circle-apr-3

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OUR PATH FORWARD

INTERVIEW
01

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Line M. Aarnes “ LOCATION // OSLO

SVP Sales & TENURE // 2013 - PRESENT
Marketing
Head of Sales and Marketing Europe and
“ We must create responsible for approximately 70 employees
a movement across Europe. In addition to leading 3 networks
supporting our with business units representatives, and support
unified global brand. the newly established Global Convenience team
with Customer Insight and Marketing.
CSuusctcoemsser
3

CHALLENGES • High focus on cost reduction has resulted in incremental development
and optimisation of processes for the past years. The organisation has
Q. What are some of the main challenges facing no training and cadence in driving innovation
Circle K at the moment?
• Chalenge ballancing current and future busienss. Circle K is almost
• Fuel volumes are declining - fuel is one of the main reasons for at the top of the “1st S-curce”. How to frictionless jump to the “2nd
customers to visit a Circle K station. Profit on electricity does nto seem S-curve”? ...will probably require organisational change and a dedicated
to be able to replace fuel margins team for innovation supporting the “2nd S-curve”

• Limited cross-sales execution: only 20% of the visits results in both fuel Line did a drawing about the EMEA organisation showing where Sales & Marketing
and convenience transactions. Circle K Europe has 1 million visit per day. (S&M) fits in.
40% only fuel and 40% only buy convenience products

• Circle K stations are more or less the same, and do not harvest the local
opportunities good enough (e.g.: High Way, Urban, City, local food and
products)

• Limited execution on bridging “digital” and “brick and mortar” assets
and business (ex.: mobile payment, pre-pay, pay-as-you-go, pre-order,
pre-booking carwash etc.)

• Almost no synergies or alignment between B2B and B2C customers.
B2B are highly loyal and count for 50% of fuel business and 40% of the
convenience business

4

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THE INTERVIEW expensive on Sports items compared to local chains. When they win, they
win on convenience.
Q1. Which companies do you see as role models
/ inspirational for your area? GENERAL RETAIL

WITHIN CONVENIENCE Tesco: Grocery business is leading on processes and optimization, but their
Pret A Manger: Great Concept with nice look and feel, Signals quality, concept (customer experience) is lacking behind. Tesco has done some
Products are presented well, and good Customer Service experience. interesting implementation of starting with Big shop concepts, expanding
Lagkagehuset: Great presentation of the concept (look & feel), plus quality into small shop concepts, but they are lacking on customer experience.
Wawa Inc (competitor in US): Convenience store, Food Market & Fuel
Sheetz (competitor in US): Convenience Store & Fuel Chain, are leading in Q2. How do you see Circle K in the future?
this area .
7-eleven: Not seen as a leader, but more as on pair with Circle K In Norway 40% of all new cars sold are electric or hybrid. We see a
decrease in fuel sale in Oslo and other areas with high road tax (due to state
DIGITAL EXAMPLE subsidiaries to electric cars). We are following and analyzing how this will
Amazon: Aways in front with news and exciting solution. influence our fuel sales in the future.
While we discuss how to solve queuing up issues in the store, and think self-
check-out, mobile-pay etc, Amazon remove the issues with concepts like Why are customers across EMEA visiting Circle K stations:
GO and KEY.
That said Amazon is not seen as a treat as such in Norway due to expensive • 4 out of 10: Fuel
prices and transport cost. Recent analyses showed Amazon 20% more • 4 out of 10: Convenience
• 1-2 out of 10: Fuel + Convenience
6
Profit on power-charging stations is not expected to be able to replace
profit made on fuel sales, due to lower potential margin.

Line’s team it currently working a number of value adding innovation
projects, that they aim for piloting in 2018:

• Food-trucks
• Convenience without fuel options (kiosks)
• Food Home Delivery
• Delivery hub (e.g. pick up station)
• Initiatives outside the networks, like Car Sharing

Q3. What are the biggest hurdles for not doing Need better alignment between B2B & B2C customers.
these future concepts already? All B2B customers are also B2C prospects and many are already B2C
customers
Primarily our new owners have been very focussed on cost (Alimentation B2B contract customers are a very important and stabile customer group.
Couche-Tard Inc acquired CKE from Statoil in 2012). Our focus on cost has They count for approximately 50% of the fuel revenue and approximately
lead to incremental development and optimisation of processes and thus 40% of the convenience revenue.
left little or no capacity for innovation.
Q4. What is the risk related to executing the
We have optimized as much we can, and the only way to a higher revenue is transformation ideas?
innovation.
We have a challenge on how to balance current & future business resource
Today all Circle K stations are more or less the same (that is the concept), as well as businesswise.
but the geographical position of each station create different opportunities
and this should be leveraged better in future, to make the convenience part Today both current and future are handled by same resouces. This
of Circle K more than a “snacking”-station: introduces a high risk of wearing down people and the organisation.
Change in organisation might be needed: Circle K needs a dedicated team
• High Way stations (think of the needs of the truck drivers, the families in charge of running the innovation related to transforming the business,
driving across europe for their vacation etc. ...maybe they need a place while the existing innovation within S&M should continue to focus on
to relax, get a bath, proper food etc.) innovating on current business concepts, products pricing etc.

• Urban Main Road stations (The families on their way to and from visiting Jacob Schram’s two S-curves - Line find CKE are on the peak of the current S-curve
friends and family or on their way to their summer house (or hytte :-). and at best case the curve flattens out.
They will need a sandwich, snacks, cup of coffee, fuel etc.)
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• City Station (might not have fuel at all, but offer a place to relax and
work, like Starbucks, Espresso house etc.)

Circle K need to better couple the digital and “brick and mortar” business,
by aligning the digital customer experience with the experience you get
physically in the stations. Examples could be:

• Possibility for mobile payment
• Pre booking of carwash
• Pre-paid or “pay as you go” on mobile device for carwash
• Pre-order for pick up

INTERVIEW
02

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“Steffen Rønningen LOCATION // OSLO
TENURE // 2016 - PRESENT
VP Global
Logistics Responsible for establishing and leading the
new global logistics department that will include
“ We must create Distribution, Terminal, HSE & Environment
a movement Shared Service teams, for Circle K / Couche-Tard
supporting our globally.
unified global brand.
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CHALLENGES processes are based on custom or heavily customised solutions - need
to move to more standardised and modernised solutions.
Q. What are some of the main challenges facing • We need to look for opportunities to optimise ans scale our delivery
Circle K at the moment? network - maybe inspired by an Uber-like model.
• Global change process will be challenging due to culture outside
• Innovation is still happening highly silo’ed in the organisation. Sales Europe, where top-management sometimes goes very deep in
innovate with the eyes of sales, service with the eyes of service, fuel controlling inititives.
logistics purely with the eyes of logistics etc.
Steffen showed his org chart. His organisation is one of the Global units, embracing not
• Access to free capital is a limiting factor for innovation. only EMEA but the whole group WW.
• Difficult to balance investment in improving performance of current

business vs. innovating for tomorrow. Seems to be more complicated to
find business resources with industry insight and deep understanding of
Circle K than IT resources for innovation.
• IT landscape is preventing high speed of innovation, due to large
portefolio of highly customised legacy systems build on old technology
(some even still on Cobol).
• Circle K still runs on two main ERP systems, without proper integration.
• It will probably take 10 years to fully modernise the backend
infrastructure at Circle K, incl. stations with POS systems etc.
• Not prepared for scaling and agile innovation - too many of the core

10

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Profit per unit on fuel sold in Europe is higher than fuel sold in US.

THE INTERVIEW

Q1. Please tell us more about the The following drawing is inspired by a whiteboard drawing that Steffen did at the
responsibilities of Fuel Logistics meeting.

Procurement of fuel from refineries and oil companies like Statoil etc. Q2. Please tell us about how you see the
challenges at Circle K when it comes to
Refined oil products are delivered to terminals close to shore (An oil depot Distribution
sometimes called a tank farm, installation or oil terminal).
DISTRIBUTION IN EUROPE IS HANDLED BY FLEET MANAGERS AT CIRCLE
Circle K own and manage 15 oil terminals. The number has been declining. K:
Previously they had up to 30 terminals.

115 employees manage the oil terminals, the terminals are categorized as:

• Strategic
• Primary
• Secondary & Marine

Physical logistic handling from terminals to Circle K station and B2B
customer (industri customer etc).

• 2,754 stations in Europe
• 8,077 stations in US/Canada
• NA vs Europe: 3 x stations, 4 x volume sold (e.g. more volume per

station in NA)

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Circle K do not own the trucks nor the drivers. • Part of the complexity in working with TLG in a smart way is to be
The fleet is outsourced and put together through partnerships with large able to compensate for fluid density temperature dependencies. Ex:
and small fleet owners. Some work dedicated for Circle K and some do land A customer or station orders 1000 liter fuel and therefore you pick up
oil transport for multiple brands. 1000 liter at a terminal to a cost of 10 NOK. Temperature is different
at the station or customer site when you deliver it, and hence density
Fleet Managers at Circle K do route planning for Tank-Trucks from the changes, so that the 1000 liter is now taking up the space of 990 liters.
terminals to the stations and to the B2B customers (e.g.: construction sites, The consequence is now that you have lost 10 liters to a cost of 10 NOK,
companies with big fleets and the need for on-locaiton fuelling). and you have missed a potential sales of another 10 liters of fuel to a
sales price of 15 NOK, because you did not bring enough fuel.
Overall processes is very much paper-driven, especially the Health, Safety,
Security and Environment processes (HSSE). • In Europe, orders are primarily handled by Riga .

THE SERVICE CENTER FOR SERVICING CUSTOMERS (B2B) AND STATIONS 80-90% of volume is recurring business with standard deliveries.
HAVE BEN PRIMARILY CENTRALISED IN RIGA FOR EUROPE, BUT WITH
OTHER TEAMS IN VARIOUS REGIONS FOR GLOBAL SUPPORT: MOVING IT INVESTMENTS HAVE NOT PREPARED CIRCLE K FUEL LOGISTICS FOR
INTO SERVICE CENTERS WAS DONE TO: THE FUTURE:
Investments primarily in ERP (migrated from SAP to JDE ERP).
Move from high-cost area to low-cost areas.
JDE is a very “heavy” implementation, embracing everything from
Optimise and streamline processes. Accounting to FMS (Fuel Management System).

Circle K are discussing with Wipro Ltd about a potential move of services to Acquired companies are not fully merged into one Circle K IT platform,
India. adding resource needs for integrations or to IT migration.

Organized as global team recently and cross team collaboration is not US and Europe still run each their major platform.
strong.
Invested early on in development of IT innovation, like navigation systems to
Customer orders received on multichannels: truck, but have been outpaced by the general market innovation, and now
struggle to keep up.
• Tlf
• mail Q3. What opportunities do you see for
• fax Distribution by increased digitalisation?
• online
• TLG (Tank Level Gauging) - IoT data from fluid level sensors in tanks CUSTOMER SERVICE/ SERVICE CENTERS:

(terminals, trucks and at sites). 13

“One request funnel”: Definitely an increased customer experience in What if the truck drivers could just login to an app in the morning and get
our service centers if we could have one place to service all the channels their route for today. Maybe even everyone with the proper certificates,
mentioned earlier. approvals and vehicles could sign up as a driver. The platform and app
should manage:
Cross team collaboration: would help to optimise our processes and work as
a global team. • chauffeur onboarding.
• certificates.
24x7: Improved collaboration and global processes would allow for • signing-in for the day.
implementing “follow-the-sun” services to deliver on 24x7 and speed of • route plannnig.
solving issues and requests: • dispatching.
• feedback and support.
• Better utilization of distribution - it is a 24/7 business.
• More efficient to deliver during night hours. Long term vision: Connected automated autonomous truck with centralized
updated cockpit on where the fleet is, what is carried and where it is going.
Paperless processes: I would like all our processes to become paperless -
this will allow for increase process optimisation and insights analysis. Fully digital and fully automated planning of distribution:

CUSTOMER EXPERIENCE: • Auto reporting
Today we compete primarily on price, in the future we will compete on • Track & Trace
convenience: “order - deliver - pay”. • Customer & Drive Apps

Customer ordering to cumbersome: PRODUCTS AND SERVICES:

• Simplified ordering. Potential alternative use of the Terminals in the future:
• On line .
• Mobile pay. • Chemical products or the like
• Credit Card payment online.
• Full automation via a subscription model could be attractive, but believe Basically its going to be important to automate and optimise the end-to-
end from front end customer experience front end to the transactional and
there are too many parametres involved. logistics back-end systems.
• All information to customers handled via an App.
The organisation probably will have to prepare for adjusting down to 50% of
LOGISTICS/ DISTRIBUTION: it’s size of today and far more automation.
I see a future where we have a paperless cockpit in the trucks. Maybe even a
model similar to Uber, but for Fuel transportation.

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INTERVIEW
03

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Christian Rykke “ LOCATION // OSLO

CFO Europe TENURE // 2013 - PRESENT
Operations
Christian describes himself as a ”modern
“ We must create CFO”, demanding that his direct reports and
a movement controllers deliver accounting and work towards
supporting our streamlining the processes related to producing
unified global brand. monthly/quarterly and yearly accounting
updates.

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CHALLENGES processes are based on custom or heavily customised solutions - need
to move to more standardised and modernised solutions.
Q. What are some of the main challenges facing
Circle K at the moment? • We need to look for opportunities to optimise ans scale our delivery
network - maybe inspired by an Uber-like model.
• Innovation is still happening highly silo’ed in the organisation. Sales
innovate with the eyes of sales, service with the eyes of service, fuel • Global change process will be challenging due to culture outside
logistics purely with the eyes of logistics etc. Europe, where top-management sometimes goes very deep in
controlling inititives.
• Access to free capital is a limiting factor for innovation.
• Difficult to balance investment in improving performance of current

business vs. innovating for tomorrow. Seems to be more complicated to
find business resources with industry insight and deep understanding of
Circle K than IT resources for innovation.
• IT landscape is preventing high speed of innovation, due to large
portefolio of highly customised legacy systems build on old technology
(some even still on Cobol).
• Circle K still runs on two main ERP systems, without proper integration.
• It will probably take 10 years to fully modernise the backend
infrastructure at Circle K, incl. stations with POS systems etc.
• Not prepared for scaling and agile innovation - too many of the core

18

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THE INTERVIEW departments: Sales innovate purely with the Sales point of view. Fuel
Logistics purely innovate with the logistics point of view, etc.
Q1. First of tell us a bit about your role and how
your department is working together with other One of the limitations impacting the ability to drive innovation is access to
departments at Circle K. free capital. The challenge is:

Christian describes himself as a ”modern CFO”, demanding that his direct • how to prioritize where to invest capital.
reports and controllers deliver accounting and work towards streamlining • execute and improve performance of current business.
the processes related to producing monthly/quarterly and yearly accounting • invest in innovation for the future.
updates. This frees up time for developing the Circle K business, analyze • find business resources are more scarce than the IT resources. It’s
and create insight, growth and added value.
easier to backfill IT-developers, than business development people with
Focus on supporting the individulal project, the strategy and at the same industry insight and deep knowledge into the business of Circle K.
time secure cross division alignment between all divisions. E.g. a large
customer like PostNord decide to buy a fleet of electric-cars and wish only Q2. How do you see the limitations from an IT
to use one energy vendor for all kinds of fuel and electricity. investment perspective?

Responsible for Lean and has introduced the Lean Station, to keep lowering From an IT-landscape perspective, Circle K is limited by a large portefolio of
cost freeing up capital for investment in the future of the company.. legacy systems, that have been highly customised and are challenging and
costly to replace. Some even developed in Cobol.
Responsible for M&A in EMEA and has a dotted line to Group CEO, with
respect to M&A and special projects in EMEA, in addition to a report-line to Today, 6 years after the acquisition of Circle K, they are still running 2
Jacob Schram (President EMEA) backend ERP systems that have not been integrated properly.

Current state of innovation in the company is still highly silo’ed into the When thinking on what Amazon would do if they would acquire Circle K,
they would probably do what they also did for Whole Food ...I’m sure they
20 just replaced all the backend with their own, use Big Data, Analytics and AI,
injecting a new customer experience, like you are used to with Amazon.

Christian estimates it will take up to 10 years before they have fully
modernized their backend infrastructure, including the stations and their
POS solutions. One of the reasons is that it might be too costly to do it
faster due to lost business if they as an example would do a big bang

replacement of their POS systems and it would introduce down time etc. Need for more standardization and modernization
Staffing to do an instant replacement of POS in +10.000 stations is a
difficult task. Q4. What would be some of the driving
guidelines for the digitalisation laying ahead of
Q3. Please explain to us what scope you are Circle K?
thinking of, when you talk about your legacy
backend. First of all we need to modernise our IT infrastructure and prepare for scale
and agility by renewing the backend-systems. Making it modular, running in
Christian did the following drawing on the board to illustrate the complexity of their the cloud and embrace open source for an improved cost-profile.
ERP backend including POS and their fuel logistics systems.
OPT - Auto payment terminal. We need to convert our assets from steel-assets (tanks, trucks and pipes)
POS - Navision based. to retail and software. With software I mean that we need to have all our
BOS - JDE. processes being highly digitalised and made available through apps and
Lots of integration points. integrations.
Non modular.
All changes requires full system test. The companies winning are the once that are owning the customer
experience.

Q5. Lets talk a bit more about examples of
companies owning that customer experience.

1. Starbucks: They have done great in differentiating with their banking
and loyalty initiatives, convincing customers to pre-pay they products

2. Uber: They have done great thinking different in how they work with
mobile, assets and logisitcs. Driving a new expirience both for their
customer but also their drivers, unlocking capital by decoupling access
to assets and investing in assets

3. Amazon Go: A totally new customer experience in retail

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4. EuroGarage: They are doing something interesting by mowing into • Today our primary assets are steel, brick and mortar, and this need to
Germany, acquiring AxxonMobil’s stations in Germany and running them change to retail and software
according to their branded wholesaler model. Esson will deliver the fuel
and EuroGarage will take on franchises for in-store shop experiences, • Do we really have the right sites / station geographically, to attract the
like SPAR, SubWay etc. right partners

They all started based on a customer journey. • IT will require a much higher degree of digitalisation, to automate
processes and scale.
Q6. Where do you see Circle K having to
change to prepare for the future? Then we need to start looking for opportunities, like:

The Circle K network is today defined by the location of Brick & Mortar (or • New partnerships (mentioned Posten)
stations).
• New opportunities to optimise and scale our delivery network: Uber like
• This is very good for solving last mile challenges, like getting your post, model and autonomous electrical trucks will come one day. How will this
groceries and other types of deliveries on top of what we already to impact the opportunities around the Circle K network?
with fuel and convenience. This offers potential for new partnerships
• New services: maybe Circle K stations can be the parking lot for car
• Circle K network is recognised for having the best locations and size of sharing services
network in EMEA, but for Poland, where the locations are good, but the
network not big enough. This is preventing Circle K Poland from getting • New business models: Some of the products or services delivered by
the right partnerships signed Circle K could be converted into a subscription based service, allowing
for a more predictable revenue forecast, freeing up capital for innovation
• Parking space is typically a limitation, when thinking of moving in investment
power-chargers for electrical cars. It takes longer to charge a car, than
fuelling gas - this means slower flow of vehicles and the need for more • Keep improving and modernising IT - software is an important part of
space ...a potential competitor that has this space is McDonald’s the future of Circle K

But first of all its important to ask ourself if we have the right assets for the A shift from “Fuel Retail” to “Mobile Retail” in some shape or form would
future? require:

22 • A SW Platform

• Creation of customer loyalty

• Own the customer relationship and the transactions legal entities to boost innovation.
Hackathon could be a good idea. Would like to learn from others like
• Win the last mile Danfoss. But would require a clear Roadmap for where we want to go.

Q7. Let’s talk a bit about skills and organisation 23
in context of being ready for driving innovation.

The EMEA top management is very close to business and the organisation is
typically good at working together with management on new initiatives.

We are good at creating cross-divisional taskforce teams for managing
the change. Global change will be much more challenging, because of the
management culture outside EMEA, where top management sometimes
goes too deep into the initiatives instead of trusting that the team that was
given the task also can own the full responsibility for execution.

It will be important to find a way to empower from a “bottom up” point of
view. Embrace employees, team managers, directors, BU owners, VP’s and
all up to CxO level and assign each level their decision power, to prevent
the management chain from becoming a bottleneck in agile innovation and
change.

Concerned about focus and that many of the forward looking people in
the divisions are thinking more about all the “new cool stuff”, rather than
securing continued execution on current business:

• One way to solve this might be to create a dedicated innovation team
within circle K.

• another option is to invest in creating separate legal entities to run new
ideas like a start-up.

Would like to get approval to create small Start-Up companies as separate

INTERVIEW
04

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Nina Christin “ LOCATION // OSLO
Yttervik TENURE // 2016 - PRESENT

Vice President Nina was a SVP of Corporate Human Resources
HR at BW Offshore from 2008 to 2011. She then
moved on to be Organisational Director at
“ We must create Aftenposten from 2011 to 2015. Finally, Nina made
a movement the move to VP of HR here at Circle K Europe.
supporting our
unified global brand. 25

CHALLENGES • Need for improved digitalisation og employee on-boarding, idea
sharing, collaborating in employe communities and improved
Q. What are some of the main challenges facing transparency and insight to reporting on data.
Circle K at the moment?
• Europe almost has become so lean, that we do not have time to listen
• Challenge to find skilled support for all languages needed for internal and help others.
support (Tier 2 in the HR 4-tier model).
• Need to improve our feedback culture, coaching culture, team culture
• Not all employees have a digital presence at Circle K (e.g. email) and interest in solving problems through crowdsourcing.
• HR have records on all Circle K employees and all franchise employees

with a unique ID on people level for Europe, but in NA the ID is on
station level.
• Employees do not have a dedicated device for corporate
communication, training and employee system access. At the stations
it’s typically a shared computer.
• Global projects still need local funding - this sometimes complicates the
project approval process managed via “Project Arena”, and initiative put
in place to prioritice investments.
• Limited personalised employee dialog. Should be in context and more
personalised. We should know our employees better and service them
in context of their journey at Circle K.

26

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THE INTERVIEW Case handling system called HEAT:
• One-stop-shopping” for support across IT, HR, etc.
Q1. Nina, please tell us about the HR Delivery • Registration and handling of cases.
model at Circle K. • 27 support people to support employees on payroll and transactional

The HR model at Circle K is a 4-tier model. This is a result of the Circle K people cycle requests.
matrix organisation. HR reports into Global CHRO in US, since may 2017.
The role also covers Facility Management. Spans 9 Countries in EMEA. Close collaboration with Business Process Owners:
• Primary contact to Zalaris (Payrole)
Q2. Please elaborate a bit more on your 4 Tiers.
HQ lifecycle support.
TIER-1 Insource from all countries for alignment of processes and systems.
Self Service: Challenges with languages.
• Systems: Zalaris (payroll), SuccessFactors (does not work in The Baltics)
TIER-3
and Time Grap.
• Access to portal via Zalaris. Business Partners in the countries:
Shared service in Riga support and administer the systems: • Supporting Managers with tasks like hiring, on-boarding & training
• Leader in Riga report to Nina. • Reports to country managers and dotted line to Nina, who set-up goals,
• Support delivered by 3 people.
• Support covers: systems, LMS and HR Case Management. guidelines and KPI’s
TIER-2 • 2-4 Business Partners per country - one per country is perceived as the

28 HR Director for the specific Business Unit (e.g. Country)
• Focus is running the business:

• hiering
• training (process training, regulatory training specifically per

country)
• HR activities

TIER-4

HR Center of Expertise.
System development and process innovaiton.

Q3. Let’s talk a bit about your core HR system
and how you manage and train your employees.

EMPLOYEE ID AND HR SYSTEMS: In Gartner IT model US is at level 1 - EMEA is at level 2.
All employees as well as all franchises employees are in the HR systems. EMEA HR team run global projects.
When it comes to digital identity, not all employees have an email. • like analyses and center-of-expertise etc.
Few categories are anchored in US - like coffee.
In EMEA all employees have a unique ID, but in US the ID is only on station/
shop level. Employees have access to their data and online training (LMS) Q5. How do you decide on what HR projects to
from a shared computer (or station manager’s computer) at the station by run?
logging into a portal via Zalaris.
Circle K have an ongoing initiative across all departments for prioritising
Via Zalaris, employees and Franchise employees can get access to investments: Project ARENA. Any new project needing funding (OPEX or
SuccessFactors for recruiting, on-boarding and training. CAPEX) has to be presented and approved by Project ARENA.
Even though processes are global, funding is still local (this complicates it
SuccessFactors to be replaced by Workday (initial roll-out in US and then a bit). Europe is a more mature entity compared to North America - this
EMEA in 2019-20). impacts priorities, because Europe is delivering good results.

TYPES OF TRAINING: NINA HAS INITIATED A NEW PROJECT: “WORKPLACE”, WHICH NEEDS
• “License to operate” training. TO GO THROUGH THIS PROJECT ARENA PROCESS FOR APPROVAL
• Local legislation training for e.g. food handling, fuel handling. The project is about how Circle K can use their offices better. It requires the
• Circle K defined training (Business excellence, product training etc.). development of a full business case.
• Running training for 100 managers per year - 3 modules.
GLOBAL ENGAGE PROJECT:
Q4. Are the US and EMEA organisations Employee survey (all 120.000 employees). Nina’s team typically delivers the
different form a HR perspective? global project management to this kind fo project.

Circle K EMEA is in general a more modern organisation than Circle K US. 29

US is more or less decentralized with very few centralized functions.
• US management is in general more process oriented.
• Lack of strategic competencies - Is though starting to change.

NINA HAS A HR ANALYTIC TEAM THAT IS LOOKING AT ANALYSING HR Q6. Who do you think are doing good in HR?
DATA:
• McDonald’s: Really good at on-boarding and career development.
This is not typically done in the industry. Main analytics team based in Riga. • TomTom (navigation): strong at digitalisation.

Data sources: Companies utilizing big data
• Workday (SuccessFactors)
• Master Data • Predicting things like turn-over.
• Sales Data • Pro-active.
• Surveys
(Idea from Salesforce: Talk to our own HR department / Many of the role-
Types of analysis the team is doing: model companies are our customers / GDPR)
• Engagement
• Sales Nina confirmed that GDPR is a challenge at Circle K, and something they are
• Satisfaction working on getting ready for.
• Employee churn - what drives it up or down?
Q7. What thoughts do you have about how
Part-time (allows for being dynamic) vs Full-time (adds stability). What is technology can help transform the future HR at
the most optimal ratio between Part-time and Full-time to create the right Circle K?
balance and dynamic.
Is interested in robotics for process automation. Expects this to cover great
Turn-over is expensive back-filling, and on-boarding, but also has a direct potential by automating processes like:
negative effect on traffic level in the shop, basket size, customer satisfaction
etc. • Clearing of bank account transactions
• Salary payment
45% yearly turnover in employees in EMEA (must be lowered) ...differs from • Auditing of absence
country to country. Turn-over in US is 109% and in some areas up to 180% • and other transactional clearing processes
per year.
The benefit of automation is to free up time for innovation, more
Analyses show that salary in the level of 70% of the average salary in the complicated activities or engaging with employees.
country does not amplify turn-over. In that case other elements drive the
turn-over, like lack of engagement, management etc. HR are in search of the
precise salary level in each country.

It would be very interesting to be able to predict future turnover.

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People prefer to talk to people rather than reading long descriptions and
guidelines found in various corporate policy books and knowledge articles.
What if...

• Circle K would have a SIRI like HR robot, trained by reading through all
policy books and knowledge article at Circle K?

• Self service would be done by talking to the system and getting
answers spoken back to you

• Nina suggest this to lead to large scale savings

Nina would like a generally more digital supported everyday for all Circle
K employees, with less directing/management and more dialog. There is a
need for improved collaboration between colleagues at Circle K. But also
with customers.

Ongoing personalized dialog in context is important (e.g. career planning, IT
support, travel policy, food category, fuel category, station employees, etc.).

• It starts with profile based on-boarding and training
• Need for transparency and solid insights/ reporting
• Higher degree of digitalisation supported by a community for employee.

Engagement, idea sharing and development

Not there today partly due to lack of systems and partly due to culture -
Europe, almost has become so lean, that we do not have time to listen to &
help others.

New generation with more skills and use to digital collaboration will support
change:

• Create feedback culture
• Coaching
• Crowdsourcing (internal between employees)
• Team culture ...How can I help create a better experience for all?

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INTERVIEW
05

+

Lars Gaustad “ LOCATION // OSLO

SVP B2B/Card TENURE // 2010 - PRESENT
Sale
Experienced executive leader with a
“ We must create demonstrated ability to drive business
a movement transformation and deliver sustainable
supporting our exceptional results in a multicultural, high-paced
unified global brand. environment.

Skilled in Business Strategy, Sales, Supply Chain,
Lean, Market strategy, Digital Transformation,
Mobility and Energy.

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CHALLENGES • Complicated to create one customer view with B2B and B2C being
separated
Q. What are some of the main challenges facing
Circle K at the moment? • Inside out view when developing services: heavy focus on developing
categories, less focus on the customer and his/her journey. Any
• Circle K offer too few self service solutions to B2B discount offered to B2B hits the Category owner on the bottom-line
• It’s still to complex to become a Circle K customer and being a
• New competitors appearing. In addition to industry players like Shell
customer ...we definitely are lacking mobile pay options and Esso, ti’s relevant to keep an eye on: Payment Providers (owing the
• B2B + convenience is a compelling differentiator, but we do not transaction), Leasing Companies (first point of contact with prospects),
Utility companies (from fuel to electricity), Telematics players like
leverage this to its full potential ...even car wash is not positioned well as Google and Apple offering payment and control mechanisms (going for
a value proposition the data, to earn the market)
• Need to improve on creating complete offerings to B2B customers -
would like to see convenience, food to go and food delivery included for Lars went through his org chart and showed some of the thoughts for the future of
B2B BCS.
• B2B loyalty program being piloted, but value proposition seems not
to be compelling. B2B buyers want lower costs, not benefits to their
employees
• Silo’ed development and execution (loyalt program focus on B2C and
is country specific, while the B2B card system is cross country and not
connected to loyalty)

34

+

THE INTERVIEW • Define and implement Circle K Europe strategy on payment
• Functional responsibility
Q1. Lars went through the organisation • Evaluation of future next platform
structure.
CARD AND PAYMENT OPERATIONS - LEAD BY DERRY CREAN
SALES OPERATIONAL EXCELLENCE - LEAD BY MICHAEL LINDBÄCK • Optimize payment and card operation
• Customer Service • Operate Transaction platform
• Training / Process Optimisation
Q2. Please tell us about how you work together
BUSINESS DEVELOPMENT - LEAD BY MIKAEL RING with the other teams at Circle K?
• M&A
• eMobility B2B have a tight collaboration with IT, Marketing and Category Fuel.
• Connected Cars
• Future development Almost everything requires IT. Reno works together with marketing in Line’s
team. He develops the messaging, while Line’s team executes. Derry works
COMMERCIAL DEVELOPMENT & INTERNATIONAL SALES - LEAD BY RENO closely together with IT as part of operating the card and payment systems.
P. ØHLENSCHLÆGER BCS partly owns Salesforce and Telephony.
• TCO model
• B2B strategy Most of the digitalisation effort is expected to be in the payment and
• Marketing value proposition customer facing components.

CARD & PAYMENT DEVELOPMENT - LEAD BY HÅKON ZIA SKÅNHAUG All sales reps report into the two P&L functions owned by Jørn Madsen and
• Payment & ICC development Hans-Olav Høidahl:

36 The P&L owners sets the targets, supported by input from BCS.

Q3. Let’s talk about your thoughts about the
future of B2B sales at Circle K.

Lars showed the following graphics to explain how he sees Mobility and Digitalisation buying kilometers
to be front and center of the future development of the B2B business at Circle K • Leasing will be a stepping stone in that journey
• Partnering with a leasing company
Today we are selling fuel, in the future we might sell mobility services. • Circle K might become a leasing company - who knows?
The impact is that mobility will drive new products and business models and
digitalisation will change how we sell and engage with our customers. Telematics ...connected cars
• Transaction sales/ Subscription sales • Connected cars will start to offer more added services
• Field Sales visits/ Inside Sales / Digital self-service/ Partner Sales • Large fleets already have this
• Small fleets finds it too costly and complex -byt as a service it might
Q4. Please elaborate on what you mean by
selling Mobility Services? become easier and less costly

MOBILITY SERVICES: DIGITISATION:
Owning a car = MaaS (Miles as a Service): More self service opportunities:
• We are moving towards not buying your own car, but pay-as-you-go • Expect to develop far more self-service solution in the future
• Mobile pay etc
Easy:
• It must become easier to to become a customer at Circle K

Q5. Who do you see as the main competitors
within B2B?

1. Industry Players: Shell & Esso
2. Payment Providers (owning the commercial transactions)
3. Leasing companies
4. Utility companies due to the change from fuel to electricity
5. Telematics players: Google & Apple offering payment and other control

mechanisms

37

Q6. What short term opportunities and • B2B byers (purchase directors etc.) want lower costs, not benefits to
obstacles do you face? their employees (drivers)

B2B + convenience is a unique combination and a strong selling point, that
we do not leverage to the fullest:

• Improve on offering Complete solutions to B2B customers
• Even Carwash is not well positioned as a value proposition when selling

to B2B
• Like to see Convenience / Food to go / Food delivery and the like

included in B2B

Some of the obstacles we face are:

Siloed development and execution:
• Loyalty programs is owned by Sales-& Marketing (Line) and is only B2C

focussed
• B2C loyalty is country focused and not strong on cross country models
• Lars only focus on B2B Card Systems (cross country)

Organisational: B2C & B2B are separated.

Category focus within the company - too little customer focus.
• Any discount offered to B2B customer hit the Category owner on the

bottom-line

Mikael Ring is working on a B2B Loyalty program: B2B Extra:

• Being pilotted in DK
• Offering privat benefits to B2B customers
• Comparable to Frequent Flyer Programs (flyer miles)
• So far not a big success - probably due to too weak value proposition

38

+

INTERVIEW
06

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“Audhild Andersen LOCATION // OSLO
Randa
TENURE // 2013 - PRESENT
VP, IT
More than 9 years of experience from retail and
“ We must create management consulting. Mainly worked with
a movement IT, sales and marketing topics. Both operations
supporting our and project experience; I have led multiple
unified global brand. improvement projects, using customer insight,
analytics and best practices to increase revenue.

41

CHALLENGES • Challenge to find the right talent and skills: JAVA is ok, AWS and JDE is
difficult and Circle K need more people skilled in accelerated innovation
Q. What are some of the main challenges facing and agile dev. ops approaches
Circle K at the moment?
• Circle K is far behind on employee apps - especially when it comes to
• IT reorganisations have put a pause to some of the large projects, connecting the station employees. Improved station employee apps
like replacing the current out dated POS solution at the stations. 5-6 would likely impact customer experience
vendors have been short listed, the pilot will take 1-2 years and the
complete roll-out is expected to be completed in 3-4 years • Customer facing innovation should have higher pace than backend
innovation (currently 5-10 years)
• Current card system is a heavy monolith with too many integrated
components that are difficult to decouple (transaction processes,
loyalty processes and front end payment processes)

• Need to find cost reduction opportunities for cost of operating a
station. cost per station in 2017: 12.500 USD and target for 2018 is 11.500
USD

• Business is not always agile in mind-set, e.g. projects are controlled by
a set list of capabilies that needs to be delivered within a certain date,
instead of defining a vision and working towards the vision with the aim
of “getting it out” fast and then “fix” the issues most relevant

• Infrastructure projects can take up to 12 months to get in place and then
it’s only 2-5 months to deliver customer facing apps and services on top

42

+

THE INTERVIEW 4 Security Experts
• Would be interested in GDPR
Q1. Please start by tellung us about how you are
organised in IT at Circle K. 02 - INFRASTRUCTURE SERVICES

IT is one of the few global functions at Circle K, and we are bout 500 people 03 -SUPPORT SERVICE MANAGEMENT
in IT globally.
• EMEA: 247 employees System: Heat, IT Service Management and internal Case system (responsible
• NA: approx. 250 employees for both system and processes).
There are 7 units in the EMEA IT Organisation: • 1st line in Riga
• 3 teams supporting the core services • 2nd line at HQ (in Norway)
• 3 app teams • Most tickets are generated for:
• IT procurement
• Pumps and POS
01 - STRATEGY AND ARCHITECTURE • Payment Terminals
5 Enterprise Architects
• Solution architects and infrastructure architects are placed in each their 04 - FINANCE & ERP

business unit (e.g. country) JDE Team - ERP - Finance (Kari Øien, IT Director, ERP and HR)
• 27 employees in the JDE team
44
JDE replaced SAP
• Fuel expertise embedded
• Heavy system to maintain
• Temperature dependent capabilities build-in
• Recording of who we sell to
• Direct / Indirect / Terminals
• Interfaces to other systems

JDE selected as ERP system at a time when the organization had more
differentiated business lines. Not same demands today. Complex handling
of fuel volumes (fuel volumes are temperature dependent).

System support partly outsourced to Oracle JDE partner www.redfaire.com .

05 - FUEL SITES & WORKPLACE 07 - IT PROCUREMENT

60 employees responsible for: IT procurement has 5 employees.
• Site systems at fuel stations
Q2. What are your thoughts when it comes to
• approx. 95% standard systems strategy and architecture?
• Station Accounting & infrastructure (Hardware and software)
• Space/ Floor planning Global IT is being reorganised, and this has a short term impact on some
• Meeting rooms of the large projects that have been put on hold, like replacing the old POS
• POS platform.

• Current POS replacement system on hold due to IT reorganisation Global IT alignment will include Architecture, Infrastructure and
• Have shortlisted 5-6 potential vendors Procurement.
• Pilot will take 1-2 years
• Complete roll-out will take 3-4 years IT is a big advocate for building re-usable common components rather than
implementing heavy monolithic systems.
06 - RETAIL CARDS & LOYALTY (+BI)
• Gartners Pace Layer Model: Too many of the old systems at Circle K
Kari owns the standard systems, while Karin owns Master Data + embrace multiple layers, which makes it difficult to manage, modernice
Development. and replace

Card system: VM Card +25 years old with too many integrated components • WM-Card is in the process of being decoupled and replaced with
that are difficult to decouple. It’s a PCI-environment that manages three multiple components instead fo having financial transactions, identity,
things: loyalt etc. bundled into one system
• Transaction process (switching, authorisation, loyalty)
• Frontend Payment Processes • Overall strategy of gradually build/develop out of the old legacy
• Loyalty process (new portal & app has been moved out) systems

Planning for implementing new card system & Loyalty program: Extra Club Common Components
• Azure
Development: • AWS: app development in Java
• Apps • Circle K customer ID - identification
• Portals
• Mobile payment API’s architecture development for
• Business Intellegence • ERP
• POS

45

• Pumps / Washing Machines / handling of payments Q4. How does succesfull IT innovation projects
• Integrating data for systems like Site Info Manager look like to you?

Q3. Let’s talk about how you drive innovation in Innovation must be incremental and not implemented through BIG-BANG
the IT organisation. projects:

IT owns the budget for operating the sites. Good example: The need to find nearby stations

• Cost per Station 2017: 12.500 USD • There was no good central data source available with quality data about
• Cost goal per Station 2018: 11.500 USD the stations. It was needed to clean up data about the station manually
• Needs to find savings through optimisation and innovaiton
• Instead IT developed an API to expose station data directly from the
Budget for new development and innovation is owned by Finance. station systems and ERP automatically

Governed by Project ARENA. All new OPEX & CAPEX project have to be • This created the foudnation for Site-Ino-Manager as an Info-Hub and
presented and approved in Project ARENA. only took 9 months to implement

Process: Good Example: Circle KID: Unified customer ID

• Wish List • Needed one ID for customers to use across Circle K customer apps
• Pre-Study to define: • 12 months

• Business case, cost and values Good Example: Payments and fuel pump release
• Need of resources from IT & Business incl precise roles with names
• Approval from IT Architecture Board for non-functional • Common component for managing payments and fuel pump releas
• Used for mobile payment
requirement (was EMEA based until recently as a Global Board • Service/ component was integrated into customer facing app
was established) • 4 months for developing API/ core component + time for developing
• Approval
customer app
Project ARENA is perceived to work well - maybe because there is a good
understanding of technology in the Circle K management. Next common component to look at is loyalty.

46 AWS and Java is used to develop common components.

Developers are located in Poland + partners being sourced per project • Large GAP when it comes to Fuel Station employees interaction &
(consultants). support

“Stammina & Patience” ...common component and the customer apps. • Lacking input from employees on how to improve system and processes
• Crowd sourcing could be a good idea
Q5. What challenges do you see for IT at Circle
K to continue innovate for growth? • Station employee apps would impact customer experience
• Customer facing innovation should have higher pace than backend
Business is not always agile in mindset:
innovation (currently 5-10 years timeframe)
Tend to aim for perfect and therefore end up with Big-Bang projects.
Instead they should aim for getting “it” out, and THEN fix it! Maybe a Circle K App Store/ marketplace would be of interest:
• Create a Circle K App Factory
Still executing according to the waterfall model. • Shopify mentioned as a source for inspiration when talking about POS
• Audhild woudl like a POS platform where other stakeholders in the
• Want to launch specific capabilities, instead of aiming for a vision
ecosystem could develop solutions on top of Circle K POS
Limited understanding from Business that core components & infrastructure • A simple way to add own ideas
have to be in place, to secure proper support for a solution. • Open standards are important.
• Infrastructure can be projects of up to 12 months to get in place
• The customer facing part of a project afterwards if typical 2-5 months 47

Challenge to find the right talents and skills:

• Need more resources skilled to accelerate innovation with agile and dev.
ops

• Ok within the field of JAVA programming
• Difficult in the area of JDE & Amazon

Far behind on employee apps:

INTERVIEW
07

+

Einar Valbjørn “ LOCATION // OSLO
Heisum TENURE // 2012 - PRESENT

Station About me TBC
Manager
49
“ We must create
a movement
supporting our
unified global brand.

CHALLENGES • We might have a large B2B customer filling the tank on his truck and
paying at the fuel station, but when he enters the shop we don’t know
Q. What are some of the main challenges facing who he is
Circle K at the moment?
• No good mobile access to employee systems. Would be great to have
• At the station visit, we experienced that a personal Circle K EXRTA Club one app for logging hours, salary, working schedule, intranet and
membership in Denmark didn’t work out at the station in Norway - no collaboration
cross boarder B2C loyalty program support
• employees have access to training programs, job openings, Intranet etc.,
• Too few electrical charger stations, but it’s an expensive investment to but on shared computer or the station managers computer
make
• No proper Single Sign On for all systems. Need to login separately to a
• Challenge with partner provided charger stations is that everything number fo systems
is managed through the partners app and hence limited engagement
opportunties unless the customer enters the convenience store. • Collaboration between the 9 stations in the district collaborate in a
Margin on Cricle K charger is higher, because approximately 10% of the Facebook group
electricity comes from solar cells on the station roof
• Station personnel request more information from HQ and from Station
• People with electrical cars stay longer at the station, bu it seems like Manager on campaigns, products etc. ...everything that make them
they spend less on food and convenience per visit engage better with customers at the station.

• Loyalty messaging on promotions etc. not available to be pushed to all
stations screens (fuel station, electrical charger, coffee machine, POS
cash register, large flat screens etc.)

50