TVH Equipment

TVH reaps rewards of massive digital transformation

Takeovers are often a good way to expand quickly, and this has been a successful strategy for forklift truck company TVH for many years. When CIO Kris Feys came on board in 2015, he saw lots of possibilities for IT and online sales contributing to their rapid growth, so he launched a transformation project to prepare the company’s technology for the future. Halfway through this project, he has already achieved new gains in efficiency and improved business processes, in particular contributing to the company’s top line.

What are the key take-aways?

  • TVH Equipment has modernised its entire application landscape
  • All applications are now available in the cloud
  • New strategy enables fast innovation

Remarkable numbers

  • 6: six of the company’s ten applications have been modernised or redeveloped, with the remainder replaced by software packages
  • 1: TVH aimed for a 1% gain in efficiency in the first year
  • 160: after six months, the IT team had 160 employees – a tenfold increase since the start

The new CIO Kris Feys wanted to adopt a cloud-first strategy for TVH Equipment, to replace its somewhat outdated client-server applications. ‘Our IT was rather traditional, all things considered. Some applications were no longer supported and we needed lots of bridges and patches to keep them afloat, which was far from ideal. We wanted to modernise our applications and make them available via Microsoft Azure to ensure our IT was faster and more efficient, flexible and secure. This made it is easier for us to be innovative, for example with predictive maintenance.’

Feys got several enterprise architecture experts on board to take a close look at each application and component. The team started by determining per process what TVH wanted to achieve. This analysis was conducted through IT eyes, but very clearly from a user perspective. Where are we already efficient, and what do we benefit from the most? Answers to these questions determined how the strategic IT plan was outlined.

He was able to convince the management by spreading potential gains pragmatically over a number of years, which also made it possible to calculate the payback period. ‘Directors want to be able to quantify the ROI of a modernisation like this, but I don’t believe in blindly setting ambitions of 15% or more. Even though we started with just a 1% gain in efficiency, we’ve been able to convince the board about the projected benefits at the end of the journey.’

Like sweet mustard

TVH called on Cronos Group to help supervise the transformation. Feys: “Cronos thinks out of the box and works pragmatically, one step at a time. They have a large network with lots of expertise and experience in many domains, which is really useful for such a large project.” Moreover, they also wanted to help with the investment, so together we set up the Sweet Mustard joint venture with their Cronos-aan-de-Leie cluster in Kortrijk, who will implement the process and then commercialise the experience gained.’

In order to decide which applications to retain, modify or replace, TVH called on another Cronos company, Bespoke. They implemented Gartner’s 6R strategy for this – six techniques for modernising applications – and gave each application a cloud score. Above a certain cloud score, it’s sufficient just to modify existing code to prepare applications for use in the cloud, and for the others it’s best to code from scratch to ensure applications are cloud-native.

Fresh start

The CIO still endorses all the technological and architectural choices, however. ‘Even though around half of the work is still in the planning stage, our new architecture already allows us to test new technologies such as artificial intelligence, so we’re already in a position to maximise the first proven gains in efficiency. It’s the same as for the rest of our transformation project: we’re ready to reap the rewards.’

TThere is less churn and our regular customers are buying more, so the digital transformation is already earning us money.

– Kris Feys, CIO van TVH Equipment

Employees have more autonomy

Innovations such as this would have been impossible without modernisation, according to Feys: ‘In the past, our product managers always had to ask IT to implement even simple changes to their portfolio. But now they can do it themselves, so we can act much faster. Regional managers can also use our new pricing engine to calculate and adapt prices, and no longer need to bother with price lists and updates. Our processes have been greatly improved.’

Virtuous circle

Feys is seeing customer loyalty improve as a result. ‘There is less churn and our regular customers are buying more. So our more efficient planning is already earning us money, and employees can perform other tasks – which means we’re saving in other areas, too. Other projects such as the internet of things and track-and-trace are difficult to express in terms of added financial value, but also improve customer satisfaction.’

Fast pace

The CIO admits his IT organisation experienced some growing pains. ‘The speed of our transformation is unprecedented. We started 2017 with 15 people in our IT team, and this had increased tenfold less than six months later. All this involves more governance, structure, quality management and so on, which all take time. I would do it all again, albeit at a slower pace.’

Time to reap the rewards

The CIO still endorses all the technological and architectural choices, however. ‘Even though around half of the work is still in the planning stage, our new architecture already allows us to test new technologies such as artificial intelligence, so we’re already in a position to maximise the first proven gains in efficiency. It’s the same as for the rest of our transformation project: we’re ready to reap the rewards.’

The CIO still endorses all the technological and architectural choices, however. ‘Even though around half of the work is still in the planning stage, our new architecture already allows us to test new technologies such as artificial intelligence, so we’re already in a position to maximise the first proven gains in efficiency. It’s the same as for the rest of our transformation project: we’re ready to reap the rewards.’

Kris Feys, CIO van TVH Equipment

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