Sven Lorenz, Porsche’s CIO is a busy man. Not only does he have to manage integration with new majority owner Volkswagen, he also has to deal with the increasing role of social media, continued tight budgets andthe need to get dealers to use one dealer management systems. Lorenz spoke recently with automotiveIT about these and other issues facing the global IT manager.
AutomotiveIT: Mr. Lorenz, as IT chief, do you know how many “I like” clicks the Porsche Web site currently has on the Facebook Internet platform, which is blocked within your company?
Lorenz: To be honest, no. I am actually not aware of the current number. The reason is that our colleagues in marketing and public relations are responsible for the use and evaluation of this Internet platform. In any case, they have unrestricted access to Facebook and other social media sites.
Porsche sees them as one of many tools and makes it available to all employees who need it for their jobs. Like other companies, we prevent its use for non-work-related purposes with appropriate filters.
AutomotiveIT: More than 1.2 million people like Porsche’s Facebook page. About 200,000 fans were added within three weeks. From this dynamic, people can see that you as a company can’t get around Web 2.0 any longer…
Lorenz:We are naturally giving thought to how we can best deal with the rising generation of employees, the so-called digital natives. Porsche should continue to be an attractive employer and we want to offer a modern workplace in the future as well. There’s no question about that. But we are strictly paying attention to economic efficiency.
We are concentrating on the tools that optimally support the respective functions in the company. For those of us in IT, it’s naturally a big job to support the fusion of the working world and the private sphere on platforms such as Facebook in a responsible way.
AutomotiveIT: It sounds as though you were looking at the trend rather skeptically?
Lorenz: I am only skeptical about the protection of personal and, where applicable, company-related data on social media platforms. I think that we have to shed more light on this. In contrast, the question for corporate IT is how Web 2.0 technologies can be used profitably within the company. At the same time, you have to realize that, basically, Web 2.0 isn’t really anything new at Porsche IT and elsewhere. We already had forums and other Web 2.0 applications running.
For one thing, the issue’s novel quality today comes from the current generation of access devices that allow entry to online information everywhere and all the time, and not for just IT-minded users. For another, from the possibility of allowing all users to create editorial content completely decentrally. That definitely offers some interesting aspects to the Porsche community and complements conventional communication technologies such as the telephone, email and the intranet. I don’t see a magic bullet in Web 2.0 tools.
AutomotiveIT: Another issue: In the last two years, you have brought outsourced services back in-house. Where does your internal value-added stand at this point?
Lorenz: During the crisis, we actually took over a range of outsourced work ourselves to fully utilize our workforce. This included activities that I don’t consider to be among our core tasks. For example, in software development or in the maintenance and support of our application systems. That has pushed our internal value-added to nearly 50 percent. The goal was not to have to cut any jobs during a time of smaller budgets and project portfolios. We have maintained our workforce of 160 employees at our Zuffenhausen, Ludwigsburg and Weissach facilities.
AutomotiveIT: When will you again reach your “nominal internal value-added?”
Lorenz: Porsche IT is lean and flexible. We showed that in the crisis. Now its portfolio of projects is growing again significantly, and our internal value added will again move toward 30 percent in 2011. That’s the figure to which we are oriented long-term. I consider this more a matter of effectiveness than of operating figures. And this isn’t measured in bits and bytes, but rather in the quality of the business/IT integration and the capacity to create efficient IT solutions to avoid unnecessary process steps , and to automate and integrate business processes.
AutomotiveIT: What about your budget and your capacity utilization in 2011?
Lorenz: Porsche is expanding its portfolio, and new vehicle and platform projects always go hand-in-hand with adjustments or expansions in IT. For example, the 100 new engineers that Porsche just hired want to be supplied with a functioning workplace system. And the IT infrastructure is growing as part of the facilities expansions launched in Weissach last spring, With the budget growth and new projects, we will be operating at capacity in 2011 – and we will have to be reinforced selectively from outside. In the last year and a half, however, we have reduced our resources by 25 percent. That was a significant amount, and we haven’t returned to the level of 2008. The savings that we have achieved during ongoing operations will continue to have an effect. They are the result of increased efficiencies and an adjustment in service levels. But despite the cutback in services, there have been no serious disturbances in our operations. In any case, ongoing strategic projects were not affected. We have deliberately continued to conduct them with a sense of proportion. But other plans have been put on the back burner, were scaled back, or completely put on hold.
AutomotiveIT: Can you give us an example?
Lorenz: In 2008, we intend to integrate, as well as possible, the more than 70 dealer management systems used in our roughly 600 Porsche dealers worldwide into our back-end systems. We are tackling this much-need work late, in 2011. We’ll also catch up on some release changes that we postponed. These were one-off effects that we cannot repeat a second time. Otherwise, we’ll lose our connection to technology. We can’t kick the can down the road.
AutomotiveIT: What do you specifically expect from a DMS integration?
Lorenz: This step provides continuous support for the main sales processes, including the new vehicle business, part supplies and warranty processes, with a local system. In its current state, the integration still varies markedly in individual processes. We see the potential to simplify and accelerate the workflow for many dealers. But that is no easy task, because we as a centralized IT organization can only influence DMS preferences in limited ways. At this point, we are collaborating closely with our IT colleagues at Volkswagen, who have already successfully implemented this kind ofDMS integration platform. And we‘ll use portions of this infrastructure.
AutomotiveIT: Volkswagen is coming in on cue. How close have you approached Klaus Hardy Muehleck’s IT organization.
Lorenz: Porsche and Volkswagen have indeed worked successfully with one another for a long time, especially in vehicle development. That’s the reason that many processes and system environments involving the development of the VW Touareg and Porsche Cayenne have already been successfully interwoven. And that will certainly increase, in Audi’s direction too. In the next step, we’ll come to grips with the Cajun, taking components from the Audi Q5 into account.
That means more steps in the integration process will follow. Common methods ultimately need uniform IT tools. Otherwise, we can’t develop economies of scale. So we’ll look very closely at the extent to which we could benefit from systems within the Volkswagen Group. And there will also be exchanges in the other direction: For example, Volkswagen has certified that we represent a best practice for our processes, methods and systems in customer relationship management. We are currently working very closely with Volkswagen to make Porsche’s CRM know-how accessible.
AutomotiveIT: There is no wrangling over CAD systems, for example?
Lorenz: We are especially well adjusted in this area. As an authoring system for the development of digital models, Catia V5 is running at about 700 of our CAD stations. That makes us compatible with Volkswagen development. Different solutions are used in data management. With us, it’s Enovia from Dassault. At VW, it’s Teamcenter from Siemens. Here we have to give thought to how we want to manage this in the future. We are also observing with great interest the experience that Daimler is having with its announced switch to Siemens NX CAD software. It is leaving the quasi-standard in the German auto industry.
AutomotiveIT: Daimler as a brother in spirit?
Lorenz: When it comes to these strategic questions, we in the German auto industry are traditionally closely aligned. It can’t really be any other way because we often cooperate with the same suppliers. Not every manufacturer can create its very own world of tools. The additional costs associated with this would affect everyone and ultimately penetrate through to products. So it will be exciting to learn what outcomes Daimler’s announced switch will have in the medium term.
AutomotiveIT: In mid-2011, you are putting a new computing center into operation at your Zuffenhausen location, Have ecological viewpoints played a role in its construction?
Lorenz: Green IT is definitely an issue for Porsche because energy accounts for more than half of the operating costs in the computing center. We absolutely see the potential, for example, to reduce energy use on the infrastructure side on a sustained basis and thus make an active contribution to the environment.
-Interview by Ralf Bretting and Hilmar Dunker.