In addition to the direct IT question, certainly this experience of a larger organisation was very valuable.

My personal philosophy is that IT is important for business, but it’s not there for its own sake; it’s there to support the business. But in Internet banking, it was IT that partly drove that development as well as being there to support the business.

IT in financial services has a more prominent role and also a larger part of the budget compared to the construction industry. The usage of IT is also different here at Skanska. Not every single individual has their own email account, for example. There is some difference, but a lot of the things that I learned at Nordea are applicable here at Skanska too.

CXO. When working as a CIO you learn the basics and then can adapt what you have learned and apply it to any industry that you work in?

Yes, that is true, but I actually think that my experience as a consultant for 20 years gave excellent experience that I could fall back on. When you look at the role for a CIO – regardless of what business you work for – you are a leader for the group that you are responsible for. You have to have the general management skills. You have to have an understanding of the business and you must have an understanding of IT. Throughout my 20 years with Accenture, I understood from a practical point of view how IT works.

Then, of course, there are things that I learned at Nordea that you can’t learn as a consultant, having direct line responsibility. A combination of my experiences with a consultant background and line responsibilities were what helped me.

CXO. The Group Staff Unit IT is responsible for the group’s global standards for data network, security and common platforms. This must be quite a challenge given the group’s global reach.

MN. I do see it as a challenge, but that isn’t necessarily a negative thing. We have a common standard, which we use here at Skanska, so there are directions in those areas which gives the order of standards for the common network, common security and the common platforms.

Another factor that is important is that you present your suggestions in a way that the users – the other business units’ IT departments – see the value of it, so it’s a two-way communication. We can give directions and overall goals, but we can’t direct them to do certain things when it comes to their own IT department. Moving forward the integration or the level of integration is one of the areas I will be focusing on, as there are benefits and synergies to have more of the basic IT structures in common.

CXO. What other issues will you be addressing?

MN. On the corporate level we have a Green Building initiative. We also have another staff unit called Sustainability. What we have started in IT is a group that consists of members from the major IT departments around the globe. We don’t call it green IT, we call it sustainable IT. Under that umbrella is where green IT falls, along with a number of other topics.

CXO. Do you think it will be a challenge to co-ordinate the purchase of IT-related services, seeing as you have to cover such a large group?

MN. The business model that we are using is a decentralised integrated model. That’s the overall Skanska business model. Under that umbrella, it depends how you see the balance between the decentralised and the integrated part. It also depends a little bit on what type of vendors, for example, hardware or software vendors or consultants that we’re using, how we are dealing with them. But we do have a number of common agreements with global players like Microsoft, for example.

It’s still up to each individual IT manager in the different business units to decide what they want to do, as we do not decide on the corporate level what type of software they should use.

It’s part of the integration strategy to see if we can do more in common. If we can do that – and I’m pretty confident that we can – it will be easier because we can all use the same type of application, the same type of integrated architecture.

Underneath that we will be using the same type of vendors as well or a selection of vendors. The most important areas is for terminals. We look at it for PCs. We look at it for servers and then we see how much of that will be in common and then we will also have common purchase agreements.

CXO. Where do think your IT focus is going to lie? Are there any particular business goals you’re trying to address?

We will be looking into the whole business process, from the architecture to the development of what kind of new build we’re doing, and then the purchase and the logistics and the project management skills that are needed in all these areas. My job is to see how we can support that from an IT perspective and that, you could say, is nothing new compared to before. It’s just doing that better.

IT will be instrumental to enhance productivity in our core businesses. For example, IT is a crucial tool in our current standardising of our residential construction and we are also looking into BIM, which is building information modelling, for all type of projects.

That’s a way of gathering data from the very start of designing and planning what you want to build all the way through the handover of the completed building. We want to develop this further to better serve our goals our methods, processes and ways of working. I believe, we can be more efficient by utilising IT more integrated in the construction process.

The development has started, but I think the industry in general can do more to standardise and industrialise the process and then BIM would be a support tool for that.

CXO. What do you hope to achieve at Skanska?

I want to make sure I understand the business model of pure construction compared to the development area, where we have the residential, commercial and infrastructure development. In these areas the process looks a little bit different, as we are developing it from our own land bank all the way until we sell the objects. I have to understand that so it can be supported more successfully from an IT perspective. In addition to that, we have to see if there are areas that can be integrated.

And at the moment, there are two initiatives, which started before I joined but which I am part of right now, regarding Nordic IT to see if there are any synergies in the Nordic area and the same thing in the US area. Those are two additional things that I will be focused on for the next future in the process of integrating the IT areas more to support our different business areas. A busy time! But it will be a great challenge.