How connected and self-driving car development has transformed Volvo’s IT strategy

Volvo is now dealing with some of the world's largest technology firms as it turns its attention to developing digital services

It has been claimed that all companies are becoming technology companies. And for car manufacturer Volvo there is certainly some truth in the idea, with demand for connected and autonomous vehicles having a huge impact on the role of IT within its organisation.

"Suddenly we are starting to build services not only for our twenty thousand-plus employees but for millions of users," said Jonas Rnnkvist, director of business development and strategy for Volvo's Consumer IT division, speaking at a recent Dell-EMC event at the firm's headquarters in Gothenburg.

"We are already providing services to one million connected cars, so suddenly we are not enterprise IT supporting our employees and B2B connections, we are an enterprise more like an operator supporting millions of cars and users dynamically, with our core systems supporting that."

There have been significant changes for tech staff at the company recently. Earlier this year, the Swedish car manufacturer agreed a deal to outsource its back office IT operations to Indian supplier HCL, along with the sale of its own IT services business. In the months since, it has announced plans to hire 400 software developers to create new self-driving and electric car technologies as it focuses internal capabilities on innovation and R&D around in-vehicle systems.

Read next: 100 self-driving Volvos to hit the streets of Sweden

As Volvo turns its attention to developing digital services, it has also found that its supplier relationships have evolved. This has meant that as well its interactions with parts suppliers - where it is firmly at the top of the food chain - it is now dealing with some of the world's largest technology firms.

"As a car company we always talk about tier one and two suppliers which provide components we can assemble in car and shift to the customer," Rnnkvist said.

"Suddenly we are in discussion with startups in Silicon Valley of new digital services and we are facing big companies like Google and Apple that provide Apple Car Play and Android Auto. They are much larger than we are so we are not on top of the food chain anymore. We can't force Apple to do things."

The pace at which third-party services are appearing means that Volvo is required to keep up with developments outside of the car industry.

"Things are changing fast," said Rnnkvist. "Spotify is a great thing to have with the cars, but what will be the major function or service that people will like to build in three years?

"That is difficult for us to plan for and to make our products good enough for customers because they are measuring the products from the digital point of view, not only the car point of view as of today."

This places pressure on the IT team to move much more quickly to create or integrate new services.

"Reduced time to market is essential," says Rnnkvist. "Traditional IT solutions for enterprise business applications can take some while to build. We need to be able to take things to market much faster. We can't wait four years to get a popular new service in place.

"For the in-car delivery service, we can't allow that to take four years from an idea to being productive. We need to build solutions and that can make this work much faster moving forward."

Yet legacy technology remains an obstacle. Volvo has a complex mix of systems that support the delivery of online services to cars across the world. This includes thousands of applications, including large, monolithic applications.

"We have everything to mainframes to more modern cloud-based services all in the mix," said Rnnqvist.

He added: "From an IT point of view we need to consider how we build things and rebuild things in future to meet the digital journey that is ahead of us.

"It is about separating and taking away some of the monolithic thinking we have of some applications to get hold of the correct data that we need, in order to provide a true online service for the customer."

This story, "How connected and self-driving car development has transformed Volvo’s IT strategy" was originally published by Computerworld UK.

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