Analysis of IT Management and Future Direction: Volkswagen Report

This report provides an in-depth analysis of Volkswagen's IT management, focusing on its digital competencies, the implementation of artificial intelligence (AI), and the potential of quantum computing. It examines Volkswagen's efforts to modernize its IT infrastructure, particularly in response to past scandals and the evolving automotive industry. The report highlights the company's use of digital tools, centralized communication networks, and data analytics. It explores the implications of digital competencies, the evolution of quantum computing and its potential applications in traffic simulation, and the integration of AI in various aspects of the business, including robotics, quality control, and the development of driverless cars. The report also identifies missing issues and provides recommendations for future directions, emphasizing the importance of strategic planning, stakeholder communication, and risk management in the effective execution of quantum computing initiatives. The report draws from a CIO interview to provide insights into Volkswagen's strategic vision and technological advancements.

Management of information
system

Table of Contents
Introduction to IT at the company...................................................................................................1
Theme sections................................................................................................................................2
Missing issues..................................................................................................................................4
Future direction................................................................................................................................5
REFERENCES................................................................................................................................7

CIO interview Martin Hofmann, Volkswagen group 2017
Introduction to IT at the company
In today’s technological era it has been essential for companies to update their IT
infrastructure so that they can maintain quality of products and increase operational efficiency.
Auto mobile sector is highly impacted due to this. They have to install new technology in their
processing to maintain its quality (Link and et.al., SCIENCELOGIC Inc, 2017). Volkswagen is
a MNC that operates in different countries and manufacture variety of vehicles. In auto mobile
sector every company focuses on maintaining the quality of vehicles. They are also engaged in
designing of new models and implementing advance technology in cars. As Volkswagen is owns
many reputed brands, they also ensure that quality is maintained. The organisation IT history is
not so good but also no so bad. After the scandal they are highly focusing on testing part. For this
certain policies and guidelines are formed and followed with respect to international guidelines.
It is because of scandals which has happened in past. So, it reflects on poor use of technology by
firm. But with advancement in it, Volkswagen have made major modifications in IT
infrastructure. This can be analysed by way that now they use high and advance technology in
order to design and develop high quality vehicles. In recent time, organisation is engaged in
designing of driverless cars. They have updated overall IT infrastructure and are using advance
and new tools and equipment’s. This is done in order to retain the damaged reputation which
occurred due to emission scandal of 2014. They have updated their testing system. Now, robotics
is used in designing of cars and installing equipment’s in it. At each stage quality is evaluated
with set standards. Apart from it, automation is implemented in operations.
Furthermore, organisation is having a centralised communication network. Through it,
departments are interrelated and employees and manager interact with each other. An app is been
developed where data and information is shared quickly (Dumais and et.al., 2016). However,
organisation uses different types of tools and applications in various functions. Most of work is
done on systems. A centralised database is implemented in every country. It allows in storing,
updating, etc. of information. In a recent interview with CIO of Volkswagen it was identified that
company is working on implementation of quantum computing. Even there are different types of
information system which are used. For instance, EIS, DSS and other system are used by top
management to take effective decisions. Volkswagen provide after sales service online on their
website and through E mails. There is a CRM database where customer data and information is
1

stored. Organisation is having their personalized e mail system through which information is
shared. In addition data analytics technique is used for mining and warehousing of large data
sets. with it, they manage and access data of clients and customers.
Theme sections
Era of Digital competencies
In digitalisation era, it is very important for companies to utilise technology in
appropriate manner. This helps them to increase their efficiency and cope up technological
advancement. Digital competencies refer to use of effective and efficient use of range of digital
tools and equipment’s to gather data and information, communicate and solve critical problems.
There are many companies such as Google, Microsoft, Apple, etc. who are focusing on gaining
competitive advantage in terms of digital competency. This is strategy through which an
enterprise can create a positive brand image globally. It enables firm to establish a strong
network all over the world. Through this, various types of tasks can be performed such as data
collections, providing after sale service, etc. In addition to it, technology helps in solving critical
issues in systematic way (Pärn, Edwards and Sing, 2017). digital tools are usually used to
gather data. A firm gain digital competency when they cope with pace with technology by
updating their infra. In this many digital tools are used. So, when company is having proper
communication network, issues are solved quickly, etc. it assist in their gaining competency
digitally. Also, it has allowed them to initiate complex task which were not possible do by using
computers. With this they are able to achieve their goals and objectives.
In Volkswagen there is effective use of digital application and software. With this, they
are able to manage and control operations in proper way. The company have developed
application through which data and information is shared. There is proper network of
communication and problems. The CIO said that Volkswagen is adding quantum computing in
bolstering digital competency programme. So, its positive impact will be that company will get
more accurate data. It can be used to upgrading traditional system with new one.
On contrary, its negative side is its failure will result in loss. Also, it requires high and
advance tools to monitor and control it. For this more fund is required which will put burden on
Volkswagen retained earnings.
Evolution of quantum computer
2

Quantum computing is computing which is based in mechanical phenomena. It includes
superposition and entanglement. Usually, it is used in to perform long and complex calculations.
The processing is completely different from electronic computer as in this an interface is used
which combine results into more meaningful information. Alongside it, here particles are
represented as qubits which take value 0 and 1 or both simultaneously. This generates outcomes
into more precise manner. It is built with capacitors and transistors. The main use of quantum
computing is simulation. It helps in calculating large data sets within minutes.
The CIO view in regard to this is that he thinks quantum computing will be highly
beneficial in future. It will help in simulating traffic (Adams, Tenney and Pew, 2017). It will
enable in doing calculation and generating results through which traffic jam can be avoided. For
this Volkswagen collected data of about 10000 taxis. They got an insight about what data must
be acquired and how algo are structured to manage traffic. In future it will be considered as an
important vehicle technology. It is clearly said by CIO Martin that Volkswagen will implement
this technology. This is done to reduce complexity of tasks. Also, business aims to create
innovative application. It will enable in bringing tremendous progress towards technology in
future. He said that Volkswagen experts have developed and tested a traffic flow optimisation
algorithm with D wave. Martin said that now Volkswagen is focusing on making effective use of
strength of quantum computer. He added that technology implemented by Volkswagen is only in
narrow field. it is done for testing purpose. So, they are working on analysing strength of
technology so that it can be utilised in effective manner.
The positive thing of theme is that if implemented in vehicles it will support in simulating
traffic and avoiding traffic jams. This will result in decrease in pollution level. Also, people will
be able to reach destination within less time and fuel consumption. Also, it will help in
calculating problems instantly. On other hand negative point is installation of technology in
vehicles requires huge cost. this will lead to increase in price of goods. However, firstly the
traffic system has to be completely modified and no such system exists (Al Shobaki and Naser,
2016). So, it is difficult to install technology in vehicles. Another negative point is people are not
useful to use of advance technology thus, it is difficult to execute it. Therefore, these negative
aspects restrict industry to make changes in their vehicle.
Use of Artificial intelligence
3

The invention of AI has boosted world economy. It has created a platform for companies
to enhance their operational efficiency. Also, it has allowed them to initiate complex task which
were not possible do by using computers. With this they are able to achieve their goals and
objectives. AI is easily been integrated with internet (Artificial intelligence in business. 2018).
So, it has become easy for businesses to automate their functions. AI has also benefited in
increasing efficiency of employees. Alongside it, with less involvement of man power tasks are
completed within less time. The data analytics tool is used in mining data. Additionally, AI has
assisted in providing real time assistance.
Volkswagen is already engaged in using AI. They have implemented in many areas to
make it automated. Robots are been used in assembling of components. They are also used in
painting and designing model. Now, quality is been tested by systems in which AI is installed.
Besides this, there is huge change in way of performing activities. For testing of vehicles AI is
used. It gives overall rating of car by comparing it with set standards. So, it has made it easy to
test vehicles with same concept.
As said by CIO in interview, the integration of AI with quantum computing will be
highly benefited for auto mobile industry (Valacich and Schneider, 2015). The computers used
will give a faster output and optimisation. With help of it, critical problems can be solved easily.
Volkswagen is using AI basically to develop test driverless cars. AI is used in processing and
controlling of operations. He said that with quantum computing AI will be executed as well.
They will analyse machine learning, intelligent mobility, smart factory, etc. in the future. They
are planning to install smart mobility in their cars which will allow people to simulate traffic. He
stated that they are focusing on expertise and entrepreneurially applications.
The positive point of AI is it has enables in maintaining quality of vehicles by
determining variations. Vehicles are tested with set standards by automation system. It helps in
finding faults easily. Automation has made it easy in assembling different parts. Besides this, the
main advantage of using AI is, it has reduced cost of production. Due to this return on
investment has increased. Also, in less time more number of vehicles are manufactured.
Its negative point is high use of AI have reduced involvement of man power within auto
mobile sector (Costa, Codreanu and Ephremides, 2016). Due to this there has been rise in
unemployment. Furthermore, use of AI has increased cost per unit. Companies have shifted this
burden on consumers. They charge high prices from them.
4

Missing issues
In past Volkswagen have faced several issues related to technology. The most popular
scandal was of September 2015 when they violated US standards of emission. Due to this they
have to incur huge loss. Moreover, their reputation was highly damaged. The main reason behind
this scandal was technological issue and lack of communication. Thus, it is necessary for Martin
to focus on weak areas.
By analysing the interview, it can be identified that CIO Volkswagen missed out some
crucial points. First CIO did not stated issues related to quantum computing and how it will be
solved. Also, what are the risks associated with it and whether strategies are developed to resolve
them or not (Naser and Al Shobaki, 2016). The manager didn’t specify how quantum computing
will benefit company in long term. He should have described about what Volkswagen should do
to implement quantum computing in traffic system.
The CIO should address that how challenges occurred will be overcome. Beside this, he
must emphasise on how overall operations will be modified and controlled. In addition to it,
what policies and procedures are formulated and what measures will be taken in case of any mis
happening.
Future direction
It is important for CIO manager to focus on future so that quantum computing is
effectively executed. So, there are some suggestions that must be followed. These are as
follows:-
 The manager must focus on developing plan that how quantum computing will be
implemented. Beside this, he must develop strategies to keep pace with technology.
 The manager should communicate with stakeholders about future goals and objectives.
This will enable in collaborating with D wave company.
 Along with it, Martin should evaluate range of possibilities within company where
quantum computing can be implemented (Santoro and et.al., 2018). This can be done by
conducting IT audit.
 In future if any critical situation occurs a backup plan must be developed. It will be useful
in reducing negative impact on overall organisation operations.
 A forecast must be made that how training will be provided to employees and what skills
and abilities is required to handle and operate those systems. Moreover, what other
5

resources are required to get a deep learning about it and how it will work in field of
application.
 There must be certain policies formed which will give an insight to employees as well as
managers to use technology in proper manner.
 Volkswagen must collaborate with government and take initiative to modify traffic
system. It will encourage other auto mobile organisation to engage in it. In this way a
positive image of firm will be created in mind of people.
Thus, by focusing on these elements will help in collecting data and information that can
be analysed. So, it becomes easy for Volkswagen to progress towards use of quantum
computing. Manager will get an insight that in which direction or area they have to move.
6

REFERENCES
Books and journals
Adams, M.J., Tenney, Y.J. and Pew, R.W., 2017. Situation awareness and the cognitive
management of complex systems. In Situational Awareness (pp. 43-62). Routledge.
Al Shobaki, M.J. and Naser, S.S.A., 2016. Performance development and its relationship to
demographic variables among users of computerized management information systems in
Gaza electricity Distribution Company.
Costa, M., Codreanu, M. and Ephremides, A., 2016. On the age of information in status update
systems with packet management. IEEE Transactions on Information Theory. 62(4).
pp.1897-1910.
Dumais, S. and et.al., 2016, January. Stuff I've seen: a system for personal information retrieval
and re-use. In ACM SIGIR Forum (Vol. 49, No. 2, pp. 28-35). ACM.
Link, D.F. and et.al., SCIENCELOGIC Inc, 2017. Management techniques for non-traditional
network and information system topologies. U.S. Patent 9,537,731.
Naser, S.S.A. and Al Shobaki, M.J., 2016. Computerized Management Information Systems
Resources and their Relationship to the Development of Performance in the Electricity
Distribution Company in Gaza.
Pärn, E.A., Edwards, D.J. and Sing, M.C.P., 2017. The building information modelling trajectory
in facilities management: A review. Automation in Construction, 75, pp.45-55.
Santoro, G. and et.al., 2018. The internet of things: building a knowledge management system
for open innovation and knowledge management capacity. Technological Forecasting
and Social Change. 136. pp.347-354.
Valacich, J. and Schneider, C., 2015. Information Systems Today: Managing in a Digital World
Plus MyMISLab with Pearson eText--Access Card Package. Prentice Hall Press.
Online
Artificial intelligence in business. 2018. [online] Available through : <
https://www.nibusinessinfo.co.uk/content/business-benefits-artificial-intelligence>
7

8

9