Intelligence from scratch
The digital transformation has many faces at Porsche. Whether it’s bringing artificial intelligence into the core of the organization, offering new digital services, transforming the own IT, exploring new worlds or collaborating with new partners, beautiful minds and different startups: In this interview with German magazine DUB, Porsche CIO Mattias Ulbrich explains how versatile successful transformation can — and somehow must — be.
1. Artificial Intelligence, Deep Learning, Blockchain, Internet of Things — in which technology do you see the greatest potential for the future and why?
We are dealing intensively with future technologies, test them in various scopes and use them where it makes sense. We have also integrated artificial intelligence into our digital strategy as a basic building block. AI increases productivity along the entire value chain. This will give people more time for the essentials in the future — like finding creative solutions, conducting conversations or making the right decisions in complex situations. Just as physical strength does not make a good employee in production today, purely formal qualifications will also not be relevant in the future anymore.
2. In your opinion, what are the biggest challenges of digital transformation in the automotive sector?
The automotive industry is currently developing faster than ever before. In the next five years, there will be more changes than in the last 50 years. We are therefore on the way to modify our business model fundamentally: From a traditional automobile company to a software-supported automobile tech group.
The biggest challenge might certainly be scaling. We have already successfully implemented a number of good use cases. Now we have to spread the insights we have gained quickly and comprehensively. In concrete terms, this means: building up additional teams, pushing topics forward internationally and consistently leading the way in both development and rollout by 2025. Porsche will purposefully expand its range of products and services.
3. A kind of rule of thumb for digitization says: Those who do not face the change run the risk of being thrown out of business by disruptive developments. How has the relationship between established players and attackers developed in your industry? And how does Porsche react to this?
In the IT sector especially car manufacturers have to cooperate much more closely across corporate boundaries in order to be able to assert against competition from the internet. We need common digital platforms — with individual customer-specific design. If possible, you need a broad customer base and you don’t achieve this if you develop everything for yourself. We have to think much further than we have done so far. It is important to open up not only towards start-ups but also to the competition. Otherwise, it won’t work.
For us, the development of entire platform solutions is becoming increasingly important. Most recently we announced the establishment of an industrial cloud at a group level together with Amazon Web Services. A digital production platform will link production sites and machines worldwide in such a way that a picture of the current situation is created in real-time. The relevant data includes production figures, machine performance parameters and, of course, time-related information. On this basis we will set up microservices — these will enable us to create application software significantly more modular and to use it also more flexibly.
4. In recent months, Porsche has increasingly invested in start-ups like Urgent.ly. The young company networks drivers, service providers and car manufacturers in real-time, thus coordinating the best and fastest possible assistance in case of a breakdown. Why does Porsche focus on start-ups and not use its own manpower within the company to enhance innovation?
Innovative strength is firmly embedded in our corporate strategy. We are also continuing to expand our competencies internally, for example by forming 100 AI experts by the end of 2020. We have also established digital and innovation units: With over 100 employees in Ludwigsburg, Berlin, Tel Aviv, Silicon Valley, Shanghai and soon Atlanta, Porsche Digital is looking after new business models and scouting. But we also know that we can’t do it on our own. For this reason, we are increasingly focusing on partnering and venturing.
5. The corporate giant IKEA is currently experimenting with leasing and rental models for its furniture. With Porsche inFlow, customers have the option of driving a Porsche for a monthly package price. Do you regard such models — renting instead of buying –as a way into the future across all industries?
With Porsche inFlow, we are testing new sales models and thus are also addressing customers who drive a car but do not want to commit themselves for the long-term by purchase or lease. You can subscribe to a Porsche by app at a fixed monthly price. After six months, subscribed customers can switch to a different car model according to their needs. With the help of these customer groups, we want to gain experience. Who are they? How do they actually use the cars in their subscriptions? At the same time, we want to find out how we can turn this target group into buyers. After all, selling cars is and will always remain our core business.
6. A look into the future: When will an autonomous car take us from Hamburg to Munich?
Porsche will always be a brand you want to drive yourself and we hope that this will be possible on our roads for a long time to come. But there are situations for Porsche drivers in which they will be happy to rely on autonomous driving modules. Nothing speaks against autonomous driving in traffic jams, in stop-and-go traffic. It is attractive to me when I can read a newspaper and the car drives me to work. In addition, we are working on concepts for interpreting autonomous driving in a Porsche-typical way. For example, we are thinking about a Mark Webber function: Just imagine a virtual Mark Webber chauffeuring you around Nordschleife at the Nürburgring. He forms a kind of instructor and coaches you virtually.
7. How have the demands on your employees changed? Where will the increased use of artificial intelligence and automation replace human labor in the future? And vice versa: In which areas will you need new employees with new (digital) skills?
We use digitization primarily to support our employees. Robots, for example, will perform ergonomically difficult tasks. New analysis and control instruments are replacing highly complex processes. This results in more demanding activities for the employees in the control of the new technologies. We are constantly training them regarding this. In addition, numerous technology experts in our digital units deal with the topics AI, Blockchain and the Internet of Things on a daily basis. The digital transformation results in new business fields and requirements for companies and their employees. Porsche has set the course for this process.
This interview was first published in German magazine DUB here.