“The automotive industry has witnessed a drastic evolution. Electric cars, autonomous driving and the recent sharing economy require companies to adapt to technological advances. These new developments are increasingly relying on digital know-how. Failure to adapt to these new circumstances likely means the failure of the business.”
These are the words of Peter Friedwagner, head of infrastructure and common platforms at Porsche Informatik, a subsidiary of Porsche Holding Salzburg, which is under the Volkswagen Group umbrella. The organization develops the automotive trade software for wholesale, retail and aftersales (service), as well as parts of distribution and financial services essential to both Porsche Holding Salzburg and the Volkswagen Group. Porsche Informatik prides itself on being a trendsetter and driver of innovation. However, when Friedwagner joined in late 2017, the seismic developments in the automotive industry meant Porsche Informatik needed to apply some technological innovation to its IT Infrastructure.
When Porsche Holding Salzburg was founded in 1947, car development was concerned with engine innovation, aerodynamics and not much else. In 1950, electronics costs made up only 1 percent of the total cost of production. Today? These sit at close to 35 percent.
In fact, 90 percent of car innovations and new features are now driven by electronics — and this is only inside the car. Ridesharing and other mobility services are challenging the automotive market ecosystem. The fear is that personal car ownership will become an expensive luxury rather than a necessity. Ernst & Young predicts that in the near-future, automakers “will need to find innovative ways to retain consumers’ loyalty.”
On joining Porsche Informatik, Friedwagner set to work driving digitization throughout its infrastructure, resulting in a flexible and reliable IT base. “Our goal is to reduce complexity, while building a solid digital foundation. This enables the fast integration of new technologies, and we’re already seeing the benefits,” he explains.
“Porsche Informatik is working with containers as a service, artificial intelligence (AI), big data and virtual reality. Within our IT infrastructure, we use machine learning-based monitoring tools to detect failures at an early stage and minimize the impact,” Friedwagner says.
Organizationally, innovations can come from the top down or the bottom up. Friedwagner empowers his employees to be change agents internally: “A central element of our creative culture is our network of change agents. In addition, a product-oriented, autonomous team structure allows mobile working and innovative work environments. This gives employees the freedom to be creative, helping our business growth.”
Leadership is the key to driving this transformation, and Friedwagner places himself front and center. “Continuous innovation is the result of a constantly evolving organization and a constantly evolving culture. Executives play a key role. We must act as role models to shape the culture of the company,” he says.
When reflecting on the journey of change, Friedwagner thinks of himself driving a bus with his employees as passengers. His challenge: to get them all happily on board. His approach of stewardship, not ownership, allows him to motivate and engage them as he guides the bus in the right direction.
“Business challenges and sharp curves may threaten to throw you and your passengers off the road, and sometimes you need to shift down a gear, in order to guide the bus to the destination you desire,” says Friedwagner.