Verner Baird, CIO at Bombardier Transportation, a leading manufacturer of rail vehicles, was appointed in addition to his CIO role to take over the responsibility for Bombardier’s digital journey. At Bombardier, he drives the digital transformation in a collaborative way, instead of setting-up a huge digital unit. In his new role as digital leader Verner Baird acts as an influencer, providing innovative ideas to the business as well as drives and supports the definition of digital strategies for each business area. Baird recently sat down with Cyrus Asgarian, a Kienbaum Partner and Executive Director, to share his thoughts on Bombardier’s digital journey.
Mr. Baird, digitalization emerges on top of your company’s President’s
agenda, who appears as a sponsor for all related initiatives. Therefore, your President kicked
off Bombardier's digital journey half a year ago. What was the reason behind
the decision to engage in digital transformation and what is the value you
expect to create out of this journey?
The rail industry is reinventing itself as a number of global trends including urbanization, and environmental concerns see a rather old rail industry now having a modern, green and innovative place in the future of cities. We will see a growth of mobility ecosystems where trains will sit alongside other modes, like autonomous cars, buses and bicycles providing individuals a wide range of choices to move around effectively. Digitalization will allow us to ease the passengers’ (the customer of our customer) A to Z journey as they move around, always connected as they go.
What is the main focus of your digital transformation at Bombardier? How do you define digitization?
We see two types of digitalization that can be broadly defined as (1) External Digitalization where new business opportunities will be created through connected trains, connected passengers, even the infrastructure around our trains will be connected to give a secure, info-tained, auto-paid passenger experience, and (2) Internal Digitalization where we will build digital platforms, in the cloud, to enable an efficient, paperless, mobile and social business along our value chain. This includes our factories that will be modern and automated lean through Industry 4.0.
Laurent Troger, your company’s President, appointed you in addition to your CIO role to take over the responsibility for Bombardier’s digital journey. What is the key difference between your CIO and Digital Leader role and do you see any role conflict?
I see a Bi-Modal high relevance with digitalization and IS/IT, in fact I believe that digitalization already transforms traditional IS/IT. For example, bringing a SaaS platform to a business function “digitizes” that function and brings speed, agility and standardization. In fact, “Appification" is, in my view, the only way forward if we are to keep up with the speed of change in IS/IT. In the end, there is no doubt in my mind that my digitalization role is a business role. In my career I worked for many years in engineering and manufacturing as well as IS/IT. So I do not see any conflict at all with digitalization and my IS/IT role as business and IS/IT continue to merge.
By bundling IT and digitalization under one responsibility, it is likely that digitalization and innovation projects will be strongly focused on in future, and that the IT core business could be temporarily forgotten. Do you see this danger as well?
For sure this can be a risk, however, I believe that bi-modal does not mean digitalization OR IS/IT, it rather means digitalization AND IS/IT as the way forward. In particular, internal opportunities for the value of everything from social platforms, e-learning, e-commerce, customer and vendor portals etc. are digital solutions layered onto our traditional PLM and ERP systems. So there is a codependence and a coexistence required. Our architecture gets layered new on top of existing.
How do you draw the line between digital and IT?
In general I don’t (see previous answer). However, if I was to single out where digitalization really differentiates, it’s all around data. In the past IS/IT has shifted focus along a technical and value evolution from hardware to software to service, and now we have to figure out what opportunities come from algorithms that convert data into information to bring new sources of value. This is the really exciting digital prospect for the rail industry and IS/IT can be a key driver of this.
In Bombardier, you drive the digital transformation in a more collaborative way, instead of setting-up a huge digital unit. In your role as digital leader at Bombardier you act as an influencer, providing innovative ideas and input to the business, but the ultimate accountability remains in the different departments within your company. Does this collaborative approach really work to drive the transformation forward? Why did you choose this approach and what kind of risks do you foresee?
This model keeps the accountability with business leaders to drive digitalization. I believe this is the correct model for a company with very strong business units and functions. The ownership of solutions is with leaders and the leaders drive the change towards their employees. Employees listen to their leaders, this is a fundament of user adoption. The main risk is that it can be difficult to get coordinated decisions, standardization and therefore speed to integration.
CDOs often comment that digitalization is a revolutionary leap forward, not an incremental step. What do you think?
I agree. Digital is a completely different way to address our business. It is a cultural change through technology, not a technical change. If you were born after 1990 (and you are probably then a digital native) then this is easier to grasp since this generation grew up with a smartphone full of apps in their hand and this leap is easier to understand and is even expected. However, for existing, maybe traditional, business leaders the impact of change can be like running into a wall. A new lens is required on that to really understand the shift.
Taking into consideration that Bombardier is operating in an industry which is rather traditional, one critical success factor in order to drive the digital transformation is to convince your management team of the advantages. Therefore, it is quite conceivable that you sometimes may feel like an evangelist in your role as a digital leader. What do you think?
I can relate to this, I spend a lot of time communicating and selling digitalization. For example, I have a slot in our bi-weekly President’s call to all management in Bombardier Transportation where I bring in new digital bets, the latest app of the month, thinking on Industry 4.0 etc. The response to this has been excellent with many people across the company bringing forward ideas, the latest start-up they work with etc. This is really buzzing at the Moment.
What is your approach to driving the culture change?
Digitize the top team first, sponsors own the change, communicate, build a network, connect, integrate, and go fast. Many small initiatives, quick wins (and get as many like-thinking followers involved as we can).
Digital transformation creates new forms of cooperation not only internally, but also with external partners. Do you also work with any start-ups?
We decided to run our own start-up program and have just completed our first round of scouting, filtering and pitching to our leadership. We have found a very rich pool of capabilities on everything from drones that can inspect trains, cybersecurity solutions, end-to-end journey digital platforms for cities and sensor and IoT solutions for rail. So we see such partnerships and co-operation as a fundamental building block as we move forward.
Last, but not least. Have there been specific tools, approaches, or methodologies that have helped you in the course of Bombardier’s digital transformation, and which would you recommend to other digital leaders undertaking similar journeys?
We define digital strategies for each business area, in fact Kienbaum supports this for our HR initiative, this helps build speed and direction. There is quite a layer of technology being built to enable our journey with apps and APIs on top of traditional systems of records. Projects need to be replaced with scrums that are agile, lean, and iterative and a data lake is key to becoming big data capable. We will build internal data analysts and scientists in a digital hub. I would also advise to visit local start-up hubs which are a great source of innovation, partnerships, events and digital energy.
The key is to stay open, and you will begin to know what you didn’t know about a new digital context, bring your President/CEO along the journey and most importantly, you can have some fun with it.