1. BMW Group ITRC May 29, 2008 Page 1 Collaborative innovation between Automotive and IT industry. Dr. Joachim G. Taiber Information Technology Research Center

2. BMW Group ITRC May 29, 2008 Page 2 BMW Group. Innovative brands.

3. BMW Group ITRC May 29, 2008 Page 3 Innovation by IT. IT is an innovation factor both in the vehicle and in automotive business processes.

4. BMW Group ITRC May 29, 2008 Page 4 The digital lifestyle. IT is impacting our personal and business lifestyle.

5. BMW Group ITRC May 29, 2008 Page 5 The traditional Automotive supply chain. Is part oriented and IT is used to optimize the supply chain processes. Source: Activplant

6. BMW Group ITRC May 29, 2008 Page 6 The new Automotive supply chain. Is used to deliver software, IT services and digital content to the “connected vehicle”. The “connected vehicle” Location based services Telediagnostics Access to corporate data and applications/services in the corporate network Mobile payment for digital content, software and IT services Access to private data/applications/services in the home network Access to public data/ application/services in an personalized rendering format in the cloud

7. BMW Group ITRC May 29, 2008 Page 7 The new role of the enterprise IT. The enterprise IT becomes a critical element in delivering services to the “connected vehicle” mutual dependency The “connected vehicle” Enterprise IT as “corporate cloud” Connected devices Homenetwork as “private cloud ” WWW as “public cloud ” Access to corporate IT services (vehicle diagnostics, customer data, hosted services for the customer, provider of trusted digital content and software, vehicle related data) Access to vehicle systems and onboard information Access to driver specific data and device-specific applications and services

8. BMW Group ITRC May 29, 2008 Page 8 The new innovation partnership. Business and IT as innovation partners. Source: Gartner

9. BMW Group ITRC May 29, 2008 Page 9 BMW Group‘s approach to innovate via IT. Active Innovation Management (AIM). The main goals of AIM are: To identify co-related business and IT innovations at an early stage To assess the potential of these innovations in close collaboration between business and IT To assign innovation projects to suitable research locations To transfer innovations to working solutions in the business

10. BMW Group ITRC May 29, 2008 Page 10 Active Innovation Management. Key issues addressed by AIM. AIM is trying to reach the main goals by: Implementing cross-functional IT scouting Cooperation with innovative IT companies Defining IT research focus areas Bundling resources to work on IT innovations

11. BMW Group ITRC May 29, 2008 Page 11 The Information Technology Research Center. ITRC is used as a location for AIM. IT data center IT research facility

12. BMW Group ITRC May 29, 2008 Page 12 BMW Group‘s innovation network in the USA. The ITRC is the latest node in the innovation network. Technology Office Palo Alto Technology Office Palo Alto Design Works Newbury Park Design Works Newbury Park ITRC Greenville ITRC Greenville

13. BMW Group ITRC May 29, 2008 Page 13 The BMW plant. The ITRC is located close to the BMW plant.

14. BMW Group ITRC May 29, 2008 Page 14 BMW‘s partnership with Clemson University. The International Center of Automotive Research (Groundbreaking in 2003).

15. BMW Group ITRC May 29, 2008 Page 15 BMW‘s partnership with Clemson University. The ITRC was the first building on ICAR (2005). 15min to plant (W10) I-85 ICAR: International Center of Automotive Research

16. BMW Group ITRC May 29, 2008 Page 16 BMW‘s footprint on ICAR. ITRC and Graduate Engineering Center (GEC). Quelle: CU-ICAR ITRC GEC

17. BMW Group ITRC May 29, 2008 Page 17 The challenge in 2005. Establish the ITRC as innovation platform both for business & IT. ITRC GEC 2005 Build the network, fill the project pipeline, prepare operations, test concept with small projects 2006 Implement projects, start offering research services, negotiate research partner agreements, position ITRC 2007 Transition from start-up phase into operational mode, settle framework & processes 2008 ff Establish the ITRC as permanent innovation platform for Business & IT within the BMW Group organization Excellent relation- ship with Clemson Respected project partner of Business & IT within BMW 1 st class address for IT industry to work with

18. BMW Group ITRC May 29, 2008 Page 18 Bridging the worlds of Automotive Engineering and Information Technology Let BMW Group leverage on the powerful and innovative North American IT industry Strengthen BMW Group’s capability to work cross- functionally and distributed Increase the agility of the business and IT by doing joint research with IT vendors Support the convergence of Vehicle IT and Business IT Help ICAR to get a world-class player both in academia and industry ITRC Driven by BMW Group’s business needs Driven by academia’s research interests Driven by IT supplier’s innovations Driven by short- to midterm implementation opportunities (1-3 years) The Information Technology Research Center. What is the value contribution of the ITRC?

19. BMW Group ITRC May 29, 2008 Page 19 IT Research Office Identifies, helps initialize and supports ITRC projects and integrates project partners Provides a virtual and physical collaboration platform BMW-internal departments 1 st class national and international universities Main campus ICAR IT partner companies* AIM focus areas *current list of partnerships in IT research includes Apple, CA, Cisco, HP, IBM, Intel, MS, Oracle, SAP, Sprint The Information Technology Research Center. A US-based IT innovation platform.

20. BMW Group ITRC May 29, 2008 Page 20 Active Innovation Management. IT research areas. Emerging technologies & trends Data management Collaboration Car2infrastructure High Performance Computing Security & Privacy Portals & site technology Virtualization including servers & storage Mobile & wireless technologies Media & communication Consumer electronics & entertainment

21. BMW Group ITRC May 29, 2008 Page 21 Primary benefits for ITRC partner Early involvement in research and build project activities of strategic relevance Improved involvement of the US R&D and project service organization by assigning US-based key experts to ITRC projects Lower project cost due to US location versus overseas engagement Use of the ITRC as communication platform for IT innovation Primary benefits for BMW Group Improved access to key knowledge by working with US-based IT companies on US ground Acceleration of adoption of new IT methods and standards into the BMW Group Local availability of BMW business and IT know-how Better use of joint project funding opportunities in key technology areas Key success factors – Strong focus on concrete projects that bring tangible value to the business (no high level research) – Apply professional project management methods (project reporting/tracking/monitoring) – Secure sponsoring & commitment of senior management to support project initiatives and allocate resources – Develop a solid framework of templates where legal and procurement issues are properly addressed The Information Technology Research Center. Mutual benefits & key success factors in a collaborative research approach.

22. BMW Group ITRC May 29, 2008 Page 22 University & IT Partner Resources Research Associates incl. PhD Management Team The ITRC model. Team & project structures.

23. BMW Group ITRC May 29, 2008 Page 23  User Help Function | UMPC and Mac  Crion Table/Collaboard  vPro for Enterprise Management  SAP on Intel (Windows and Linux)  Server Virtualization  Integration of 802.11n in the BMW infrastructure  WiMAX Communication “B2V” Doing Proofs of Concept (PoC‘s) is a key service at the ITRC. Examples.

24. BMW Group ITRC May 29, 2008 Page 24 The Automotive ecosystem will change – by bringing IT services to an “always on” vehicle requires a new supply chain of IT service providers, IT application providers and IT content providers By providing IT services to the customer in the vehicle new business models and revenue streams can be realized The role of the Enterprise IT is to make sure that the IT services are delivered to the connected vehicle in a reliable, robust and secure manner The role of IT in re-inventing the Automotive business model. Connecting IT services to the vehicle.

25. BMW Group ITRC May 29, 2008 Page 25 Imprint BMW Group Communication BMW Group IT 80788 München Reproduction, even in parts, must be approved by Bayerische Motorenwerke Aktiengesellschaft, München ©2008 Bayerische Motorenwerke Gesellschaft Thank you for your attention.