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Trude Bakkebø, director of infrastructure and operations, Intrum
Photography: Ulrike Frömel
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Intrum: Underpinning a business scale-up with tech transformation
The streamlining and modernizing of core IT has enabled Intrum to consolidate its position as Europe’s leading debt collection and purchasing company. Trude Bakkebø, director of infrastructure and operations, outlines the role a two-year technology overhaul has played.
When two of Scandinavia’s financial services companies joined forces in mid-2017, expectations for the success of the new group ran high. The combination of Sweden’s Intrum Justitia and Norway’s Lindorff — both specialists in the purchase of consumer debt portfolios from financial institutions and the management of debt collection – was designed to create a market leader with operations in 24 European countries, a workforce of around 8,500 and revenues in excess of SEK12.2 billion ($1.25bn).
Critical to the success of the merger were anticipated synergies: the new company, Intrum, was expected to see annual cost savings of approximately SEK800 million ($82m) within three to four years — with much of that stemming from on a rationalization of IT.
“With the merger, we took on a lot of commitment to deliver synergies to the market,” says Trude Bakkebø, Intrum director of infrastructure and operations, who has led the company-wide transition and transformation (T&T) program. “And the IT area was seen as one of the key enablers of those synergies.”
The starting point for the two-year initiative was two very different IT setups that had evolved from years of international expansion. “If you look at the footprint of both companies before and since we merged, growth through market consolidation has always been a central theme. We are constantly changing, with a flow of around three to four acquisitions per year. And it’s part of our day-to-day business to onboard new operations and absorb the IT part of another business,” says Bakkebø.
The formation of the new Intrum required the creation of more fundamental IT underpinnings that were suited to supporting dramatically more efficient operations, automation and standardized processes and applications. But the first step to that was standardizing the technology infrastructure, she says.
Comprehensive scope
After evaluating its options for a new IT foundation in 2017, the company decided to consolidate around the previous Lindorff model, where IT had been provided as an outsourced, centralized service by digital transformation company Fujitsu for the previous five years. That contrasts with the previous Intrum Justitia approach in which its individual country units were expected to run their own IT services and managed end-user services locally.
“The reasoning behind this choice was clear: we needed to have a set-up that supported our strategy around growth, that gave us the right quality and predictable costs [through the Fujitsu IT-as-a-Service model]. But, critically, adopting that solution of a consolidated, centralized infrastructure and standardized services was the fastest way to achieve the business synergies we were looking for,” says Bakkebø.
When two of Scandinavia’s financial services companies joined forces in mid-2017, expectations for the success of the new group ran high. The combination of Sweden’s Intrum Justitia and Norway’s Lindorff — both specialists in the purchase of consumer debt portfolios from financial institutions and the management of debt collection – was designed to create a market leader with operations in 24 European countries, a workforce of around 8,500 and revenues in excess of SEK12.2 billion ($1.25bn).
Critical to the success of the merger were anticipated synergies: the new company, Intrum, was expected to see annual cost savings of approximately SEK800 million ($82m) within three to four years — with much of that stemming from on a rationalization of IT.
“With the merger, we took on a lot of commitment to deliver synergies to the market,” says Trude Bakkebø, Intrum director of infrastructure and operations, who has led the company-wide transition and transformation (T&T) program. “And the IT area was seen as one of the key enablers of those synergies.”
The starting point for the two-year initiative was two very different IT setups that had evolved from years of international expansion. “If you look at the footprint of both companies before and since we merged, growth through market consolidation has always been a central theme. We are constantly changing, with a flow of around three to four acquisitions per year. And it’s part of our day-to-day business to onboard new operations and absorb the IT part of another business,” says Bakkebø.
The formation of the new Intrum required the creation of more fundamental IT underpinnings that were suited to supporting dramatically more efficient operations, automation and standardized processes and applications. But the first step to that was standardizing the technology infrastructure, she says.
Comprehensive scope
After evaluating its options for a new IT foundation in 2017, the company decided to consolidate around the previous Lindorff model, where IT had been provided as an outsourced, centralized service by digital transformation company Fujitsu for the previous five years. That contrasts with the previous Intrum Justitia approach in which its individual country units were expected to run their own IT services and managed end-user services locally.
“The reasoning behind this choice was clear: we needed to have a set-up that supported our strategy around growth, that gave us the right quality and predictable costs [through the Fujitsu IT-as-a-Service model]. But, critically, adopting that solution of a consolidated, centralized infrastructure and standardized services was the fastest way to achieve the business synergies we were looking for,” says Bakkebø.
The two-year T&T program that kicked off in December 2017 was massive in its scope. “We are talking about the full outsourcing of the IT resources to our partner Fujitsu,” says Bakkebø. “Help desk, end user services, desktop managed services, security services, data center services and network services for an end user group of around 10,000 now, in 40 sites across 24 European countries, including the hosting and management of around 1,300 application and database servers.“
Among other moves, it meant Fujitsu taking over Intrum Justitia’s data center in Schiphol, Netherlands with the aim of migrating what was a largely legacy environment to new data centers set up in Germany and Finland.
Bumps in the road
The two-year program is now in its final months but a transition on such a scale was not without its major challenges.
“Of course it’s always a bumpy road with these kinds of projects. But we are now very close to having the internal state that we were aiming for, where we have a set-up that is much easier to scale up and scale down — one that makes it much easier for us to onboarding [other new companies] when we have M&As,” says Bakkebø.
Aside from the infrastructure upheaval, she points to the cultural shift that the centralization and standardization have been required within many areas of the company. Intrum Justitia users and people dealing with the Schiphol data center, for example, were much more accustomed to having on-site service capabilities.
“There are change management challenges when you no longer have a guy on site to log tickets with or a local expert who knows the details of your customized application,” she says. “In all process changes, you should never underestimate the effort and time needed to transform people’s thinking and way of working.”
Parallel thinking
The shift to a more streamlined model for internal services in many ways echoes the external focus that Intrum has on ensuring its customer-facing channels are now increasingly digital, mobile and automated. “Our clients expect effective channels, so why should we behave any differently internally?” says Bakkebø.
Intrum is putting in place portals and automated systems for its customers who are making debt repayments or seeking support, it is reducing the need for a direct interaction with call center agents — in 2019, Intrum employed 3,500 such agents. “It seems natural that we are going through the same journey [of automation and self-service] with our internal services,” says Bakkebø.
As the two-year transformation comes to a conclusion, Intrum now wants to standardize higher up the IT stack. “With the infrastructure part in place, we are now open to take the next step: looking at the application layer and seeing what we can do there to consolidate and standardize.”
Intrum already rolls out a set of standard applications to all its European subsidiaries but it also maintains an application development team of around 300 based in Riga, Latvia. The regulatory environments for debt collection and purchasing differ subtly around Europe, so there will always be a need for some customization of applications, she points out. “But we’re looking to standardize as much as possible.”
Notably, Intrum has kicked off a major program to explore how it could bring more consistency to the processes used within Europe-wide collection systems. “The priority is to harmonize processes and ways of working in different countries so we can optimize operational efficiency and benefit from our size and scale,” highlights Bakkebø. But rather than implement a new debt collection approach in a ‘big-bang’ move, the aim is to scale out the change process by process.
Future ambitions
That will allow Intrum to accelerate and widen its application of customer interaction technologies such as robotic process automation, chatbots, data analytics and AI. “The difficulty has been the fact that we don’t [yet] have harmonized processes between countries. But all of this will be taken into this new debt collection program,” says Bakkebø.
There are also clear ambitions to utilize more cloud services and strengthen the hybrid set up that the company has today. “We have a hybrid set up today. We are migrating to Office 365 but we need to start to take the next steps, moving more of our data and application systems in the cloud,” she says. But for the foreseeable future there will continue to be clients and regulatory environments that demand an on-premise set-up.
All this activity signals that Intrum has put in place a foundation to support wider ambitions. As the company recently said: “2019 was an eventful year with the realization of the final cost synergies stemming from the 2017 merger… and revenues up 19% to SEK16.0 billion [$1.63bn]” — an observation that Bakkebø modestly sums up with “We’re not there yet — but we’re getting there.”
First published August 2020
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