CHANGE OF IT THROUGH DIGITALIZATION. KLAUS STRAUB, CIO BMW GROUP 13 July 2016
BMW GROUP OVERVIEW 2015. 116.324 employees worldwide 2.247.485 sold vehicles worldwide in 2015 BMW Subject Group Department IT June 2016 Date Page 2 BMW Group IT 13 July 2016 Page 2
SOLID START INTO THE NEW BUSINESS YEAR. BMW GROUP SALES FIGURES YTD MAY 2016. BMW Group IT 13 July 2016 Page 3
FORWARD-LOOKING STRATEGIES LEADING TO A SUCCESSFUL CORPORATE DEVELOPMENT SINCE 2001. BMW Group IT 13 July 2016 Page 4
STRATEGIC APPROACH OF THE BMW GROUP STRATEGY NUMBER ONE>NEXT. BMW Group IT 13 July 2016 Page 5
THE CONSISTENT IMPLEMENTATION OF THE STRATEGY NUMBER ONE>NEXT INITIATES A TRANSFORMATION PROCESS TO A TECH COMPANY. today tomorrow Products Mobility & services Die Wertschöpfung verschiebt sich von der Hardware in Richtung Software und Services. Harald Krüger, 16 March 2016 BMW Group Bilanzpressekonferenz Products Mobility & services Software & services (tech) Impact on: Customer Experience Shareholder / analysts Stakeholder / partner Employees/ attractiveness Digital customer experience, connectivity and self driving cars as well as digitalized business processes lead to a transformation of the BMW Group into a direction of software and services (tech). BMW Group IT 13 July 2016 Page 6
INTERNAL AND EXTERNAL CHALLENGES REQUIRE AN UPDATE OF THE BMW GROUP IT STRATEGY. Global value creation and changing competitive landscape Digital transformation, changing customer interface & new business models Growing product portfolio, financial pressure, security risks Change in the importance of large parts of the traditional corporate IT BMW Group IT 13 July 2016 Page 7
THE CAR AS A PART OF THE INTERNET: AUTOMOTIVE INDUSTRY IS FACING HIGHLY DISRUPTIVE CHANGES. BMW Group IT 13 July 2016 Page 8
NEW ECONOMIES & NEW PLAYERS ARE RISING. 2015 The world s largest taxi company owns no cars. Value Over 62 billion USD
NEW ECONOMIES & NEW PLAYERS ARE RISING. 2015 The world s largest accommodation provider holds no estate. Value Over 24 billion USD
NEW ECONOMIES & NEW PLAYERS ARE RISING. 2015 The world s most popular media owner creates no content. Value Over 180 billion USD
NEED TO ADAPT. Seite 12
NEED TO ADAPT. 2015: Car Bookings in amount of 11 Mrd. $ Located in > 60 countries and > 400 cities > 160.000 Drivers and > 8 Mio. Users
NEED TO ADAPT. US-Patent for autonomous driving 20 Vehicles drive in total ~16.000 km / Week More than 2.5 million km driven autonomously Google-owned mapping company Waze is launching a ride-sharing pilot in several Israeli cities
NEED TO ADAPT. Forbes 2015: Tesla is the most innovative company 2015: 4,046 Mrd. $Turnover first car with lithium-ion cells 2015: electric cars were better sold in Germany, than BMW and Mercedes automobiles 400,000 preorders for the new Model 3
EXPECTATIONS FROM THE BMW GROUP TOWARDS THE BMW GROUP IT ARE VERY HIGH. Wir sind mitten in einer Phase der Transformation in die digitale Welt. Harald Krüger Die Zeit, 5. November 2015 The big catalyst of change is now the digital environment. Dr. Ian Robertson Automotive News, 16. September 2015 Kunden wollen das digitale Leben im Auto. Peter Schwarzenbauer automotiveit, 04. August 2015 Unser Geschäft bekommt ganz neue Spielregeln. Harald Krüger SZ, 14. September 2015 The new BMW 7 Series can already park itself, without a driver behind the wheel. And that is just the beginning. Harald Krüger Die Zeit, 5. November 2015 Klaus Straub, CIO BMW Group, 19.04.2016 Page 16 Klaus Straub, CIO BMW Group, 18.01.2016 Page 16
WE CHOOSE A MODEL WHICH COMBINES RELIABILITY AND SPEED FOR STRATEGICALLY ORIENTING BMW GROUP IT. RELIABILITY Mode 1 is suited to clearly defined projects and processes Flexibility Mode 2 is suited to new project with high uncertainty BMW Group IT 13 July 2016 Page 17
BMW GROUP IT ORGANIZATION. ~ 4.300 employees Business Units BRM Americas Asia Pacific Europe, Middle East & Africa (EMEA) Design Build Local for global Local for global Idea to Offer Enabling Processes Offer to Order / Delivery to Customer Care Order to Delivery Financial Services & NSC / NSFC (EMEA) Digital, Connected Services Operate Operation Center Operation Center Application Management Infrastructure & Technology Management AM (DevOpps) Govern Governance BMW Group IT 13 July 2016 Page 18
THE BMW GROUP IT WORLDWIDE TECHNICAL FACTS. More than More than 6,000,000 130,000 The BMW Group backend processes vehicles are connected with the BMW Group backend for ConnectedDrive. 15,000 BMW Group end devices. 6,2 Server instances. Highly scalable Big Data Cluster with Calculation of megawatts output of our 4 data centers. 1,000 128 nodes and 2,5 47,000,000 Network infrastructure for 800 694 venues worldwide. 46,247,657 10,400 calls per day. Wi-Fi access points. BMW CFO Conference Group IT 13 FG July 2. 2016 June 2016 Page 19 crash tests per day. PB storage. Data lake for analytic innovation with gigabyte storage & backup. TB BMW Group Data.
WITH PERFORMANCE IT WE COULD INVEST IN FUTURE STRATEGIC TOPICS LIKE BIG DATA PLATFORM BASED ON ONE DATA LAKE. Customer Understanding Enablement of new Products & Services Improvement of existing processes Advanced Analytics Machine Learning Statistical Modelling Real-Time Analytics Structured Data BMW Data Lake Data Dictionary Real-Time Streaming Machine-generated Data Customer Production, Logistics Vehicle Development Environment, 3rd Party Batch Unstructured Data Big Data Cluster USA Germany China Public/Private Cloud Extension BMW Group IT 13 July 2016 Page 20
BIG DATA IM AFTERSALES. USED CAR PASS. Data Integration and Usage. Business scenario and expected value. Situation Fraudulent vehicle manipulation No trusted system to assess real mileage and condition of used car TSSB TRIC- Zentral Complication: Complex modelling for the Used Car Pass which needs a large amount of different measurements Large number of files (> 100.000 per day) with up to 200 mil. measurements each Many different data sources Data filtering and quality assessment Advanced Analytics Domain Knowledge Resolution: Advanced Analytics for complex model, which is reliable and robust Using the storage, memory and computing power of the Hadoop cluster to develop previously not feasible models Expected value: Expected value for the Used Car Pass is estimated to be up to 82 mil. until 2021 (China only / Increased sales / Residual value effect) BMW Group IT 13 July 2016 Page 21
ADVANCED ANALYTICS PAINT SHOP DINGOLFING. ONLINE PROCESS CONTROL FOR PAINT SHOP. Quality rating and process optimizations. Business scenario and expected value. Input Data: Sensor gradients during paint process (base coat): 1.600 painted bodies per day. 25 modules per painted body. 12 robots per line. 11 sensors per robot. > 2.000 measurement points per sensor. Data Usage: Online process control to ensure quality (focus on base coat thickness). Uses the Analytical Workplace. Process Control Analytics Situation New integrated paint process requires gapless quality control of base coat thickness. Virtualization of laser-based measurement robots (paintchecker) in order to reduce invest and space requirements in plumbing unit. Enhanced quality standard requires process optimizations beyond human experiences. Current Investigations: Using Advanced Analytics to improve quality control and include further quality parameters (color, appearance, paint defects). Aptitude of data pool for predictive maintenance in paint shop. Expected value: Reduction of rework & Increase of quality. Reduction of production downtimes & maintenance costs. Lookout: Usage of prediction models for process optimizations and fault prevention. BMW Group IT 13 July 2016 Page 22
DIGITALIZATION AS A GAME CHANGER IN THE AUTOMOTIVE INDUSTRY. THE IT AS THE DRIVER OF THE CHANGE. INDUSTRY 4.0 CUSTOMER INTERFACE CUSTOMER EXPERIENCE BMW Group IT 13 July 2016 Page 23
THANK YOU. BMW Group IT 13 July 2016 Page 24