LAS VEGAS — The smart, connected electric vehicle has already arrived. But hiding behind the sexy emissions statistics and eye-popping green technologies is a rapidly changing information technology organization that’s moving to adjust to a world it never dreamed of.
Speaking here at the 2011 Forrester IT Forum, Volkswagen of America CIO Warren Ritchie lent some insight into his company, which he says is making strides in an attempt to be the innovative arm within the company best known for the diminutive Beetle.
The company has been on an acquisition roll in recent years, but the reality behind the headlines is that acquisitions of vehicle marques — the company now owns 10, six in the U.S. — also means the acquisition of many IT departments that must be aligned toward common goals.
“70 percent of IT activity can be globalized, centralized,” he said. “Much less should be country-specific.”
But organizational structure isn’t the real story here; rather, it was how VW sees the vehicle — as an intelligent device to connect — and how it’s changing its IT business to accommodate for this new space.
“There are about as many lines of code in an automobile as in Windows,” Ritchie said.
Much of that code now goes to diagnosing problems, procuring updates, scheduling service appointments or charging and, of course, notifying the user what’s going on underneath the hood.
Here’s how your future car will work:
- It will detect an internal variance
- It will call home for central diagnosis
- It will identify a fix and component availability
- It will propose schedule options to the owner. When is the best time for a remote software flash? A dealership visit?
“Understanding vehicles and how they perform and when a fault code occurs and knowing all of those details, you now have better insight and so your warranty operations become much more efficient,” he said.
At the end of the day, you’re looking at a vehicle that can optimize itself, conducting autonomous maintenance and repair.
(If only the vehicle could press out a dent in its own fender. Perhaps one day.)
“No OEM is currently doing it all the way through, although many are getting close,” he said. “This is the kind of thing that is unique to the U.S. market.”
It’s where a connected vehicle meets a connected world operating through an “Internet of things.” Taking that 30,000-ft. approach to the ground, it means integration, partnerships, open ecosystems and self provisioning that IT-infused automakers must accommodate.
Not to mention the smart grid aspect of a plug-in electric vehicle — when best to schedule a recharge for the best rate, for example.
“This is the world we’re starting to pick up on,” he said. “It’s a business model that we’re really only beginning to figure out.”
Ritchie said the U.S. is unique because the connectivity is happening much faster. The problem: is there a business model for all this connectivity? And should VW lead, or follow?
Ritchie called it “non-traditional IT work” that he’s been adjusting his organization to support.
That means pursuing innovation via:
- New devices, allowing employees to experiment
- Sand box environments, then proofs of concept
- Connecting proofs of concept for cross-functional impact
- Setting a large part of the IT budget aside for innovation (VW America’s for 2012: 8%)
“We need to start to play with what a vehicle and dealership can offer,” he said. “We can’t wait for it to hit the market from Toyota or someone else.”
On tap: connected IT services such as Wi-Fi for mobility, cloud computing for flexibility, a services registry and a master data catalogue.
Slowly, the auto industry is helping change the business perception of IT as a mere utility.
Many top executives underestimate the complexity of the architecture, Ritchie said. It’s like a glacier — the vast majority of the work is beneath the surface.
But IT’s largest risk remains human change management, he said.
“If you don’t have a description of what you’re trying to innovate, it’s too broad brush,” he said. “It’s too easy to cut.”
Nevertheless, it’s still very early in the era of the connected car, and technical competency for them is not yet widespread. That means VW must hire from competitors to build out smart car infrastructure, Ritchie said.
“The originator was OnStar,” he said. “The Ford Sync model is also very interesting, because they put the individual through their smartphone to talk to [the car]. There are two different models in play, and we’re trying to find our way in there.”
It’s also a cultural shift within the organization.
“Product people look at the connected car like another service,” he said. “IT people look at it as more complex, driven and enhanced by corporate data that require back-end access.”
That manifests itself into the digital dashboards of the newest cars, a single display that symbolizes the technical and tactical difficulties of the early days of connected vehicles.
“What is proprietary? Software, we own. Whether we want to own and make certain external services available and embed them into the vehicle is another question. A lot of navigation stuff now is free, so a lot of consumers hold their tablet up [instead of using non-updating embedded tech for lifetime of vehicle]. A lot of automakers say we can’t compete in consumer electronics. The more we try to compete in that industry, the more we find that we’re too slow. And too expensive.”
But it starts with the back end.
“We’re closing our reaction time dramatically,” he said. “Once our position is solidified, we’ll be able to deploy globally very rapidly.”
Photo: VW’s XL1 concept car