Daimler’s CIO, Dr. Michael Gorriz, talks to T-Systems Senior Vice President Automotive, Luz G. Mauch, about trusting new technologies, the different speeds at which enterprises are adopting private and public clouds, and how in-car Internet connectivity will be standard by the end of the decade.

Dr. Gorriz, this year’s CeBIT is entitled “Managing Trust” – how important is trust, and how important are the nuts and bolts of business when it comes to topics like cloud computing?
Managing Trust is a phrase that’s open to interpretation. Trust is the result of experience. So my personal experience with a partner who is managing my data plays a key role. On the other hand, it’s vital to critically evaluate, in technical terms, the security offered by any given cloud architecture.

Analysts seem to be paying less attention to cloud computing. Is this an indication that, after all the hype, the focus is now on implementing real-life systems, that it’s time to move from words to action?
Everything that needed to be said about the cloud has now been said. And that is the point when we professional managers say: it’s time to get down to business. The hype is fading, the hard work now begins. It’s the cycle we see again and again with topics of this kind. And it is important to remember that the public cloud, not just the private cloud, is going to play a key role for us in the future. There are still some legal issues to be resolved; providers and user organizations have yet to agree on the small print.

Are conventional SLAs enough to guarantee the stability you need?
SLAs alone are no guarantee of stability. They are the first step, and just define the terms. On paper, SLAs invariably go too far from the provider’s point of view, and don’t go far enough from the user’s perspective. So, ultimately, they are always a compromise. But when it comes to cloud computing, the rules are a little different. Once you have a live system, you need to know what availability and response times you are actually getting. Because in the public cloud, downtime isn’t customer-specific; it applies equally to veryone. But in my mind, the availability offered by the public cloud is good enough for many purposes.

How do you collect hard evidence that an IT project is creating value?
That’s far more difficult than the actual project implementation work itself. The benefits may come directly from improved process efficiencies, or from the overall outcome of a project – for example, when we create an entire new facility like the one we’re building right now in Hungary. In this instance, we don’t attempt to establish a business case solely from the IT department’s point of view. But it’s a different story when we are upgrading IT support for a business process. Then, when the project is completed, we compare the costs of operations and processes before and after. Our goal is to achieve tangible savings. In our organization, that means savings in 50 percent of all projects.

You’re planning to transform Daimler’s IT organization from a service provider into a competence center for process consulting. How do you reengineer your IT so that it is a genuine business driver rather than merely responding to demand?
The role of the IT organization includes integrating processes across the enterprise. If we’re addressing issues that affect more than just a small group of users, then our team is asked to find a solution. This is nothing new, and this aspect of our work is set to grow in importance. Our mission for 2012 is to concentrate on service-oriented architecture (SOA) technology and business domain modeling for user departments. We’re focusing on structuring our operations. We discuss the available options for making our company more responsive and leaner across the entire Daimler group. And in that respect, it really is the IT organization that initiates the discussion, and brings up issues about who does what and how we execute our business.

What progress have you made with domain modeling?
We’ve made great strides with individual departments – engineering, financial control, financial services, procurement, and human resources management. What we’ve not yet done is create a consistent overall domain model. But by the end of the year, we will have put the foundations in place, and we’ll be using them to examine in detail how to make further efficiency gains across the entire enterprise.

On the subject of efficiency – Daimler wants to clean up the application environment and shrink it by 40 percent by 2015: how will that affect your colleagues in IT?
Providing today’s IT services with 40 percent fewer systems is not pie in the sky; it’s a totally realistic goal. We are working on a number of large-scale projects that will enable the replacement of many smaller systems. In after-sales, for example, the entire parts distribution process is being migrated to a single platform. Ultimately, we’ll have one large system in place worldwide, and will have eliminated numerous small ones.

Will your users like the changes, too?
Certainly. The IT department can’t accomplish this on its own. But more and more often at Daimler, we are bringing together business functions to be managed from a single point. And this makes it much easier to consolidate our systems. Because all managers want the same processes for their area of responsibility.

You mentioned your new facility in Hungary – how will you approach your IT in much bigger markets, like China?
China accounts for our highest growth rates in sales, production, headcount and IT. We have a very lean, structured systems environment there, because it was only set up in the last six years. A single ordering system, a single dealer-management system, a single system for production, and no clutter or muddle. The examples of Hungary and China show clearly that we have the right tools in place to adequately support the most complex, fast-growing business systems. That applies to the applications and to services such as desktop services, data-center operations, and software rollouts.

Part 2 of the interview