November 12, 2012 / / No Comments

“I’m screwing around worrying about what version of mail I’m on, it’s wasted effort. It’s a lost opportunity … to do something more meaningful for our customers or our business.” – Zack Hicks, CIO Toyota North America

 

In the past week, there have been two great examples from the automotive industry on how the IT department is evolving away from back office support thanks to cloud computing services and refocusing on a more direct connection with the business mandate.

Business Insider recently published an interview with Zack Hicks, Toyota’s CIO for North America. Mr Hicks has been moving IT solutions from on-premise legacy applications to cloud-based services.

The IT service changes include:

  • Replacing IBM Lotus Notes with Office 365 for 200,000 employees
  • Replacing Oracle’s Peoplesoft for Workday* for HR systems
  • Distributing reports via Box instead of email or print
  • Hosting marketing web sites on Amazon (presume AWS/EC2)
  • Hosting apps that run in cars on Microsoft’s Azure

* Side note: Workday was founded by the founders of Peoplesoft. Peoplesoft was a hostile acquistion by Oracle.

When asked why Microsoft Azure was chosen for hosting the in-car apps, Hicks responded:

The great thing about Microsoft is that they’ve learned their security lessons the hard way and they’ve gotten really good at security. Security around the vehicle is No. 1. No. 2 is that you’ve got to have a partner that’s big enough to scale globally.

We’re stepping into uncharted territory. You have to worry about who’s going to own vehicle data. And that it’s the customer’s data. Its not the vendor’s data. That’s a privacy concern for us.

Whilst many may still criticise Microsoft, this viewpoint about security is backed up by recent research showing that, for the first time, Microsoft is not in the top 10 security vulnerabilities. Quite impressive given the installed base.

But focusing back on Toyota, a big emphasis in the article is how IT staff are being freed up from desktop-support to work on projects supporting the core business: technology in cars. Too often, IT is viewed as just an internal support function and one that can be easily outsourced to save costs. It’s refreshing to see a company moving IT up a gear (pun intended) into the fabric of the business itself.

Toyota is not the only automative business taking a more strategic approach to IT. BMW’s CIO Karl-Erich Probst delivered a keynote at the recent Gartner Symposium. Some of the statistics he shared included:

  • 1.4% of BMW’s turnover is spent on IT. Only 45% of the IT budget is spent on ‘keeping the lights on’. 55% is allocated to change and innovation. (This is impressive. The norm is much higher: 60 – 80% on KTLO)
  • Operations suppliers have been reduced from 200 to 7
  • Holds strategic conversations about IT every 3 – 4 weeks to ensure what IT is working on is aligned with business needs

This is how IT can make a real difference…

References

Featured image: Flickr image of a clouds from a car’s mirror courtesy of Stefano Meneghetti

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