IKEA: How the Biggest Integration Landscape in Europe Manages Complexity [Integreat 2025]

Transcript:

My name is Johan Linder. I’m here today with my distinguished colleague, Johanna Hellberg.

I’m gonna elaborate a little bit how IKEA manages, the biggest integration landscape in Europe and how we manage also complexity and stay current at the same time. Before I start, I heard we have distinguished people here from the home office.

Yes. So many thanks for a very simple ETA visa application process.

It worked as a charm. £19 and you’re done, even if you’re from Sweden.

So I’m not used to that. You know, it used to be shagging and all that, but that’s good.

The agenda for today, we’ll have a short intro. We will, elaborate on understanding the IKEA history, a little about the business development 1943 until 2026.

I’ll try to keep it brief. We’re not going to discuss and make this into an episode of Emmersdale Forum or something else, but rather short and concise.

A little about the IT journey, because we have evolved from the very beginning, if you wish. A little about the integration concepts over time, our batch mechanism that will be used.

We will discuss a little bit about the IKEA data routing system, which we now have. It’s a huge legacy system that we are dismantling successfully.

We will talk also about the IT transition from a supporting process to a business process and what that means for us. We will discuss simplification through migration and the different efforts we are pushing through there.

We will elaborate on development and platform and then of course lessons learned. And before I went here, of course, I went to the keynote as well and I thought that IKEA, we got to be alone.

It’s it’s, we’re in a dire situation and I figured out that that Bormann Ingleman has the same problematic situation that we do. A lot of old systems has been used continuously, isolated or connected, but the data is maybe not the same.

It’s not consumable. It’s a hard nut to crack.

But I will elaborate later in the presentation. Shortly about me, I’m a platform leader for B2B webMethods, IDRS, the big dinosaur platform I just mentioned and SnapLogic as well.

I’ve been a regular board member at IKEA IT in the past, solution owner of data integrations for the lots, solution architect, senior product manager, etc., etc.. So I’ve seen some, how should I say, things in my career at IKEA as well over the last fourteen years.

And with me today, I have Johanna. She’s also a platform leader.

You want to introduce yourself? Hi, Johanna Hellberg.

Yes. Johanna Hellberg, working with IKEA for three years, coming from H&M.

Also a big huge IT landscape, so from one to another. Today, I am a platform leader and I am the service delivery responsible for bringing new technology into the legacy platform with OSP program.

Yes.

Sure. So without further ado, well, welcome to IKEA World.

Back in 1943, our founder, Invar Kaprat, started IKEA in a small shed in Almhult. Today, we’re a franchise business with more than 230,000 coworkers in over 60 markets.

We reach billions of people and homes through our stores, planning studios, online presence, and more. We have a unique value chain that starts with design and continues through manufacturing, supply, and retail.

But just relax. You’ll have plenty of time to learn about this.

You don’t have to feel alone walking to Ikea. Believe me, we all do things together, and everybody will also get the support that’s needed.

It can be overwhelming, and I would say start with understanding your little piece of the puzzle. And as you’re working, you’ll slowly see the other pieces fall into place.

Alrighty. A short reflection on this infomercial.

IKEA can be overwhelming at times. Yes, definitely.

If I want to have something done, I’m often I’m shocked about the amount of integrations I’m facing or need to investigate in order to do something. If I want to roll out something to the retail sites, I remember my first party in 2012, rolling out three blade service into four twenty IKEA retail sites that was an effort of roughly EUR 14,000,000, 26 resources and two point five years.

So a very small project becomes very big. Now that’s all changed in virtualization and everything, of course, but we see improvements on that area.

Start with understanding your piece of the puzzle. You will slowly see the other pieces fall into place.

Yes, that’s maybe true if you’re in a certain domain like retail or supply or range, But as systems are communicating between the domains, it’s hard to maintain vision what’s happening with data. Who are consuming the data being sent from a source system to another? And where is it going? And how is it responding, etc., etc..

I’ll show you the perfect example of that later in the presentation to show you the complexity. We do everything together.

Everyone will get the support that they need. That’s true, but it’s darn difficult from a platform perspective to go to CEO and say, hey, can I have €50,000,000 I got a LCM product, I need to face on one of my platforms? He will ask me what’s the return on investment.

Maybe based on. But in this case, we have certain challenges we have to mitigate and therefore we move forward.

We do this as we have 230,000 co-workers in 64 markets. So it’s an open heart surgery at the same time, which makes things really, really complex at times.

And at the same time, IKEA has the ambition to be the world largest omnichannel retailer of home goods. We have the traditional Inca warehouses.

We have all seen those really large 40,000 square meters warehouses. We also have city centers.

There are points of presence or stores in a store and coming back to City Sense, I think there’s a one store in Oxford Street. That’s a typical example of a smaller IKEA store, if you wish, in the city center.

There is pick collect and there is different service of delivery offered. So IKEA is constantly seeking after the right concept of selling furniture just to make it really easy for everybody to collect what they have ordered.

If you now have ordered a new kitchen, you might not be so how to say amused to wait for two hours getting your pieces that you’ve ordered with a new couch from whatever brand or I would say Mark or with size. You like to have it delivered at home or even assemble at home.

So there are other services to where we’re looking at exporting to support those processes. And at the same time, we also have carbon neutrality goals.

Looking at packaging, if we open the sea container at IKEA, there is no air, literally. None whatsoever.

From bottom to top, it’s loaded with packages that has been planned that way. So it’s no spillage.

Shipping, well, we try to see what’s possible. In Amsterdam, we’re putting electrical like rickshaws, red ones, to make small deliveries because that’s climate neutral, right, and it doesn’t have an impact on the environment.

So why not? We’re testing different concepts. We have resealing.

So if a consumer has come back and they say, well, I like this chair a lot, but I really don’t see that it will fit. Everything is complete.

We have resealment capabilities in the stores. Rather than sending back the package to distribution set in The UK, which will cost a lot of diesel or effort or hours, we reseal it in the store and we put it on stock again.

It’s got complete package, it’s a sellable furniture, nothing is missing, so that’s fine. Sun sales is mandatory.

So every larger retail site we roll out today actually has Sun sales to support the electricity bill for the organization and also minimize the footprint, if you wish, from a carbon perspective. There’s investments in wind parks.

I know all over Scandinavia and other countries as well, where the Inca organization goes in and also Econo to invest in wind parks. And of course, there is real estate as well, where econo bank will go in as a real estate funder, if you wish, and they will buy it in Climate Smart flat blocks or whatnot furnished with IKEA furniture and isolate it to the latest banks.

So there’s a lot of incentive going on to reduce carbon footprint, if you wish. Moving over to the IT journey, it starts in 1969.

I think that if you visit Elmwood, you can see a nice photo of 30 people with white sort of dentist or doctor coats, all the pocket protectors. There were about 30 people, 20 people punching in hold carts and 10 operators and that was it.

Traditionally, IT has been viewed as a supporting process. Ingvar Kamprad always viewed IT as the necessary evil.

We should invest too much in that, but about as much as needed, but not more than that. So in order to understand today’s challenges with that legacy and what we have been through, one must also understand the evolution of IT history at IKEA.

So I will discuss a little bit of the integration landscape concept we’ve had over time just as a general orientation. Starting, beginning of time, we had a point to point systems, mainframe sharing data to other systems across our landscape within IKEA.

Worked as a charm, but it has its limitations. We had the CPI year, where we tried to consolidate information and share it with the system that actually needed it at the end, resulting in landscape like this.

Then we’ve got the IX era. IX era is used in the IDRS systematic or I should say the IDRS mechanism to transport data And that’s a system we have a sender node sending something to a destination node.

And there are also flavors to that. So we also have piggyback constructions.

A node sends something to node B and in then somehow somebody has constructed another integration from the receiving node, send it somewhere else. And that might not be documented as well.

So there is some, how should I say, things to be researched and validated before we move forward. Moving over time, we got the key integration platform where we kind of moved to a data cache to make a sort of a centralized point where all information can be consumed from.

So we have had that flavor as well. Works as a charm, but has also its limitations, of course.

And in conclusion to this, we’ve also had batch integration mechanisms over time where we have and that’s something that IKEA is really good at. We consume a batch of information, transport from one system to another and then an application will do something and send it on to the next one.

So we have a lot of dependencies as well. So if we look at the entire timeline, and this is now a really quick one just to save some time in interest of time.

We have had an enterprise schedule down here called Control M that has triggered all these jobs. IDRS is the platform we’re talking about from the IXF era period, which has been triggering works.

And that’s all different depending on requirements from the business. Maybe you have an update of stock in the store.

That goes maybe once every day or twice every day. We have other applications that required an update and a schedule being run every ten minutes.

So that’s all different. There’s a sort of a business logic built into this if you wish as well, because all these systems that will follow and consume the data use the schedulers as well, make it rather complex to analyze the flow.

Then something happened. We decided to implement e commerce as a part of finding our way to become the world leading omni channel retailer.

Barbara Martin Coppola came in as a CDO in 2018 with an income. She was then, how should I say, pronounced as the new CDO and COVID-nineteen strikes us as well.

And, of course, as as Barbara came in, she had also strong drive to simplify things. She came then from Google actually.

And that’s that was a good thing. Absolutely.

To drive the summer fiftilation or evolution, I would say, IKEA is known for its point to point integration patterns we’ve had. It’s been combined with piggyback patterns, which has not helped helped us.

Batch driven, not with any logic in there. And we have avoided traditionally to introduce Bistics logic in our patterns.

We have focused on downpipes and smart endpoints, letting the applications work and process the data rather than building logic into our integration. So that’s been set up so far.

So what’s the challenges at hand? Well, you guess it. We have a large technology debt of course, because many of these platforms are key and proprietary.

We need to do something about this and fall forward and migrate to other supported platforms. That’s imperative for us right now.

Of course, in that situation, the role of enterprise architecture is also crucial. If we don’t have a strategy, it’s hard for us to work out tactical plans.

If we don’t have tactical plans, we cannot work out operational plans. So that’s been the caveat.

Untangling the Spaghetti Nest. I saw the keynote just an hour ago an enormous Spaghetti Nest.

It was like a big threat. I’ll show another one in just a few moments.

It’s very comparable to that. But my advice is, in any case, start early, start small.

Even if we have small efforts on the business solution level, investigations must take place and we must start somewhere to find path to fall forward to, hence sliced elephant. I’m now going to talk a little bit about the IKEA data routing system simplified.

I’m not going to go into a lot of details here, but I discussed it was an IXF file based system, all IKEA proprietary, fantastic. So how does this affect us? Over here, we have retail stores, four twenty piece of them.

Over here, we have a CPI called Helena. So somewhere at the beginning of time, somebody has enabled the flow for business solution called CBD.

And some other people heard of this in the 80s. Well, that seems like a good idea.

Yeah. Oh, are you reading data from oh, then we’ll tag along.

So we have Athena and other solutions. I’m not asking now to test your eyes to read what actually stands here.

That’s irrelevant. It’s about the complexity in how things have grown into a large flow just on stemming from actually one source, CBD as a business solution.

If we need to untangle this, we have to look at the retail side, exactly what’s being consumed and move backwards to try to eliminate the dependencies. So that’s my point.

Looking at the active integrations, we have complete control and insight in how many integrations we have and how they communicate over the different parts of IKEA. The numbers here are irrelevant, but I think that the complexity and, how should I say they communicate within IntraCare or within INK or they exchange information to another entity like Econo Bank or another business solution or business division even makes it really complex to move anyway. Hence, something occurred here called Kvfsaml.

Kvfsaml is Swedish for counter trading power. That’s normally used in a regular rail house when you have to unload a truck that comes along with 72 pallets.

Ten minutes for 10. The store is about to open.

But here on the PA system, Kraft Samner. Everybody from the director of the store to the cleaner will run to the loading dock, push out Savvy two pallets and start to distribute the goods.

Doesn’t matter if it’s candles, glasses, napkins, furniture, within half an hour the job is done. It’s harder with IT to do kraft sound law because you will actually more or less encounter a catch up effect sooner or later.

Got but for this integration or I should say migration, we have a scope of roughly 32,250 integrations that we need to move to something else. And it concerns that range supply, retail, HR and finance.

All our systems that are important for IKEA to go about its daily business. So to simplify this, we are executing a lot of products and programs.

To start with the Business Operations Transformation Program, BOTS, with an INCA. Those guys are both addressing the business process as well as the core financial systems used within IKEA as a complete organization.

We have the order flow program, which Johanna is representing here today, where we’re looking at the critical order flow. And we have roughly 15 SL1 other business solutions and 30 SL2 business solutions that also needs to be migrated from our perspective.

So it’s a rather big undertaking. Let me see here.

So for our perspective, SnapLogic has, of course, been an ease of use for the development teams. The resources that stream into Johanna’s team and also my team has had really short wind up period.

It’s rather easy to use. We have been using both public and premium Snap packs.

We have a large implementation of SAP S4HANA and also Databricks, something that we started with recently actually. And it’s been going quite well, I must argue.

Our platform today is cloud based. So we have a cluster of four nodes in production.

We have a pre cluster or preproduction cluster of four nodes as well. Test cluster two nodes and then, of course, the development environment one node.

So that’s what we use to, I should say, facilitate SnapLogic today. From my perspective then as a platform lead for SnapLogic, we have never had any downtime.

It’s 100% ever. The ease of maintenance has been fantastic because we can actually upgrade one node after another and let it rejoin the cluster and then we’re good.

And of course, our relation with SnapLogic has been good as well both from a commercial perspective, but also support because we also run into bugs and we notice behaviors that we don’t recognize, but we work that out. There are also hiccups that happens now and then.

Finally, lessons learned. CAO, CDO support.

I started to shake the management tree, I think, in February. The January 23 year, Benny Svensson, our CEO within Intra Kia took the analysis decision to remove IDRS as a platform.

That’s record time to amass all IKEA to come to final conclusion decision that we’re going to actually terminate a platform. But we have to.

I have a couple of operators. I think they’re 62 and 63 years old.

They’ve been around since the introduction of IDRS 1989. And please, you don’t let the people retire sometime.

So I have to move those integrations somewhere else. So I will give them a worthy goodbye and hopefully, will it be done by then.

So CAOCDO support is essential because otherwise we won’t get anywhere. Enterprise architecture roadmaps are equally important on a strategic and tactical level.

And of course, I discussed before, untangling the spaghettiness, it takes a lot of time. Don’t underestimate the complexity.

Start early, start small and slice the elephant. And that’s all for me.

Thank you. I think there time for questions.

Any questions? Sorry.

Sir? So as you said, the full node production environment is a big organization. What is the transaction throughput? How much transaction per second you are processing?

Right now? Yes. The last time I checked in Insight, I think it’s 4%, 5%, 4%, 5% low right now.

4%, 5%? Yes. So we have oversized because we’re building for the future.

And the reason behind that is that when we did the sizing, we could not estimate upfront what the order flow program would mean for us. We had indications of 8,000,000 to 20,000,000 records coming our way, so we sized for that.

And we’ve been passing that test with fine colors.

32,000 integration you said?

No, that’s for IDRS. We have less integrations on SnapLogic.

So our SnapLogic journey started about three point five years ago. So I think altogether we have two fifty ish snaps right now, both on APIs and then regular snaps.

But we’re getting there. Any more questions? The lady in the back.

Pardon me.

Hey, John. Hey, hey.

Hey. I’m equally I’m also Swedish as you.

I know. I heard it on your accent.

I heard I sounded Irish earlier. Irish? I’m glad you’re hearing Those tender picky ears.

I was just curious because maybe being a fellow Swede and also having worked with AKA in in the past in a previous role, and a huge organization. Right? Yes.

As you’re going about this, and I wanted to say that you are end of life in the internal application 2028. Is that right?

Yes.

So I mean Sweden being a fairly consensus-driven culture, and I think in a large organization that’s always a challenge as well in terms of decision-making. How are you going about prioritizing the type of work and sort of getting their time?

That ties into the work with the CEO, CTO and architects. For me, it’s been a yearning for a year, explaining people that we need to move to something else, People are getting retired.

I cannot guarantee that’s the one levels in one year. Listen, and eventually people will listen.

But it’s been a longer journey in Scandinavia with the consensus method that as you have indicated. Also from a business perspective, what’s what’s your motivation to move away from IDRS? It’s been working for forty years.

Why break a winning combination? You’ll be able to consume a data of cheap for forty years. And now you’re telling me to move something else.

Why? So that dialogue has to be going or be set up as well with retail and, how should I say, range and supply in the different domains, also income. So it’s been a challenge for us, all of us, but we have overcome that part.

So I’m really proud that we couldn’t get the oil tanker to shift course rather quickly and it took us a year, but the decision has been reached. So right now as we speak analysis is being conducted and designs are actually coming up as well.

So that’s very positive. Any more questions?

Sir? Just kind of follow on. So how did you convince them to change the course of the oil tanker and make an investment?

I would say how should I put this? I think you have to use my hard skills a little bit and explain that 07/01/2021, that’s it. I cannot go further.

So I have to be concise and I have to be determined and have the backing of management as well to set an end-of-life and end-of-support date. There was no other way.

And there’s no way we can you know move around that because people are getting retired. So we’re in the same situation as other companies that has legacy landscapes unfortunately.

So we have to move away and I think that it takes time to convince people, but on the other hand what is then the chance of something happening in the future and how do you rectify that if you don’t have the personnel to resolve the issues? Who knows the core of IDRS in five years? I don’t know. Yeah, exactly.

So this was a relatively easier, how should I say, situation to create some support absolutely. But it’s been a long journey for sure to get that big oil tanker shift course anyways, but it’s been done. It’s been done.