BMW Financial Services depends for all its IT needs on the group's internal service division. IT at BMW is run by Karl-Erich Probst, CIO, while financial services at the German premium carmaker is headed by Erich Ebner von Eschenbach. Probst and Ebner von Eschenbach explain in an interview with automotiveIT what their common goals are and how their cooperation works.
automotiveIT: Mr Ebner von Eschenbach, where does IT fit into the business model of BMW Financial Services?
Erich Ebner von Eschenbach: In a global network we need to be able to process in near real time information from internal and external sources that's relevant to our financing and insurance products. That's how we can always be competitive.
automotiveIT: How important was IT in helping BMW come through the economic crisis relatively unscathed?
Ebner von Eschenbach: In the area of financial services, IT's contribution was no doubt substantial. Let me give you an example: To improve our liquidity and capital resources, we have started to convert our legally independent country organizations in Europe into subsidiaries of BMW Bank. We now have access to important international information ”“ for example with regard to risk provisions ”“ in a transparent way at the press of a button. That's important to meet regulatory requirements that have increased everywhere. This tight linkage of our markets wouldn't have been possible without a targeted further development of our common IT systems.
Karl-Erich Probst: Until 2008, IT was organized just as heterogeneously as the finance business. But five years ago we started to plan and put in place a fast, flexible and agile IT for the entire BMW Group. That has helped us. The system had to operate globally and optimally support system and process harmonization. Regardless of business area, we put together infrastructure, management and delivery according to a flexible "Lego principle." We cover 90 pc of our business requirement with this building block system. The rest we develop together with our colleagues in operations.
automotiveIT: What opportunities are generated by this IT approach?
Ebner von Eschenbach: The next generation of car users wants to be a user of mobility and doesn't necessarily want to own a car. The new business processes that are evolving are closely tied in with the financial services business. With our joint-venture partner Sixt, our DriveNow car-sharing program will shortly offer a modern mobility concept. The cars can be spontaneously rented anywhere and be left wherever the customers want. Our IT systems can even bill usage times by the minute.
automotiveIT: Mr Probst, is Financial Services a particularly demanding customer?
Probst: No more and no less than development and production. I spend about a third of my time on finance and banking issues. Even before the 2008 financial crisis.
automotiveIT: What kind of synergy is there between financial services and other BMW divisions?
Ebner von Eschenbach: There are wonderful cooperation possibilities between financial services and sales and marketing. For example, we have established a Customer Interaction Center in Columbus, Ohio, where 800 people manage all call center activities for both Financial Services and Sales and Marketing. In this area in particular there are lots of growth possibilities.
Probst: It's crucial to not just think in terms of systems, tools and solutions, but to look at basic data and process structures that can be jointly used by sales and marketing and financial services. What's needed is consistency in processes without having data silos that belong to individual segments.
automotiveIT: That requires a close cooperation that starts at an early stage, right?
Ebner von Eschenbach: That is correct. As soon as we come up with a new process that we want IT to support, Mr. Probst is sitting at the table with me.
Probst: We make sure that process design, IT design and IT operations experts are all pulling in the same direction.
automotiveIT: Do you cooperate with IT service providers that specialize in financial services?
Probst: Only when it concerns non-critical commoditized services that we can buy in the market. But there are no standardized blueprints for the kind of new products and financial services that we want to develop. All elements of IT solutions that differentiate us from our competitors are predominantly developed in-house.
Ebner von Eschenbach: That doesn't mean we don't outsource anything. We have, for example outsourced our call center in Germany.
automotiveIT: IT systems for financial services need to be extremely reliable. Does that worry you?
Probst: Our service level agreements are process-oriented. We know exactly how critical a particular IT component is for the daily business and that's how we establish our backup systems and emergency procedures. Last year, the availability of our IT systems stood at 99.98 pc. That's something to be proud of.
Ebner von Eschenbach: We regularly conduct stress tests on our IT systems. A good example is Japan, where we managed to move our people and all the IT resources they used from Tokyo to Kobe within a few hours of the earthquake and tsunami striking Fukushima. We did all that without a minute of downtime.
automotiveIT: What does Cloud computing imply for bank IT?
Probst: The term Cloud hasn't been defined very precisely. Every provider interprets it differently. But we're of course virtualizing our computing resources more and more. And, where possible, we're defining the IT operating costs in a variable way so we can best serve the business. We've also set up our IT as independent of any specific location. Infrastructure and operations haven't been tied to one particular data processing center for a long time.
-Interview by Ralf Bretting and Hilmar Dunker