May 26, 2021 - This exclusive interview was originally published by Authority Magazine
As part of our series about “How To Use Digital Transformation To Take Your Company To The Next Level”, I had the pleasure of interviewing Jan Sundelin.
Jan Sundelin is CEO of TIE Kinetix where he helps companies to bring digital transformation efforts to the next level through EDI and e-invoicing software. With 30+ years of experience in the IT industry and 15 years in executive management, Jan pioneered the notion of 100% supply chain digitalization and has brought TIE Kinetix to the forefront of innovation at a global level.
Thank you so much for joining us in this interview series. Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’m an old goat, so I’ll try to keep it short. I was born in Sweden and lived there until I was nearly 30. I attended Karlstad University in Sweden and entered the IT industry shortly thereafter. My career began with a sales job in IT hardware (printer sales), and I relocated to the Netherlands right before I turned 30. I’ve been living and working there ever since, and although I did end up living in the U.S. for a few years in the early 2000s, my wife and two daughters wanted to go back to Holland. So that’s where I am now.
When I first moved back to the Netherlands, I wanted to get out of hardware sales and move into the software space, so that’s what I did. I’ve held diverse positions in various companies over the years, but more recently, I served as CEO and President of TallyGenicom EMEA before becoming CEO of TIE Kinetix in 2008 (my current role). Now, as CEO of a company with 100% supply chain digitalization at its core, I’ve come full circle in my career: I went from selling printers and promoting the use of paper to selling software that, to a large extent, replaces printers and eliminates the need for paper. I guess you can say that my career has undergone a digital transformation of its own.
I believe in digitalization, and I believe that it’s necessary for the future. I initially wanted to make the switch from hardware to software because I recognized that innovation was no longer possible in that space. All production in the printer industry — and hardware industry in general — moved to Asia. There were no new opportunities, and as someone who is always looking ahead, I saw massive potential in software. That’s because, at the end of the day, the best printer has the best software. I also knew that the Internet would have a role in future development, and when I realized that, I realized software is the future.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I think the funniest thing I’ve learned is to be humble, and I learned that early on in my career when I was still selling printers back in Sweden. It happened when I, along with three other sales guys, were each given a list of 100 resellers that we needed to sell our printers to. One of the sales guys sold new contracts to 2 resellers out of his list of 100, another to 10, and I was able to sell to 7. But the fourth guy sold new contracts to 50 out of the 100 resellers on his list.
We had a meeting after it was all said and done, and during that meeting, I addressed the fourth sales guy in front of the group: “How can it be that you sold to 50 out of 100 and none of us were able to sell to over 10? You performed 4–5x better than all of us.” He replied by saying: “I guess I just got lucky and had all the good ones on my list.”
This conversation really captures why this man was so successful. And he’s still successful. He’s one of the best salespeople in the business. And he made me realize that sales are all about attitude. He wasn’t forcing companies into buying, he was just communicating with them and people trusted him because of it. This taught me that the most important thing is to be humble and to show respect, not only in business but also in life.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
The one person throughout my career that has helped me the most is my “business father,” Franklin Lassman. He’s a New Yorker, and he’s the one that brought me from Sweden down to the Netherlands. He trusted me and continuously gave me more and more responsibilities at a very young age — first I was responsible for Scandinavia and the Benelux region, then all of Eastern Europe and France. In other words, he really trusted me in building the business, and he was (and still is) like a “business father” to me.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
The first book that really made me think from a business perspective is a Swedish book called Riv pyramiderna (Moment of Truth is the English title) by Jan Carlzon. But there’s also a shorter book, Who Moved My Cheese? by Spencer Johnson that resonated with me. I often refer back to both of these books for inspiration, like when we have to introduce a new product at TIE Kinetix. They probably resonate with me so much because they’re old books, and I’m an old goat. But all jokes aside here’s what each has taught me:
Riv pyramiderna is all about building an organization. It was written by the previous CEO of SAS (Scandinavian Airlines) who was able to completely change the way the company worked by getting people to become responsible for what they were doing. This lesson has stayed with me in my own management style because he was right; if you hold people responsible, they take the responsibility. The main idea of the book is to let people think for themselves because everyone has the capacity to do that. And that’s how things get done. It’s something you can build on.
Who Moved My Cheese? is all about change and how humans tend to overcomplicate things. The story centers on four characters, two mice and two men, and serves as a (business) metaphor for a constantly changing world and the skills necessary to adapt and succeed. This book is especially relevant when digital transformation is at play because the willingness to change is ultimately something that an individual or company has to realize on their own. But in order to do that, sometimes you have to take a step back and look at a situation from a simpler perspective: define the problem, find a solution.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
In 2021, TIE Kinetix’s purpose is to help businesses achieve 100% supply chain digitalization by getting all of their trading partners — small, medium-sized, and large — to exchange their documents electronically. But when the company first started back in 1987, its purpose was in line with the market need at that time: facilitate EDI in the food retail industry. That’s because food retail was (and still is) the biggest retail industry in the world — 50% of all retail is food.
For those who are unfamiliar with EDI, it’s short for electronic data interchange. EDI is, by definition, the computer-to-computer exchange of business documents — invoices, purchase orders, you name it — in a standardized format, and it’s entirely paperless. In the U.S., it’s mainly used in the business-to-business space, for example, when Kraft Heinz has to send an invoice to Walmart.
The food retail industry is why EDI became so popular. It’s also why TIE Kinetix started; EDI requires software. When all of the documents that go between suppliers like Kraft Heinz and buyers like Walmart are digitalized, you can save a lot of money and avoid a lot of mistakes. It’s also better for the environment. That was our initial purpose, and even though the situation has evolved and technology has evolved along with it, it’s still the reason we exist.
Are you working on any new, exciting projects now? How do you think that might help people?
As an international company with offices in the Netherlands (HQ), the U.S., Germany, and France, as well as a global presence, our developers are always working on something new and promising. But right now, there’s a lot of exciting developments happening in EDI in the U.S. in terms of standardization — something that will simplify EDI and make it more accessible to all. We’re focusing our efforts here because about 40% of our business is situated in the U.S., mainly in the manufacturing industry.
To expand on standardization, even though the U.S. is very advanced when it comes to EDI, they’re behind Europe when it comes to digitalizing invoices (e-invoicing software). And that’s a big challenge for U.S. businesses because the ability to send invoices electronically enables process automation, and that’s the first step towards supply chain digitalization. In Europe, we have this big network called the PEPPOL network that makes it easy for businesses to quickly and easily connect with each other to send their documents in a secure way. And it’s a global network, so it opens a lot of doors to expand trade, for example, from Europe to Australia, New Zealand, and Singapore.
Right now, the U.S. doesn’t have the PEPPOL network or anything similar. That basically means that every business has their own way of sending electronic documents, and this makes it really time-consuming and expensive for businesses to actually get started. There’s an organization in the U.S. called the Business Payments Coalition (BPC) that’s working really hard to change this, and they’re doing an in-market pilot in 2022 to test out the possibilities for establishing a PEPPOL-like network in the U.S. This is really exciting for everyone involved, even though a lot of businesses may not realize it yet.
But in the meantime, we’re doing a lot to help U.S. businesses achieve 100% supply chain digitalization as efficiently as possible until standardization matures. Ultimately, it’s what’s necessary for them to compete in today’s market and they need to get there either way. For years, we’ve been working on this huge global mapping repository that enables us to replicate entire structures built for one customer, say, the Municipality of Amsterdam, and reuse it as the base for another (potential) customer, like the City of New York. The possibilities are endless, and businesses today don’t have the luxury of moving slowly. They need to move fast to remain competitive, and this will save them an incredible amount of time.
Thank you for all that. Let’s now turn to the main focus of our discussion about Digital Transformation. For the benefit of our readers, can you help explain what exactly Digital Transformation means? On a practical level what does it look like to engage in a Digital Transformation?
Digital transformation is a broad area, right? So what is digital transformation? Well, it’s music for one thing. Just think of Spotify. But that’s something totally different. What we do at TIE Kinetix is a digital transformation between companies. It’s business-to-business, or B2B.
Going back to my history of selling printers and promoting printed documents, you can think of digital transformation, and what TIE Kinetix does in general, as the direct opposite — selling software and discouraging printed documents. For us, we support a business’s digital transformation efforts by digitalizing all of their communication with their trading partners, and it’s all in the background because everything is integrated with their ERP or other back-office systems. Everything is 100% digitalized, and it enables complete process automation from order to invoice.
In doing all of this, we’re also able to contribute to environmental sustainability. With all of the documents that flow through our platform each year (over 81 million), TIE Kinetix helps companies to save about 10,000 trees each year. So this is just one example of how digital transformation can help to improve other areas of the business that might not seem obvious at first glances, like an enhanced corporate social responsibility strategy.
But that’s just digital transformation in terms of document exchange. When it comes to achieving complete digital transformation, a business can’t realize that with our solutions alone. Service providers like TIE Kinetix certainly play a critical role in this transformation, but in order to really succeed, businesses need to understand that digitalizing isolated processes will only get them so far in today’s day and age. Now, digital transformation requires an end-to-end mindset and a long-term outlook.
Which companies can most benefit from a Digital Transformation?
That’s a good question. End of the day, if the U.S. government would digitalize all of their incoming documents, I think they would save over $10 billion annually. For the most part, individual European countries have made it mandatory for government suppliers to send invoices electronically, and this is resulting in savings of over €20 billion per year in Europe as a whole. This ultimately benefits the taxpayer, but it’s unlikely that the U.S. government will launch an initiative like this because the U.S. is run by private sector organizations.
So with that, I’ll say this: Walmart digitalized their entire supply chain over 15 years ago, and they save millions each and every month because of it. And they have an EDI department of about 150 people. So they can pay 150 people and still save millions every month. And as I’ve already mentioned, the food retail industry is already advanced with EDI. And it’s the big guys like Walmart that have pushed it forward.
Other industries, like the automotive aftermarket, have been slow to catch up. But now things are moving really fast and every forward-thinking business is undergoing some form of digital transformation just to stay in business. So in the U.S., it’s companies like these in the business-to-business space that can most benefit from digital transformation. In the end, it will save them a lot of money and put them in a better position to move forward. Especially as international trade continues to increase and manufacturing companies aim to achieve lean supply chains, digitalization is the only way to avoid the mistakes that inevitably occur due to language barriers and human error in general. Oftentimes, for these companies, digitalization is the difference between earning profits and losing customers.
We’d love to hear about your experiences helping others with Digital Transformation. In your experience, how has Digital Transformation helped improve operations, processes and customer experiences? We’d love to hear some stories if possible.
We have a lot of really great digital transformation success stories at TIE Kinetix, but here are a few customer cases that really stand out:
For starters, Clopay has been with us for many years. They’re an industrial door manufacturer, and before we came along, they were doing all EDI operations in-house. But their own system was complicated, provided limited visibility, and connecting trading partners was a pain. With our solutions, Clopay ended up saving over $80,000 in their first year of service alone. And that’s just the face value, because, overall, we helped them to increase visibility, efficiency, and response to changing market conditions.
Then we have Bunzl, a large international distribution group that provides customized solutions to B2B customers. They wanted to move everything to the cloud because the cost of managing everything in the house was getting to be much too high. First, we helped them to achieve their cloud ambitions by migrating all of their EDI data to the cloud, which ensured that they wouldn’t have to hire any additional help on their EDI team. We also reduced the time it took for them to connect to new trading partners. From months to seconds to be exact.
The last one I’ll mention is actually not a customer. It’s a Municipality of Amsterdam supplier, Marcel van Oostveen, who runs a one-man business and was required to send his invoices electronically. Amsterdam uses our software, and Marcel had to log in to their supplier portal any time he wanted to send them an invoice. But he flat out told us that the portal was way too complicated for someone like him that has no other experience with sending invoices electronically. So we worked with him directly and changed our software to reflect his needs. This ultimately helped Amsterdam to achieve a higher level of digital transformation because we made it easier for their suppliers to meet their requirements.
Has integrating Digital Transformation been a challenging process for some companies? What are the challenges? How do you help resolve them?
The biggest challenge for any company that wants to achieve digital transformation is to communicate the “why” to other stakeholders. Our customers hear a lot of “I already send a digital invoice because I email you a PDF, why can’t you just use that?” and “This is how I’ve always done things, why should I change?”
It comes down to training, training, and more training. Providing people with the right information and communicating the benefits for them. Or you can solve the problem the easy way, like the Swedish government. They told all of their suppliers, “If you don’t send us your invoices electronically by April 1st, 2016, we’re not going to pay you.” But that is, of course, not going to work for everyone and could be damaging to business relationships. So most choose to go about it the hard way, which is the communication route.
For our customers that have chosen to educate their trading partners in the hopes that they will eventually come around, we support them every step of the way, but it’s a long journey. I’ve never seen any company succeed in this without applying some pressure, but it doesn’t have to be as harsh as what they did in Sweden. But when it comes to communicating the benefits of digital transformation, most companies realize that it’s better left to the professionals — service providers that have helped other customers overcome the same challenges. On our end, we figured out a way to automate the entire process. That gives our customers a huge advantage.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are “Five Ways a Company Can Use Digital Transformation To Take It To The Next Level”? Please share a story or an example for each.
1. Be proactive rather than reactive. In our industry, supply chains have faced a lot of disruption as a result of COVID-19, and many have struggled to achieve business continuity in unexpected circumstances. They reacted by rushing to adopt digital technologies to solve problems in the short term but quickly realized that what they really need is a long-term plan. When a business is proactive, it can achieve digital transformation in a more thoughtful, phased approach.
2. Think end-to-end. As I mentioned earlier, digitalizing individual processes isn’t enough to achieve digital transformation. When companies look to achieve an end-to-end supply chain, they’re setting themselves up for success. They can do this by ensuring that all digital technologies they invest in can be integrated with existing and future technologies. They’ll avoid data silos and begin to make strategic decisions based on complete supply chain transparency.
3. Boost internal and external morale. Internal buy-in goes a long way, and so does external buy-in. Everyone needs to be onboard — internal stakeholders and trading partners alike. I can’t stress this enough. It’s a direct influence on how successful a company’s digital transformation efforts will be. Readiness and willingness to change are key.
4. Focus on the core business. Digital transformation is all about optimization through the use of technology. When done right, time-consuming and redundant processes are automated and a day gets a lot longer. Digital transformation helps companies to shift their focus back to what matters — becoming the best in their field and getting ahead of the competition.
5. Test new strategies. A fully integrated, end-to-end supply chain opens the door to new and improved ways of doing things. This is when digital transformation can really take a company to the next level, especially in the manufacturing industry where every company aims to adopt just-in-time (JIT) methods and operate a lean supply chain. Companies can also test the waters with vendor-managed inventory (VMI) and 3-way matching. The list goes on.
In your opinion, how can companies best create a “culture of innovation” in order to create new competitive advantages?
At TIE Kinetix, we believe the best way to foster a “culture of innovation” is through internal education. We do that through our educational platform, FLOW Academy, because in an industry as complex and technical as ours, it’s important that everyone understands what we’re doing and why we’re doing it. It’s a matter of learning the ins and outs of what we sell (our products), what we do for our customers, what separates us from the competition, and why we’re successful (or not successful) in certain areas. Along with that comes a certain level of transparency that’s equally important in encouraging innovative thinking that naturally leads to solutions that outperform those of the competition.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite quote is Nike’s “Just Do It.” I think that you need to just make things happen because if you don’t make things happen, you can’t get to the next step. You won’t even know what the next step is, really. And even if you mess up on the first step, you can probably correct the mistake when you take the second step. So “Just Do It” is a reminder to myself to make things happen. Sit still in this industry and you won’t go anywhere.
How can our readers further follow your work?
Follow TIE Kinetix on LinkedIn and/or sign up for our blog. You’ll find a lot more on digital transformation where this came from!