Agility outranks a rigid strategy

Agility outranks a rigid strategy

Eco-friendly travel options are trending and Deutsche Bahn, the equivalent of the SNCF in Germany, focuses precisely on this niche market in Germany and neighbouring countries. The cornerstone of this offer is information systems, and kobaltblau assisted in developing the strategy.

14 guiding principles and strategic fields of action were developed jointly by kobaltblau and Deutsche Bahn’s mainline subsidiary (DB Fernverkehr). They channel future strategic direction. It is, however, the identification of specific measures for the implementation of this strategic orientation that played the most important role. Bernd Rattey, CIO of DB Fernverkehr, talks to kobaltblau about this project.

Deutsche Bahn is an important player among German mobility service providers. To what extent is digital transformation changing the market and what new challenges are being faced?

Regarding mobility, the fundamental question to ask is the following:
How do you get from point A to point B? This may seem trivial, but networking transport systems are our greatest challenge. The passenger wants to reach his or her destination as easily as possible. Integrated transport services such as the products of our in-house start-up ioki, which is working on on-demand mobility services by integrating all players, are therefore inevitable in the future. Similar to electric collective taxis which transport the customer for the last few kilometres to his or her exact destination. In Bad Birnbach, a town in Bavaria, we are also testing an autonomous electric bus.

So, the customer therefore becomes the centre of attention?

For some time now, we have been focusing on a customer-oriented interface. For example: the DB Navigator, which is an application with booking options and real-time information regarding punctuality, station or car signage. It is not only the purchase of tickets that counts, but also the networking of processes and IT applications. Hence the current relevance of IS strategy in solving these problems.

Has IT already reached a driving status in the development of the company?

From an internal point of view, it’s hard to judge, but I think the internal importance of IT has really changed. Just a few years ago, my predecessors were measured by how well they controlled costs or the availability of IT services.
While these were certainly important performance indicators for business activities, today the focus has shifted to other questions such as: How can we support end-to-end processes? To what extent have we improved customer satisfaction with the IT measures we have taken so far?
In my area of responsibility today, these questions are more relevant than saving 2% on costs.

In addition to operational processes, does IT also have an influence on a strategic level?

We have set up a digital strategy council with senior management and a manager for each division to discuss digital transformation issues on a regular basis. For me, this transformation is a joint product of business and IT.

The overall strategy of the Deutsche Bahn Group is defined in a strategic program. However, this mainly concerns non-IT related issues such as punctuality.

The strategic program focused on improving our service quality has been in place for several years. As far as punctuality is concerned, we require other business sectors of the DB Group for implementation: only together will we succeed. One of the punctuality factors, for instance, is the issue of capacity on the grid. Here, intelligent computing makes the use of the rail network more efficient.

This common approach makes it possible to ensure that the objectives of the global strategy are consistent with the IT strategy and to apply the latter to the various divisions.

Exactly. At DB Fernverkehr, in addition to our digital strategy consulting, we have established a performance dialogue at all hierarchical levels. This is not about finding an IT solution for personnel planning, but rather asking ourselves: Is the customer satisfied with the Wifi in long-distance trains and what needs to be optimised? The emphasis is on the strategic perspective and the measures required to implement this strategy.

Wi-Fi for long-distance travellers is an excellent example of extending existing products by adding digital services. To what extent does your IS strategy allow you to implement digital products in an agile manner?

I believe that rigid strategies such as five-year planning are outdated.
Today, agility and how we manage it is crucial. We have, for this reason developed guiding principles in our strategy. Explicit objectives such as punctuality and customer satisfaction are of course included. What we call the “Purpose”, i.e. the sense of action for the individual, is also important. Employees in IT teams often felt neglected. Successes were often celebrated by the marketing department, and failures often attributed to the IT department. It is important to say to each individual: “You are an essential part of the overall result” and not “We want to play a leading role in the platform economy.”

What is your personal view regarding implementation? Will the strategy be reviewed or updated in the foreseeable future?

We must systematically implement what we have written. I will not review our strategy every six months, otherwise we will not have time to implement it.
The strategy process for the whole outline division is reviewed every year, so our calendar is annual.

Aside from operational issues, time is limited for strategic projects – how does one reconcile strategy and implementation?

IT projects are never just my projects, they always go hand in hand with the jobs. The time element is often a struggle, because hardly anyone has time. However, it is clear that if a dedicated team spends a large part of its time on a project, the result will be more efficient than if many employees dedicate 20% of their time to 10 different projects.

On the one hand, we have defined the main projects that are subject to special monitoring by senior management: these contribute to the achievement of strategic objectives. There are often two project managers, one from IS, the other from the business departments. On the other hand, we have adopted a different approach when defining the IT strategy. Indeed, we have tried to work on the guiding principles in a very participative, even democratic form. To do this, we set up a team from the IT department on a voluntary basis while respecting the greatest possible diversity. The principle for participation was clear: only colleagues who could devote a significant part of their time to the strategic project could actively participate, without worrying about operations.

If you had to do it again, would you choose a participatory approach for the development of your IS strategy again?

Strategy comes to be even more important when we discuss new project ideas. Every new idea is challenged using our 14 guiding principles. For example, if I ask: “Your idea meets our expectations on principles one, five and seven, but it contradicts some of the other principles. How can this contradiction be reconciled in a potential implementation?” This is something specific and to answer these questions, we involve the employees.

You’ve already mentioned that you don’t have a five-year plan – can you nevertheless tell us where you are with your project in terms of long-term strategy?

Previously, we had two key competencies for each manager: financial resource management and human resource management. Information management will gradually establish itself as a third additional key competency.
In five years’ time, the organization as it stands today will no longer exist: it will be much more decentralized. There will be elements of control, but the basic understanding of how business and information technology work together will change dramatically. Our job is to accompany this transformation. That is why a uniform understanding of IT is one of our 14 guiding principles, because nothing is possible without it.

Thank you very much, Mr. Rattey, for your answers.