Forrester IT Forum: Volkswagen drives business success through IT change
The car giant has slashed the number of systems it operates in a bid to eliminate cost inefficiencies and enhance quality.
Volkswagen has embarked on a three-pronged strategy focused on reducing complexity, integration and innovation, that it hopes will help it adapt its infrastructure to support a business model that has also had to evolve due to changing market conditions and consumer demand.
As part of the strategy, the company has reduced the number of systems it operates from more than five thousand down to less than 400, as well as using IT to transform the business and reduce the time it takes to bring a new model to market from five years to just three.
Volkswagen produces 24,000 cards each day, mainly in Europe. As a result its operating model is highly complex, with, for example, a possible 13 million combinations to choose from when opting for a Golf, including a selection of 1460 mirrors.
Last year, the company brought 37 new models to market. The plan for 2007 is to introduce 22 new offerings, further fanning the flames of complexity.
"Yes there is a risk [that we may take our eye of the ball as we move from reducing complexity to the integration phase] but there is no other way," the car giant's chief technology officer Stefan Ostrowski told delegates at analyst Forrester Research's IT Forum EMEA 2007 in Edinburgh this morning.
"Today, we have 130 models and we could not have that variety if we don't get more efficient into our operating model. [This variety] has led to an explosion in cost inefficiency and some quality problems but we can already see that the quality issue has been reduced dramatically just by the harmonisation of production processes."
Under the driving force of the IT department - which was renamed the IT and process organisation (ITPO) as part of the transformation - staff members have morphed into generalists who are capable of communicating with business stakeholders more effectively than in their previous guise as specialists.
Furthermore, each specific car unit has its own IT division and chief information officer (CIO) and project milestones are regularly reviewed to ensure everything is on track.
"We have moved from function to process and from business to IT and I want to tell you how the board at Volkswagen decided to use IT to change the business," he told forum attendees, detailing how IT was tasked with the role of co-designer of the business' processes and asked to speak their language to achieve this.
"We have trained more than 400 IT people to take an active role in the new organisation," he said. "As well as [process] modeling, they speak to the business and understand business processes to act as a mediator."
http://www.itpro.co.uk/news/115373/forrester-it-forum-volkswagen-drives-business-success-through-it-change.html
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