Bernd Heinrichs, chief digital officer at Robert Bosch, talks about software for developing mobility solutions and how automotive suppliers needs to prepare for a digitalized, networked auto industry

bosch-heinrichs-1-1024x735

Heinrichs: “Any CDO who wants to be successful has to work shoulder-to-shoulder with the CIO” (Photo: Claus Dick)

As business digital officer for Robert Bosch, Bernd Heinrichs is supposed to bring out new IoT-based business models for the company. But he is not just entertaining dreamy views of the mobility of the future. Rather, Heinrichs is developing pragmatic solutions to the transportation problems of today.

Mr. Heinrichs, Bosch is gradually leaving the role of the classic automotive supplier and is building up new domains. What is in the master plan for the Mobility Solutions division?

Bernd Heinrichs: We see the strategic areas of network mobility, automated mobility, powertrain systems and electrified mobility as the framework for the organization and content of our development work on products and systems. I personally see these areas as the nucleus of a wide range of possible activities extending far beyond the main business of the auto industry.

What does this mean in concrete terms?

Mobility, energy, industry, buildings – Bosch believes in networking different domains and sees itself as a developer of solutions, an applications specialist and the orchestrator of a large ecosystem for users, developers and partners to the same degree. The services that we are developing are not designed to run exclusively inside individual vehicles but instead connect with all networked vehicles, their environment, municipal infrastructures and smart homes.We have made this philosophy the basis for our activities.

Do you expect the deliberate positioning of your vision within abroad framework to give you a competitive advantage?

Yes. We are demonstrating that individual vertical segments continue to be important, but the overall structure will be decisive in the end. At Bosch Connected World in late February, our CEO Volkmar Denner said we are not interested in dreams of the networked world of tomorrow and the transportation of the future. We want to provide forward-looking solutions for the transportation problems of today. And we want to grow with them.

Might that be a practical way to gradually reduce the company’s dependence on the auto industry?

Bosch’s automotive division isand will continue to be its dominant business segment.It is the market that is changing. For one thing, we already see more cooperation among companies that come from different industries segments. For another, thanks to the many new services they are creating, suppliers are becoming partners that deal with automakers on an equal footing.

What technological trend is getting most of your attention right now?

It is no longer enough to deliver high-quality vehicle components and to connect them with one another into systems to make them smarter. The mobility of the future will involve a melting pot of many technologies that are all mingled together – including some that will first be deployed in other areas. Bosch’s diversity and know-how in software and sensors give us a huge strategic advantage in networking over the Internet of Things. Connected Mobility Services, a new core division, will expand these new services and solutions outward. Consider our Coup mobility service, for example.

That makes a good segue: Nearly 2,000 e-scooters are being driven on the streets of Berlin and Paris. What is the next step?

We are bringing Coup to Madrid before the end of the summer. The demand for the service is generally greater in southern Europe. This year, it will be exciting to see where and how we can ramp up the business model further. We are doing a lot in this area: We are optimizing and automating processes because Bosch’s emphasis is currently on the service itself– not on the battery technology or the maintenance of the scooters. That is the job of our external partners. In general, shared services represent a major growth field, and Bosch intends to expand its product line further in this area. For example, we just entered the ride-sharing business with the U.S. startup SPLT. We continue to plantnew, delicate seedlings in the ecosphere of shared services. If they grow, we could soon have a broad-based portfolio that is not just focused on inner-city transportation but on intermodal mobility as well.

How many developers do you need to launch new products and digital solutions such as Coup?

If you have the right people on board, you don’t need 100 of them. With its continual user research, integrated user testing and regular informal gatherings, our main Coup development team is based in Berlin and comes up with surprising ways to improve and further develop the service for our users. It is impressive for its relevance, simplicity and dependability.

Can you envision launching Coup in Rome, the quintessential city for scooters?

That certainly appeals to me … (laughs). Seriously,we are looking at three cities for the proof of concept in 2018: Berlin, Paris and Madrid. We’ll decide where else at the end of the year.

What is your assessment on how the market for robo-taxis will develop in coming years?

Mobility concepts based on robo-taxis are still in an early stage, even if we will increasingly seetrials of driverless test vehicles in urban environments in the future. It is no secret that Bosch and Daimler agreed to collaborate in this area last year.We will see the first test vehicles on the road over the next few months. This will give us more experience with the technology. I don’t think there is any question that robo-taxis are on the way.But more steps in its development are needed before they become a fixture of urban mobility.

Does Bosch have any interest in building its own robo-taxis?

Definitely not. In this area as well, we see ourselves as the automakers’ technology partner. With our wide-ranging expertise, we are bringing a great deal of added value into thediscussions that are now underway. But Bosch doesn’t build cars and won’t be building them in the future.

For economic reasons, Bosch is rejecting the manufacture of its own cells. But aren’t you worried about becoming dependent in the electric mobility area?

We’ve made the decision on the direction we are taking. We are convinced that battery cells will become a standardized, mass-produced article. We need to understand their technology, but we don’t necessarily need to manufacture the cellson our own. Bosch will naturally work closely with specialized manufacturers on their design and functionality. Manufacturing them ourselves is not crucial. At Connected Mobility Solutions, we will focus on another key area: services. In the long run, there is more to be gainedin services.

The American startup SPLT, which Bosch has acquired, is developing a platform that focuses on companies and commuters. Can the concept be brought to Europe?

There is already considerable demand for this type of service in the United States and Asia. During my time in Silicon Valley, I saw the benefits that a company can offer its employees withits own ride-sharing service. But the trips were coordinated manually. Today SPLT uses an app to identify the people who want to travel collectively to the same workplace, school or college. An algorithm finds the right carpool and calculates the fastest route. I believe many metropolises would be a good fit for this concept.

Bosch has taken a stakein the mapping company Here and it works with TomTom as well. In China, youreached agreements with AutoNavi and NavInfoin 2017. How important are highly precise maps in the industry’s drive toward autonomous driving? 

An autonomous carmust be able to wholly rely on its “sense organs.”Access to digital HD map material is essential.If we want to develop new mobility services with cities and communities,we need to work with different partners in Europe and in China. The maps give us the basic data in both cases. We can structure the information quickly and efficiently, evaluate itand use it intelligently.

Last year, Bosch said rather self-confidently that it wanted to provide the “brain” for self-driving vehicles. How are you executing these plans? 

It was inevitable that Bosch would take external data – that is, infrastructure and car-to-Xdata – and controls-related inputfrom the vehicle itself, and evaluateand process all the information. Cars are already viewing their environments with Bosch sensors.In the future, thanks to artificial intelligence and self-learning algorithms, they will also be able to interpret the information and make forecasts about the behavior of other elements in traffic. The series production of our AI computer for cars is expected to start early in the next decade.

Bosch CEO Volkmar Denner says it will take cooperative ventures to network the Internet of Things. What must a company contribute to be an attractive partner to Mobility Solutions?

For many years, we’ve worked on the expansion of a broad ecosystemwhose self-concept extends far beyond the classic business and supplier relationships. We strive for openness in the Internet of Things area – an open ecosystem as well as an openness to cooperation and partnerships. We know our entrepreneurial strengths in the IoT field and our expertise in vertical sectors. By using new and existing research and technology relationships, we want toexploit this strength and expertise as we develop more packages for each of Bosch’s business areas.

What role is information technology playing?

It is the main enabler, pure and simple. I’m happy to work closely with our CIO Elmar Pritsch. He is handling the delivery of information technology while I look at things with adistinct business focus. This clear division of labor has worked out exceedingly well. It has definitely proven its worth. Any CDO who wants to be successful has to work shoulder-to-shoulder with the CIO.

Finally, major automakers are increasinglybecoming technology companies. If companies are unable do this, have they already lost the game?

No question about it: Every supplier needs a clear plan for reach its medium-term goals in a digitalized, networked auto industry. Established companies in many industries have been disrupted over the past few years. Some have ceased to exist. I see the auto industry at a turning point: In the next three to five years, the digital disruption will have its maximum impact, which is why Bosch has pulled out all the stops as it tackles the development process, manufacturing, and even new business segments. We are open to trying new ideas and executing them with partners from other industries. We are happy to work with them. This approach makes Bosch a strong partner for the future.