Volkswagen is not Microsoft

but it is in the software business

For the WSJ, William Boston reports,

VW executives have said publicly that VW remains committed to Cariad as a business unit. But the person said that the unit needed a new structure focused on fast, incremental software development in sync with the schedules of product launches at the brands. 

…The move to shun big tech software providers such as Google and Apple in favor of inhouse development was bold and risky. VW spent billions and had to recruit an army of software developers and coordinate efforts across its diverse brands. Despite the effort, Cariad got mired in the complexities of building advanced software, leading to a string of delays to model launches.

Back in December of 1997, I started posting essays on the Web. The very first one was called Your Bank is Not Microsoft. It concluded,

With the capabilities of generic software increasing rapidly, it is possible to imagine a bank without the large MIS department that until very recently has been a necessity. A bank that offers traditional services powered by computer applications based on generic software would be a formidable competitor. The banks that continue to think that they should invest in developing major proprietary software systems would be well advised to stay out of Microsoft's business.

I am not sure whether this applies to Volkswagen or not. A car these days is pretty much a fancy integrated computer system connected to wheels and an engine, so maybe you are in the software business whether you like it or not.

A bank’s computer systems are important, obviously, but they are not engaged with so many physical components. The bill-paying software and the software for the ATM do not have to take into account the design of the physical bank. So the bank can take off-the shelf software, slap a coat of paint on it to give it a brand identity, and do just fine. I’m not sure that a car company can do the equivalent.

Maybe if your goal is a self-driving car, the companies that have a head start on trying to build that are worth partnering with, rather than trying to build your own from scratch. But otherwise, I can see why you would feel a need to do as much as you can in house.

I suspect that at VW the fault is with the business culture, and the software executives are just the fall guys. It gets back to An organization gets the software system it deserves.

I imagine that nowadays you have to run a car company like a software company. You need to focus on keeping the functionality under control. You need to resist having too many different versions of the car, too many bells and whistles, and too many interdependencies. Be clear on what’s a must-have and what’s a nice-to-have.

You need a rigorous change management process. You want to start with a feature set that you know “works” in the sense that customers are satisfied with it. Don’t make unnecessary changes. And test those changes. Maybe release a “beta” version of a car to a few customers before you decide on the final specs.

You need a strict schedule of release dates for features. The designers need to think in terms of “The 2024 models will included a, b, and c, but d will have to wait for the 2025’s.”

Yes, I am sure there are software development techniques that can help. But if the business is chaotic, the software will never catch up. And while I know nothing about Volkswagen’s business processes, I would bet—based on their problems with software—that those processes are more chaotic than at other auto firms.

This essay is part of a series on human interdependence.