“No more stop signs”

The Schaeffler Group is one of the newest members of CBA Lab. The company is a global automotive and industrial supplier that manufactures high-precision components and systems for engines, transmissions, and chassis, as well as rolling and plain bearing solutions for a large number of industrial applications. The Group’s activities are supported by approximately 1,500 IT employees and the ten members of an Enterprise Architecture department that was established in January 2018. In an extensive interview below, Joachim Schmider, Vice President IT Architecture at Schaeffler AG, explains the tasks performed by enterprise architecture experts at the automotive and industrial supplier company, how these experts view their role when they approach their work, and what they expect to achieve through their company’s membership in CBA Lab.

The relatively new EA department at Schaeffler is dedicated to providing the best possible support for the digital transformation at the company. One of the department’s priorities is to put artificial intelligence to work for the Group’s manufacturing facilities and products. Schmider views EA as an agile discipline that can build a bridge between technology, IT, and business value. In Schmider’s opinion, the most important task for EA today is to convert technical possibilities into business value: “We need to build a bridge between technology, IT, and business value, and as a business enabler we also need to build this bridge quickly and in an agile manner. We are navigators and guides in a fast-moving environment.”

How large is your IT operation at Schaeffler?

Schmider: We employ around 960 people at Corporate IT, and we have another 500 or so employees at other IT units worldwide.

How is Schaeffler’s IT infrastructure organized – in the cloud or on-premises?

Schmider: Our point of departure here was a traditional IT approach that included the operation of our own data centers and the existence of a large internal IT infrastructure footprint, which is now undergoing a huge transformation within the framework of our overall IT transformation at the moment. We are now using a hybrid cloud approach known as the Schaeffler Cloud Platform, which consists of several providers and focuses on the services offered and utilized in each case. Basically, our strategy is to obtain IT services using a cloud approach as the preferred option – directly as SaaS, PaaS, and managed services on the basis of PaaS or IaaS, as well as custom cloud applications based on new microservice architectures. In principle, our goal is to procure standard capabilities more as a package solution, ideally as SaaS, and then develop additional specific solutions on our cloud platform ourselves.

What are you hoping to achieve through your membership in the Cross-Business-Architecture Lab?

Schmider: We want to work with experts from other companies in order to develop new approaches for current issues and challenges. We would also like to both share our own experiences and gain an insight into topics that are new for us. A key role is played here by the concept of ‘helping others help themselves’ – in a group of experts who face similar challenges. We want to discuss and also question our views and approaches in a cross-sector setting in order to continuously improve our operations.

How can CBA Lab benefit from Schaeffler’s membership in the association?

Schmider: Schaeffler is now in the midst of a digital transformation in which IT transformation plays a key role. Our enterprise architecture management (EAM) system is based on CBA Lab’s well known view of EAM as a management approach that points the way forward for the digital transformation. We are happy to share with the CBA Lab network our experience with the establishment and structuring of EAM systems, as well as our experience with the associated technological developments. We are now playing a pioneering role in certain areas, which means both existing CBA members and we as a new member benefit from our collaboration.

What is Schaeffler looking to achieve the most in terms of IT, and what is driving the company forward the most in this regard?

Schmider: Well, it’s the digital transformation, of course, which is also making IT more user and customer-focused and enabling the rapid and targeted establishment of new IT capabilities that benefit our business operations. AI is definitely a key capability here, one which we plan to more consistently utilize not just in IT applications, processes, and services, but also in our Schaeffler product portfolio.

What is Schaeffler doing, or planning to do, in the area of artificial intelligence?

Schmider: Basically, Schaeffler is combining its longstanding expertise in integrated development and production with the possibilities offered by artificial intelligence. Our systems and components are installed in those parts of machines where the most important data is created. Sensor technology plays an important role here. For example, AI systems can learn how to identify patterns in process sequences, and our domain experts are able to use this information to reassess various interconnections and make predictions. This in turn enables us to make our processes more efficient and prevent process malfunctions. Other promising application areas for AI include sales forecasting and the design of digital services for our products.

We plan to continue examining AI in all of its facets in the future as well. For example, we would like to gain an understanding of applications and systems in the early stages of their development and also test them. This will make it possible for us to implement them more quickly in the Schaeffler environment. Our goal here is not only to apply the associated capabilities to individual use cases but also to make them scalable so that they achieve a bigger impact. This applies equally to our processes and manufacturing operations, our analyses and simulations, and our products and services. A positive user experience and a high level of added value for customers always play a key role here.

In the area of conversational interfaces, we are seeking to achieve more intuitive and natural interaction between people, machines, and IT systems, for example. Our machine learning models enable us to identify patterns and interconnections across the entire value chain much more quickly, whereby these models are more effective than conventional techniques when it comes to machine training and the permanent establishment of such capabilities. Naturally, we also want to make more extensive use of AI in our products as well. We believe there’s a lot of potential here, in particular with regard to automation, visual and voice detection, and machine learning – including deep learning – across all application areas.

  What does all of this mean for architecture?

Schmider: It presents a huge challenge, of course. All companies are being influenced by the digital transformation of business models and the development of new products and associated services. AI is an additional driver of the transformation here, and it’s also driving the development of new technical capabilities. A large number of companies very much want to use these new technologies, and it is here that enterprise architecture plays a key role. For example, we are working with the business organization and various IT departments to test new technologies and possibilities that we then verify with the help of specific use cases. Our goal is always to ensure that results are reusable and scalable. It’s essential here to examine both the affected processes and the required data using an integrative approach, whereby we design our reference architectures and reusable artifacts in a manner that also enables technologies to be scaled. We don’t want to have rigid governance and we don’t want everything to be micromanaged. Instead, we want to offer guidelines that everyone can use as a basis to simplify global cooperation and promote speed and scalability. Those of us involved in enterprise architecture are working intensively on integrating and scaling new elements more rapidly and making expertise available around the world.

You mentioned something about no central governance? How would that work?

Schmider: Governance remains central but we won’t be putting up any more stop signs, by which I mean we are working closely with the strategy units at the technical departments and with digitalization and IT innovation management organizations to define target architectures and guidelines for structuring and managing changes. New demands and solution preferences will then be aligned with these target architectures and guidelines. The use of existing capabilities and the establishment of new ones will become more transparent and understandable as a result, which in turn will promote reusability and scalability. This approach will enable us to use existing capabilities, technologies, and solutions much more extensively on the federal and global levels, and also develop them further. Our EA repository forms the foundation for management and collaboration here, whereby the repository is embedded in a suitable framework.

How does this type of governance differ from the governance systems you’ve used in the past?

Schmider: The micromanagement approach used in the past no longer works in today’s dynamic world. That’s why we no longer speak of firm rules but instead of guidelines within whose boundaries the various IT units can operate freely. Our goal is not to prevent certain things from happening but instead to collaborate with our colleagues around the world – after all, innovation takes place everywhere around the globe. The key here is to arrange these innovation processes in a manner that ensures everyone throughout the Group can benefit from them more quickly than has been the case in the past. You need to use a federal, decentralized approach here. In other words, the central EA team should ideally act as a hub that quickly makes successful innovations available throughout the Group. This increases the rate of innovation and adaption. We’ve developed an EA framework that focuses on this collaborative approach, which emphasizes not only participation but also sharing.

Does collaboration only apply to IT?

Schmider: No. Enterprise architecture is closely intertwined with data architecture, processes, and business strategy, of course, whereby EA is very proactive. We start before demand begins. We’re not interested in examining requirements. Instead, our approach begins where requirements are being formulated, which means our requirements become more targeted and our systems and services therefore become better. This brings EA closer to business operations and organizations because everything we do is geared toward faster implementation of whatever measures are deemed necessary.

Are you saying that enterprise architecture goes into action even before development begins?

Schmider: Ideally, yes, or at the very least we can contribute our input at a very early stage of development.

That sounds pretty simple.

Schmider: Maybe, but the fact is that there’s really no point in making things more complicated than they need to be. Still, we also need to deliver, of course, and initiate a technology push in which we intensify our dialog and exploit for our business operations the potential offered by the new IT approach in combination with our initial experiences and our understanding of EA. That means we’re brought in at an early stage, or that we bring other organizations in at early stage, in order to achieve an optimal result. It’s a question of balance. Certain things can be left to run on their own sometimes; you don’t always need to monitor and control everything. In these dynamic times, you have to stay focused and ask yourself which things you want to be involved in. In order to answer that question, it helps to concentrate on the developments that have the greatest impact.

How long has Schaeffler been utilizing this new type of EAM approach?

Schmider: We established it in January 2018. I myself joined the company in January and was responsible for setting up our enterprise architecture system. Schaeffler had been working with initial EAM approaches before that, but it wasn’t until the dedicated establishment of the EAM function that such approaches were systematically pursued and implemented. We now have ten enterprise architects whose work is aligned with that of our IT domains. Each of our architects focuses on a different functional domain such as HR, finance, sales, etc. They also have a second area of focus that involves supporting the demand organization, and a third area that addresses the development of new solutions and innovations and their architectural scaling and integration.

Collaboration is very important to you. How do you ensure successful cooperation with other departments, units, etc.?

Schmider: By pointing out the value and benefits that result from cooperation with our organization. This works best when we use our expertise to help get projects implemented more quickly. We do this, for example, by rapidly incorporating new ideas into pilot projects in order to highlight their value and thus demonstrate the benefits they offer. My boss is the Head of Strategic IT and reports to the Chief Technology officer. This setup ensures short lines of communication and makes it easier for us to effectively position and prioritize projects that will have a major impact.

Could you please complete the following sentence: The most important thing about enterprise architecture today is...

Schmider: The most important thing about enterprise architecture today is its ability to transform technical possibilities into business value. We need to build a bridge between technology, IT, processes, data, and the additional value they all generate for the business. As a business enabler, we also need to build this bridge quickly and in an agile manner, and make sure it’s sustainable as well. We are navigators and guides in a fast-moving environment.

Is there one architecture project currently under way that’s more important than any other?

Schmider: There are actually several, to be honest. For example, we’re currently developing the new IT target architecture for our production plants. This architecture takes into account the transformation of our product portfolio, the production of complex physical, mechatronic and, increasingly, intelligent products, and our global footprint in the overall supply chain. We’re also now updating our complete SAP process backbone, which handles 97 percent of our business processes and operations. Along with the optimization of processes and systems, we are also looking to make our server architecture more flexible and modular and to integrate new digital capabilities from the very beginning. The transition from the old structure to a new one will take several years, which is why the technical coexistence between, and the integration of, the old and the new will remain an exciting challenge for us.

Joachim Schmider, Vice President IT Architecture, Schaeffler AG 
Photo: Schaeffler AG

No more stop signs.