Ahead in the Cloud: Posten Bring's Cloud-powered Evolution from Paper to Pixels with Arne Berntzen

Chad Watt: Welcome to Ahead in the Cloud where business leaders share what they learned on their cloud journey. I'm Chad Watt, Infosys Knowledge Institute researcher and writer. Today I'm speaking with Arne Erik Berntzen, Chief Infor-mation Officer of Posten Bring, the major postal and parcel delivery organization in Norway. Posten Bring is also in the logistics and delivery business across the Nordic region.

Arne joined Posten Bring 18 years ago after consulting with the organization on modernizing and organizing its tech-nology systems. Arne worked for Oracle at the time. Welcome to the podcast, Arne.

Arne Berntzen: Thank you for being invited and being here.

Chad Watt: So what caused you to move from consulting with Posten to working there full time?

Arne Berntzen: I was contracted to Posten Bring in 2005. Then this was in a large program investing a lot and I learnt a lot about or got a lot of insight into Posten Bring about the complexity, their industrial division, how they were working, about the technology they were using, and all these kind of things, and that interested me.

And I was actually a bit surprised, because I thought this company was a bit boring. You know about a postal compa-ny from the outside delivering letters, that was only my knowledge. But to be a consultant in Posten, that was actu-ally a learning curve for me to see what they were doing, and I like to be part of this.

Chad Watt: So talk to me about that time when you began in 2006. What was the primary work in front of you?

Arne Berntzen: Yes, we can split this between two areas. One of the areas is the postal area, which we had to modernize and do a lot of investments to make it more simplify into the future. We had a lot of complex IT system that was custom-made, which is what you typically call a spaghetti code, that needed to be put into a more modern architecture.

We moved custom-made application into standardized ERP system, CRM system integration, data warehouse, all this kind of standardized IT system to be more cope with the future. That was the postal area.

And the group had also invested a lot into other kind of business like logistic, which will be a growing business. All these logistic company, they had their own IT operations, they had their own IT infrastructure, they had their own vendors and their own IT organization, and they needed to consolidate everything from these bought company into a common IT setup.

We also had to integrate the infrastructure across all the companies they have bought. And actually, if you go back to 2006, to share a document internally in the company, we have to use an external portal. So meaning we had to inte-grate into same network, same email system supporting application. So there was a lot of consolidation, industriali-zation to make a more common IT organization and a setup across the whole group until 2015. So a lot to do in this period.

Chad Watt: Arne, you've been CIO at Posten since 2017. In that time, what has become the most critical work in front of you?

Arne Berntzen: So that was a big change from 2017 or maybe '16 that until 2016 the focus had been more internally and then we moved the focus externally. We had always been doing a lot of innovation but we moved this out in the market. We also looked into new ways of delivering IT more or less learning-based fail-fast type of working, and also we needed to get the more correct skills to be able to deliver what we needed into the future.

Chad Watt: Talk to me about how you take that technology, make it external and empower your workers and your customers to make the most of Posten Bring's technology?

Arne Berntzen: I can go and start around 2018, '19, we start to push technology back to the business. We actually start a process with a more decentralized IT, and that was actually to be able to go into the market to compete in the market.

Remember, we are coming from to be a postal company, that was our prime business, and then we have moved into the logistic area, the e-commerce area. In this area there's a large competition. There is a lot of demand from the customers, you need to have all kinds of services, and there is a lot of players out in this market which are may-be not the type of company we are but more typically digital-born kind of companies which we are competing with.

This meaning we had to push IT more to the business and to join the forces from the business and the IT and work together in the distributed IT organization to actually be able to compete in this market and to be more customer-driven in our way of working. That has been ongoing since 2018 and it's still ongoing.

Chad Watt: In our prep you mentioned the letter is dead. What does the future for Posten Bring hold and how does IT support that? Can you describe how Posten Bring, your technology department and your partners have worked to do more to put that back into the hands of users, the ITSM work you're doing?

Arne Berntzen: Our customers is digitalizing the letters and moving that other type of technology. So in the future, the letters is something that's going away as a product today, and we have to work in the different kind of business, and that is where we are going in the e-commerce area and to try to feel to grow there, and we are working together with our partners to be able to do that.

And from our partners we are getting capacity, we get the technology, and we work together with the business and actually be able to deliver together with the business in a distributed IT organization in this market.

Chad Watt: We think about steam-powered businesses that evolved into electric-powered businesses and we talk about kind of, I call it, paper-driven businesses that have evolved into digital businesses run, powered by IT. So how is IT like electricity?

Arne Berntzen: Yeah. I'm putting a bit to the extreme with this example, but remember I said we're talking about we have merged our IT organization together with the business and they have actually been organized in the common groups with the business people and the IT people.

Typically, back in the days we were talking about business, IT as two separate disciplines. I don't think we are at that level anymore. IT is become something that everybody's using. And if you go to young people now and skilled peo-ple, the workforce today, they use IT as one of their just the way you need to use to do your work. You take it as something you always have like electricity.

And that is the way I'm thinking about in the future that some of the IT stuff you are using is something that every-body use and don't think about, which getting electricity to your computer, whatever, you still need skilled people in certain specialist areas, but everybody's doing and using IT to produce their services.

And that has helped us when we are melting business people and IT people together, because business people have their knowledge for specialty from the business, but they also have a lot of knowledge into IT, and then you merge IT people together with them and then you get the perfect match to deliver whatever you need out in the market in these dedicated teams.

Chad Watt: You are proud to say that Posten is now known for its innovative thinking. Can you tell me about a time when Posten has been innovative?

Arne Berntzen: If I go back to 2014, around there, our [inaudible 00:08:27] workforce delivering letters used paper-based reports to deliver letters. It was written in your paper and you have to follow whatever you had on the paper. That was not something you like to use into the future.

So in 2014, we digitalized that solution with using commodity electronic solution like iPhones, and we also build a brand new digital platforms underneath this. And by using consumer technology with iPhones, the user adaption was quite easy because the end user was the postman who is not typically an IT skill person then, was used to use the iPhone or another phone privately in their own life.

And then using an application on iPhone, it was quite easy to go over from paper-based version of the functionality to an electronic solution based on iPhones. This was an internal-focused innovation. But when we first had this elec-tronic or this new platform supporting the postman, we can use that as a platform to develop a new customer-oriented solutions.

So later we've added lot of services on top of this platform. And one example is that if you want to have us to pick up a parcel at your home, you can just order it on the one portal in Posten, and then the postman get a notification on their application on the iPhone and they know they're going to pick up a parcel at your home. So that is an exam-ple of where we first do a digitalization of an internal-focused application, which we in the next round use as an ex-ternal-focused innovation.

Another example which are more on your one that was in December, that is something we did on the technology side, we build a new warehouse outside Oslo, that's the main capital in Norway. Typically, you build up a new ware-house with wifi connection, 5G connection inside your building. I was always wondering, why have it double? Why do we need a mobile network and a wifi network? And we merged these two together and just build a 5G private network inside our new warehouse.

It was a 70,000 square meter warehouse, not big in the international standards, but locally it was a big warehouse, and this was only with 5G. And everything is connected up on 5G in a private network. And this simplify things and this also make it better user experience for the end user and a better coverage in a large building like a warehouse. So that is two example of innovations.

Chad Watt: You've done a lot of work to modernize mainframes and develop platforms that deliver IT to your users, and that technology delivers more sophisticated capabilities than ever today. How do you keep track of it all? In other words, what's the value of having good IT observability across your organization?

Arne Berntzen: Yes. We have made one big observability platform across our portfolio of applications, and we have started that journey together with our prime vendors. We made one big solution replacing of one of our core application, and there we build a monitoring solution showing the real end-to-end value chain across the different application across the business operation, and we see the real operation of the group.

Remember that we have now made a distributed IT organization. In a distributed IT organization, you have different teams working autonomous, delivering their responsibility. In the old days, you had the classic setup, you had one monitoring solutions showing everything, and then you had one vendor having the full responsibility and stuff like that. But when you're going to a distributed IT, you have all these kind of teams doing their own stuff.

Putting an observability platform across these teams makes it possible for us to see actually the behavior of the dif-ferent system, the different teams on how they deliver IT, how we are actually able to deliver quality across the dif-ferent team and applications. As I told you, we've just started this journey, but it is showing the value.

We have typically, at peak season before Christmas in the logistic business where we have high volume with parcels, with this observability platform we are able to show the ability and how well the each application is working on each area. But we also see it down to the machines, and we see it in the physical production on the physical plants.

And we had one incident during this period this year. And normally the businesses was calling us previously and ask-ing, "Do you have an issue with the IT?" This year we called the business and asked, "Do you have an issue?" And it seems like they didn't have the issue but they actually had a coffee break, but we discovered that in the observabil-ity platform.

Chad Watt: We've talked about technology but we haven't yet talked about artificial intelligence. What is Posten Bring doing on the AI front?

Arne Berntzen: We as the rest of the world, we are starting using AI and generative AI. And in our DNA is that we are not going to do something that is not bad or going the wrong direction. We like to do it in an ethical way, we'd like to do it in the proper way and a secure way.

So we are starting the process with this generative AI to see how we can use this in a secure and a proper way to do it to deliver good services internally and externally. So we are piloting generative AI and to learn how to utilize this kind of technology in a safe and secure way, and also an ethical good way.

And if you go to the normal AI, whatever you can call it, we will start using that in all these kind of application and platforms into the future in a good and proper way.

Example with the observability platform we were talking about previously, when you are monitoring a system, I like to use this kind of AI functionality to actually predict what will happen and make sure that we are doing the proper action before it happens. So we are starting using AI on the observability platform also.

Chad Watt: Tell me a little bit more about how Posten Bring and your partners are putting governance's code to work?

Arne Berntzen: This is something we have just started on, and remember that when we are going to a distributed IT model. Previ-ously we had the classic setup, you had all the control in your model, in your way of setup, your processes. When you're making a distributed IT organization, you're letting responsible [inaudible 00:15:44] establish autonomous team, they're doing their own stuff, and they're following their own product, whatever you can call it. They use their own platform like Trello, like Azure DevOps, like Slack, whatever they prefer to use. We can't push them to use what we like them to use.

What we then use, we use a product like ServiceNow with their APIs and we try to push now out APIs, whatever, to actually establish governance by code into the future, replacing the old way of doing it with processes saying that standards you should follow, these are these procedures.

So we are getting the good side from the teams working with their way to do it in an autonomous team. They can decide whatever they like to do, but we put this code platform across the teams to integrate them.

And one other example is this observability platform we're talking about previously. We put this as a platform across the distributed IT organization to compensate what we have left or lost when we're going to distributed IT organiza-tion.

What I can say, we have just started on the journey, and this is something we just need to do much more of into the future.

Chad Watt: That's really something, and that really does encapsulate your time going from organizing things that were spaghetti or not integrated or things you couldn't literally share documents to a world where IT is empowering everyone to be customized and bring solutions to the customer with IT as the thing powering them. They've got the power and the control given by the technology that you've built up. And there's some standards that run through these, but every-one's empowered to customize it for their own work. That's a really powerful message, Arne. Thank you so much.

Arne Berntzen: You're welcome.

Chad Watt: This podcast is part of our collaboration with MIT Tech Review in partnership with Infosys Cobalt. Visit our content hub on technologyreview.com to learn more about how businesses across the globe are moving from cloud chaos to cloud clarity.

Be sure to follow Ahead in the Cloud wherever you get your podcasts. You can find more details in our show notes and transcripts at infosys.com/iki. That's in our podcast section.

Thanks to our producers, Christine Calhoun, Yulia De Bari, and Dode Bigley. I'm Chad Watt with the Infosys Knowledge Institute. I'm signing off, and until next time, keep learning and keep sharing.