The night before we meet Jeremy Vincent, CIO of luxury car manufacturer Jaguar Land Rover there had been a technological problem on one of the production lines. For any CIO and any manufacturer this is an issue, but for this British manufacturing institution the enormity of the problem is amplified because around the world there is a hunger for its products akin to that of the big cat which Jaguar is named after.
Vincent explains that Jaguar Land Rover (JLR) is on full shifts “running flat out” and cannot afford a loss of production overnight, which would result in around 200 vehicles not rolling off its production lines in the Midlands at Coventry or Solihull.
In the last 12 months JLR has doubled production, manufacturing in excess of 300,000 vehicles from three plants, with 80 per cent of that product heading overseas. Profit before tax in 2010/11 was £1.5bn and since India’s Tata took control of the company in 2008 the car maker has been recruiting, adding much-needed manufacturing jobs to the national economy.
Vincent talks of the company with the sort of passion its cars foster from enthusiasts as he explains how JLR has grown to offer nine different product lines and has ambitions to offer 14 by 2015.
“We are now on an aggressive and ambitious growth strategy to double our vehicle volumes to 850,000,” he says. The Range Rover Evoque launched last year will be joined by a recently announced F-Type Jaguar sports car as well as all-wheel-drive versions of the XJ and XF saloons. Land Rover will also increase the number of two?wheel-drive vehicles it offers.
Ratan Tata, head of the Indian firm recently told a national newspaper that when Tata acquired JLR it didn’t seem able to consider and create its own destiny. Initial fears were that Tata would shift manufacturing to India to save costs, and although global expansion of the manufacturing is being considered. A letter of intent and investigation into a Saudi Arabia plant are currently being analysed as JLR in the UK expands to meet growing demand.
Interviewing Vincent, it soon becomes pretty clear that this business leader is clear about the destiny of JLR. His peers describe him as ‘a force of nature’ and exactly what IT at JLR needed in the post-Ford ownership era.
Vincent and the executive team are bound to be enjoying the renaissance of luxury British-made cars, but they are also realistic about the challenges they face.
“Volatility in currency and commodity prices, changes in the Chinese economy and the eurozone crisis are all threats,” he says. “Plus we are highly regulated for safety, emissions and we are always compliant in all territories.
“We have to recognise the consumer pattern for smaller, more fuel economic and environmentally friendly vehicles and I think we have done a good job on cars like the new Range Rover,” he says of the vehicle launched in September 2012 that now uses a 100 per cent aluminium chassis, removing half a ton of weight from the model it replaces and thus using a smaller, more fuel efficient engine with no loss in performance.
Vincent also believes that JLR has matured from an organisation that has always been feted for engineering excellence to one that is also focused on the ‘vagaries’ of the market and consumer aspirations. For the CIO and his business leadership peers, that has meant enabling JLR to feed those vagaries back into the production cycles to meet the changing needs of customers. The launch of all-wheel-drive XF and XJ saloons will create market opportunities in North America where it’s said that 90 per cent of cars sold have all-wheel drive.
Turning it round
US vehicle manufacturer Ford sold JLR in March 2008 to Tata in a £1.15bn deal that was less than Ford paid for the two brands. Land Rover was profitable, but Jaguar was not, and the following recession didn’t make life any easier for the manufacturing world.
“In the year 2009 to 2010 I had almost no budget for strategic and tactical growth, but for the year 2012/13 it is a very different picture,” Vincent says. “2009 was a horrible year and Tata really helped us with major support.”
Vincent joined in 2008 to take the CIO steering wheel just as JLR split from Ford. CIO headhunter Alan Mumby called Vincent with two roles he had on his books – the Hydrographic Office or JLR.
“That’s the job for me,” was the CIO’s response and nearly four and a half hard years later he is still in Coventry and clearly enjoying the high-geared pace.
“I knew what to expect when I joined. One thing that I have noticed is that there is a lot in common between manufacturing and FMCG or other sectors,” he says of his previous roles with EMI Music and Allied Domecq.
“The IT needs to consolidate and most big international companies have arrived at a point where they are carrying massive islands of technology, so they have too much knitting. The sale agreement imposed certain restrictions: for the most part it would be a clone of the Ford systems recreated in our own domain. In the summer of 2008 there probably wasn’t a weekend when the teams at Ford, JLR, Fujitsu, IBM were not pulling a suite of applications out of Ford. We had 11 groups of applications being brought out.
“While we were doing that I was working in the background to execute the strategy. We have joined up a lot of processes now and have better visibility controls across the business,” he says.
That visibility accelerates JLR’s plans to simplify its operations as it increases its product range.
“We make cars. It is a complex business and Jaguar Land Rover had made it more complex than it needed to be.
“We have lots of internal plans to be more efficient with lower fixed costs, and we have lots of plans to improve launch to shipment,” he says of an issue that has blighted the motor industry for years.”
Vincent explains that rivals Audi bases its models on far fewer platforms – the basic foundations of a vehicle such as its chassis and wheelbase – than JLR.
“We want to consolidate the platforms with base data and geometry. We used to have one platform per vehicle.
“As CIO I like to think we have a good business-aligned strategy,” he says. Vincent likes to draw diagrams to explain his points and as we drive deeper into this strategy he splits his notepad into a four-box grid to represent the legacy IT, modernisation, continuous improvement and innovation elements of his role.
In ‘legacy’ Vincent is tackling the traditional raft of clients and networks. “We have a lot of that. I still have to operate it and a key dimension of the job is to operate that with no business disruptions,” he says.
Cost reduction and convergence form the gears of ‘modernisation’ and data quality is the fuel of Vincent’s ‘continuous improvement’ plans.
“How we can use technology to add serious competitive ability and make a difference to the business,” is Vincent’s definition of the vital fourth ‘innovation’ square, and this is the one that you can see really turbo charges the CIO.
“We have a strategy that is doing the right amounts of stuff in all of these areas,” he says, going on to explain the importance of working on all four.
“There is some rationalisation taking place, but we need to land the new transformational technology to get to decommissioning. Rationalisation and simplification are important, but they are not the primary drivers.
“The primary driver is delivering an architecture that is fit for purpose to go to become a truly global company,” Vincent said in the interview, shortly before the company announced its possible plans to open a factory in Saudi Arabia.
From email to Gmail
“I took the decision [to move to Gmail] because we had to move fast,” he says of the decision he made as JLR exited Ford ownership and systems. Today JLR employees use up to five different Google applications.
“We mandated at the start that people use Google Mail and Calendar. We are not mandating the others, instead we see how it goes, but every time I go into the Google environment I’m impressed by how much is in there.
“We have a Google group for the management team for sending official attachments,” he says, underlining the trust JLR has in the provider.
“We haven’t invested in training, people use Google at home,” Vincent says. This view influences his attitude towards the buzz terms ‘cloud computing’ and ‘consumerisation’. Gmail has 420 million global users, but Vincent is only interested in the business benefits Google or SaaS offer JLR. On consumerisation, he accepts that many JLR employees will have better IT at home than at work, and again it reinforces his belief in having a strong relationship with Google.
“Google provides service to tens of millions customers, they do it securely and with good performance. Corporate IT needs to act like Google,” he says.
As part of the Tata group, JLR has taken the opportunity to use the systems integrator services that its IT service subsidiary TCS is known for.
“I think of Tata as our owners and investors. That doesn’t mean they dictate. As business leaders they let us do our thing and get on with it. We are profitable and considered a jewel in the crown.
“In IT I made a specific choice to leverage IT capability where I can from within the Tata group, not to do favours, there is the same tender process as any vendor has to go through.
“This autumn, after two years, a deal was done with TCS to operate parts of the legacy estate and for them to engage in our global SAP programme. The main reason for this is that TCS are good at it and they have global reach, which I don’t.
“In three years’ time when we are a global firm, that will raise the level of complexity for our inbound and outbound supply chains as we will be shipping bodies and components and our current systems are not fit for that. So now we can make our IT enterprise scalable and we need a modern IT architecture to do that,” he says.
The challenge for Vincent and the JLR management is that creating the IT architecture to take the company global could be seen as syphoning fuel away from the programmes that will develop new products for the market. Vincent has secured £125m in capex funding.
“You couldn’t engineer, make or design these products with profitability without leveraging some serious IT. The example I always use of a business without having to make these IT investments is sheep farming. But no blue chip business can grow without these investments.”
Vincent explains that running a blue chip business that produces blue chip products means he has to have an IT estate of the same stature that includes 3D visualisation systems, geometry creation and safety testing systems.
Innovative use of technology doesn’t end with the creation of the product. Vincent’s team has been involved in the creation of virtual dealership experiences.
“As we increase dealers and as real estate around the world becomes more expensive, yet our vehicle lines are growing, how do we demonstrate the vehicles and configurations? We do it virtually,” he states.
Following a conversation with the CEO on this issue, a prototype virtual product creation and demonstration system was developed that provides JLR dealers with a life-sized, big-screen experience to configure a personalised Jaguar saloon car that is rendered right in front of the customer so that they can take a virtual tour.
“It had a wow factor and our global brand director realised we could use it for the launch of the F-type and then the new Range Rover and we built it on proven technology. It was used in front of the press at the launch of the F-type at the Paris Motor Show and orders were placed by customers that had used the system, which will now be rolled out.
Vincent reports to the CEO and says the pair share frequent frank discussions that lead to IT being used to accelerate the ambitions of JLR. Vincent relishes the challenge, yet sees the role of IT changing.
“I actually think anyone heading up IT today is in the middle of a time of flux and it will go on for a few years yet. The punching power of IT was in the IT department with the management of the desktop and knitting interfaces and that is where we have been for 25 years. Those leaders are my age and they have lived the journey that I have been through.
“I’ve got to where I am, but there has to be a new 21st Century IT that is about doing things in a better way to beat the competition.
Technology capabilities had always been less than the business problem that IT had to solve, but that is changing and technology is on the cusp of being better than the business problem.
“As C-level executives we have seen technology not deliver, and now want a different vision.”
Critics have written off the UK car manufacturing industry for years, yet the recent performance of JLR has outmanoeuvred these views. Vincent, like his employers, is not afraid to ignore the mapped-out route and his frank appraisal of technology, suppliers and the CIO role has the boldness of lines of one of Jaguar founder’s Sir William Lyons’ breathtaking car designs.
CV: Jeremy Vincent
July 2008-present: CIO and President of India Operations, Jaguar Land Rover
2007-2008: Consultant, BEIG
2003-2007: Global Programmes Director, EMI Music
1999-2003: CIO Europe, Allied Domecq