Markus Schupfner became chief technology officer of Visteon in March 2016. Raman MehtaÂ started as CIO of the US-based cockpit systems maker in April of this year. Both are part of the newÂ top management team around CEO Sachin Lawande, who joined Visteon from Harman InternationalÂ in June 2015. In back-to-back interviews at Visteon headquarters outside Detroit, Schupfner andÂ Mehta talked about their companyâ€™s strategy, the changing role of automotive IT and the need forÂ todayâ€™s Tier 1 automotive suppliers to be nimble and fast.
Raman, you started as CIO of Visteon in April. What does the company expect from you and can you lift the veil on some of your plans in the IT space?
Raman Mehta: The aspiration of Visteonâ€™s management team is to become a technology company. That means the role of IT is changing drastically. Our CEO is looking to drive innovation by using technology. I see the role of the CIO evolving from chief information officer to a kind of chief influence officer to, ultimately, the chief innovation officer.
Youâ€™ll have to explain that in a bit more detail.
Mehta: Cars today are not just computers on wheels, but many computers on wheels with hundreds of electronic control units (ECUs) and millions of lines of software code. The connected vehicle and autonomous driving are inflection points in the auto industry and if you donâ€™t play along here, you will be left by the wayside. Our management expects us to become part of the companyâ€™s innovation cycle. We will have to deliver value quickly.
How big is your IT team?
Mehta: We have about 100 people directly on the payroll, but we rely a lot on partners. In areas that are not our core skills such as managing a help desk or an ERP system or creating a cloud infrastructure, a lot of outside companies can do this better, cheaper and faster. But we want to handle the crown jewels of the company ourselves. We want to leverage our en-gineering heritage and our close relationship with and understanding of our customersâ€™ needs. And we really want to hone our software skills to align them with the new products we are developing.
Markus, in-house IT expertise is obviously crucial to Visteonâ€™s success, but how do you work with the IT industry as a whole in developing new technologies?
Schupfner: One step we took last year was to establish our own office in Silicon Valley. There are two parts to this. One is built around artificial intelligence and this research is backed up in India. The second activity is technology research in general. We rely heavily on our global footprint of technology centers. Silicon Valley is very good for innovation and internet of things. In Europe, good work is being done on autonomous driving. And itâ€™s done quickly. And in China enormous amounts of money are being spent on new technologies.
Raman, how will the IT department work with the business divisions of the company.
Mehta: We want IT to be closely aligned with the business. The Visteon management wants to break down barriers. When Markus Schupfner and I work together, we create better products for our customers. We want to be seen as one engine firing on all cylinders.
But Markus also needs software engineers and they donâ€™t report to you. Isnâ€™t that a potential problem.
Mehta: We are looking for very collaborative approach. Markusâ€™ team has a lot of product innovation knowledge. If we can provide an infrastructure that will let them focus on creating better products, thatâ€™s a win-win for Visteon. We can, for example, contribute knowhow on cyber security or help with securely using a cloud infrastructure to make processes more elastic.
Do you want to be involved in new product development from day one?
Mehta: We are changing the ship in that direction. We would normally want to be part of the requirements discussion and want to be at the table when decisions are made on which products to launch. If weâ€™re involved at the conceptual phase, we can start to build in the security element and plan for scale from the start. Security is a key issue because, with connected cars, there are many more entry points for hackers and the threats are increasing. At Visteon, we want our customers to have a sense of security and feel that weâ€™ve got things covered. That can be a competitive advantage.
And can you cover all these bases with the 100 people you have or will your organization have to grow?
Mehta: Our organization will have to grow with the right skills. Weâ€™ll need to take care of our infrastructure, or people will not come to us. Weâ€™ll also have to bring in outside expertise. We wonâ€™t be shy in doing that if we donâ€™t have the skills in-house.
A lot of the IT talent companies are looking for is relatively young. How do older employees fit into digitally focused companies, in particular in the auto industry?
Mehta: I personally feel older employees could be one of our strongest assets. These people have immense amounts of knowledge of the business processes. They have engineering rigor, understand how to scale things at the enterprise level and they understand the importance of security. What they are lacking are the new tools that can really make them more productive in the new world. With autonomous driving and other new technologies coming a lot faster than we previously expected, we are bound to run out of qualified engineers. Thatâ€™s why Iâ€™m a big proponent of investing in people and giving them the tools to be successful.
Schupfner: We hire people with specific expertise and most of them are very young. We give these people the freedom to do things and let them work in a startup atmosphere. Last year, we built an autonomous-driving team that way. We looked for new office space and told the people we hired that they had the freedom to work from home, set their own schedules, define their own targets and goals for the year. One of the targets they set was to drive autonomously on Michigan highways by year-end. We also joined the Renault-Nissan Open Innovation Labs in Silicon Valley, Paris and Tokyo.
At the same time, you will need outside help to boost innovation. How do you work with startups?
Mehta: Whatâ€™s key for us is to create excitement about the Visteon brand name so startups want to engage with us. We will want to set up some small innovation centers and start using the crowd-sourcing tools we have. We will also need to find the right business problems that can be solved by startup companies. And we need to make sure that small companies can join us without a lot of red tape. We want to make the on-boarding process on our projects nimble and fast. If we donâ€™t do that, startups wonâ€™t want to work with us.
Schupfner: Our major strategy is aimed at being a high-end technology provider. A key question for us is how we can help automakers more quickly integrate the latest technologies. Weâ€™re looking for startup companies that can help us do that. We are more interested in cooperating with startups than buying them. Our big strength lies in working with startups and supporting them financially, but leaving them as they are. When a startup feels comfortable working with us, itâ€™s a win-win.
Raman, you already mentioned cyber security. Can the manufacturing industry stay ahead of the bad guys? Mehta: Iâ€™m cautiously optimistic, but itâ€™s one worry that keeps me awake at night. Thatâ€™s because a cyber security incident in the connected world can tarnish your brand image. So, we have to think like a software company and build security into every level of our processes. Without such a mindset, we are exposed. Computer hacking has become a full-fledged supply chain industry; itâ€™s no longer some bored kid sitting in a remote part of the world. We should be aware that cyber security incidents will happen, especially now that increased connectivity is creating all these new touchpoints. Itâ€™s key that we are prepared for this and that we can react to contain any damage.
But if you build security into all processes and products, you will slow things down and raise costs.
Mehta: The trick is to strike the right balance. You donâ€™t want be bogged down by multiple levels of approvals because you still need to maintain speed and agility. To keep all bases covered, software or security as a service comes into the picture. We also have to do a much better job of educating our employees about security issues.
Is the auto industry faster now than a few years ago?
Schupfner: Itâ€™s much faster. Twenty years ago, it would take four years to develop a complex system in the infotainment space. Today we can actually bring new technology to market in one year. That has a lot to do with the hardware cycle getting more in sync with software, which could change every quarter.
Which brings us to the question of over the air upgrades (OTA). Only Tesla today really has that capability, but other brands will have to follow soon. Are they?
Schupfner: All software in the instrument clusters we are building today has to be upgradeable over the air. Weâ€™re seeing the premium brands go that way as well. They have to do this to be able to offer the latest functionality. The question today is no longer if weâ€™ll get this functionality, but when it will come.
So what is the problem then?
Schupfner: Cars still have many electronic control units (ECUs). They also have legacy systems and they might have an old network architecture. The big jump will come with all-electric cars, which will have a new electrical/electronic architecture, gigabit ethernet and new devices. With the kind of centralized approach we are working on, with fewer ECUs, updating the car will become very much like updating a smartphone.
Schupfner: Car companies are hiring hundreds of software engineers and they are opening new, specialized development centers. The main incentive is autonomous driving and the new mobility service models that see the car as a device that is upgradeable and scalable. The fear factor comes from seeing what IT companies such as Tesla can do in the car.
As cars, plants and all systems become connected, standardization and open standards are increasingly important. Markus, please share your views on this.
Schupfner: Many automakers traditionally separate connectivity and the applications they run. Often they offer a closed system and you have to be part of a particular consortium. If you agree on standard application programming interfaces (APIs) such as the one developed by W3C (the World Wide Web Consortium), you open up the car. The W3C standard is just an internet standard and it already exists. If you would create a new standard, it would take 15 years. If you want to connect the car to the traffic infrastructure, to your house, your calendar, you need to write apps and you need to use what is already there.
And is the auto industry embracing this approach?
Schupfner: The car industry in the past wasnâ€™t so open to the approach, but now it is increasingly taking its cue from the likes of Tesla and Google. The German premium carmakers are already using W3C for internet connectivity.
Raman, you want to drive innovation and boost efficiency. How long will it take before some of your planned new initiatives will start to bear fruit?
Mehta: Anything we talk about at Visteon today is a matter of weeks or months. We have to move at that speed, otherwise you run the risk of becoming obsolete. The business sees that we are no longer the IT that deployed the old waterfall model. We are more an agile organization that brings constant value and corrects course as we go along. Whatâ€™s most important is that our business colleagues feel much closer to us than before.
(Editor’s note: A longer version of this interview was published in automotiveIT magazine. For a complimentary subscription, please go to: www.automotiveIT.com/subscribe.)
Interview by Arjen Bongard
Photos: Larry Peplin