Information Technology (IT)

The Volkswagen Group is continuing to drive its transformation into a provider of sustainable mobility. IT is playing an ever more important role in this – used in our vehicles, across the Company and in opening up new business models.

Digitalized supply chains, automated and AI-optimized production processes, data-driven management of the sustainability targets and a seamless integration of analogue and digital customer experience are elements of this transformation.

Based on an in-depth review of the situation, the “IT” Board function has developed the NEW IT functional area strategy – a vision focused on the following topics:

• Updating, delivering and constantly improving highly automated enterprise processes and systems by means of a high-performance IT infrastructure with a cost-effective cloud-first approach that is resilient to cyber threats and designed to ensure data protection.
• Through agile development, the customer-centric development of IT products and digital services will facilitate continuous improvement and refinement and lead more swiftly to measurable business benefit.
• The systematic use and provision of data across the entire organization to optimize products, processes and corporate governance. Data is set to become a value driver for innovations, new business models, personalized customer contact and better corporate management across all brands and companies, whilst adhering to the relevant and applicable data protection requirements.

With the NEW IT strategy, the IT and data organization have been geared to the requirements of the coming years. Sprints focused on business impact and speed will drive the IT strategy in a consistent direction. The introduction of a new agile product organization will significantly accelerate the development and provision of digital products. IT and the Board functions will work together on new digital products in cross-functional teams, taking an agile and customer-centric approach with short development cycles. Systematically modularizing large IT programs using such sprints will significantly reduce the complexity of these projects. This will not only make the projects more efficient and faster to implement but deliver results and business benefits sooner.

By forging ties between the “IT” Board function and the chief information officers (CIOs) of the Core, Progressive and Sport Luxury brand groups and of Volkswagen Financial Services AG, we aim to ensure a uniform, strategic focus and to help promote the leveraging of synergies and the use of economies of scale. The systematic identification and Group-wide sharing of best practices – projects that have already been successfully implemented at individual brands or companies – provides for effective knowledge transfer within the Company, conserves resources and generates greater speed and efficiency. Creating transparency around IT costs across the brands and therefore throughout the Group is an essential factor in making strategic decisions for the future. A 50% reduction in the IT committee landscape also serves to accelerate this decision-making.

The availability of the IT infrastructure for all brands and companies is a high priority. The provision of state-of-the-art IT applications for digital collaboration and the expansion of options for conducting business on mobile devices are designed to improve productivity in the long term. Building on the rollout of Microsoft 365, even more functions for simple, digital collaboration throughout the Group were implemented in the reporting year. Furthermore, the implementation of a comprehensive Group-wide data strategy enables the generation of overarching benefits through data-based solutions and artificial intelligence. The expansion of strategic IT partnerships and cross-brand partner and resource management also secures external capacity.

Software development

The “IT” Board function is responsible for swiftly developing software and IT solutions for the Group based on the Group’s needs. Part of this development work takes place in the Software Development Centers (SDCs) around the world. The strategic goal is to safeguard and successively increase the proportion of in-house services relating to software products for critical business processes.

The optimization of processes and the definition of standards for software development remain at the forefront of our activities. Among other things, this entails international, data-driven management of activities in the SDCs, strategic alignment of the business-critical enterprise systems in accordance with the NEW IT strategy and safeguarding intellectual property in the form of software product source codes.

Use of digitalization and IT solutions

The Board of Management continuously monitors and supports the digital transformation. The Group Board of Management Committee for Digital Transformation addresses the digital transformation of business processes across brands and business units. It manages the IT project portfolio and fosters the digital cultural change as well as innovations and synergies between the Group and the brands.

Volkswagen embraces digitalization in the Company; its in-house Software Innovation Centers (SICs) are just one example of this. They act as centers of innovation and expertise, piloting new technologies with their know-how to fulfill the requirements of the different business areas in the Group, developing applications relevant for the Company and making these available for productive use within the organization. Here, Group IT, research institutes, educational institutions (such as universities), technology partners and policymakers work closely together on future trends in information technology. The SICs also use their network with start-ups to adapt innovative solutions to Volkswagen’s needs. This allows the experience and strategic expertise of a large company like Volkswagen to be combined with the pragmatism, the innovative ideas for new areas of business and the speed of young start-ups.

Highly specialized experts at the Data:Lab in Munich and Wolfsburg are involved in machine learning and AI solutions that have great potential, for example in production, logistics and quality assurance. The objective is improved human-machine collaboration to optimize processes, minimize errors and automate possible repetitive tasks, freeing up capacity for more valuable work. In the medium and long term, the aim is to enable cost savings, increased product quality and improved competitiveness.

The focus is on innovation projects such as Smart Quality Analytics (SQA) – an IT system used among other things to digitalize the analysis of field data. For quality assurance purposes, SQA records and analyzes the data from connected customer vehicles. This includes data from control units as well as error messages from workshops. Other projects are working on optimizing the order of individual working steps in vehicle manufacture (for example a painting sequence) to reduce production times and improve the use of resources.

In the field of machine learning, work is being carried out on smart management of energy use to generate sustainable energy savings and CO₂ reductions, for example in compressed air control systems. In addition, the SDCs are used to transfer knowledge throughout the entire Company on topics such as advanced data analytics (process for the systematic analysis of data in electronic form) and block chain (distributed ledger technologies) to make these new technologies available to the Group. Advanced data analytics are helping to optimize the storage of replacement parts in the after-sales business, for example. Likewise, numerous bot projects are being implemented to automate business processes (robotic process automation).

Production processes are also safeguarded by artificial intelligence and camera systems (computer vision). The systems and equipment in the factories are linked together in an integrated overall system. In conjunction with the different departments, Group IT is also contributing its expertise to the field of research and development, one example being EU projects. Digitalized work tools such as the “virtual concept vehicle” make the product development process faster, more efficient and more cost-effective, for example by replacing physical components with virtual components generated on the computer.

IT security

Safeguarding data and information throughout the Volkswagen Group worldwide is one of the main tasks of IT and was continued in fiscal year 2023 with the Group Information Security Program. The objective of the program is to create uniform processes and solutions across the Group to further enhance information security. The findings and solutions are being implemented within the Group successively. The main focus is on topics that could one day pose information security risks for the Group and that need to be specially safeguarded as part of the Group’s digital transformation strategy. The program’s content and orientation are reviewed annually and updated if necessary.

We are one of the first vehicle manufacturers to require our suppliers to have passed TISAX (Trusted Information Security Assessment Exchange) certification. This sends out a signal regarding the security of cross-company information and data. TISAX certification is an assessment method developed by the German Association of the Automotive Industry and is based on the international industry standard and the requirements of the automotive world. The aim is for sensitive data and information to be dealt with securely by our suppliers.

The task of automotive cybersecurity is to avert cyberattacks on our vehicles throughout the entire product life cycle, as well as on the digital vehicle ecosystem. The Group policies in the Volkswagen Group based on the legal requirements of the UNECE (United Nations Economic Commission for Europe) regulation have been implemented. Brand-specific organizational guidelines are being specified and implemented on this basis, taking the organizational circumstances into account.

To protect our customers against cyberattacks, and to implement our solutions in conformity with national and international legislation, we have established integrated, cross-brand, cross-regional security management systems for information and cybersecurity. The cybersecurity management system required by UNECE Regulation 155 received UNECE CSMS certification in 2021 and undergoes annual monitoring audits (most recently in mid-2023). Safeguarding the complete life cycle of our vehicles and digital mobility services has been part of standard operations since 2022.

Key central information security processes have been audited and certified in line with the international ISO 27001 framework. This is the most important cross-sectoral standard for information security and is our basis for building an appropriate information security management system for handling all sensitive information in the Group. This information security management system is being gradually expanded. It is audited annually and recertified at required intervals.

In recent years, the introduction of the data protection management system and the data protection management organization has thus established the infrastructure for implementing and complying with data protection requirements at Volkswagen AG in the long term. Increasing digitalization and interconnectedness of business processes, new legislative initiatives with data protection relevance, and the sharp rise in the extent of international data protection legislation continue to require a high level of attention to ensure ongoing compliance with data protection requirements. Continuously raising awareness among the workforce and further standardizing and automating processes remain the focus of activities. Compliance requirements are already being integrated into the design of IT solutions and infrastructure decisions.