Deutsche Bahn CIO on track to decentralize IT

Bernd Rattey has been Group CIO and CDO of Deutsche Bahn (DB) since 2021, after being in charge of IT at subsidiary DB Fernverkehr AG for five years. And it was during that time he got to know the railways from a different business area. In his eyes, the entire DB group works like a federal system, made up of business units with their own design aspirations.

“An estimated 15,000 to 20,000 people work at Deutsche Bahn who spend their working hours on digital issues,” he says. This includes, for example, software development and demand IT. But there are also employees in business units who consider what processes should look like, and which products should be offered digitally. “Business IT, often referred to as shadow IT, continues to grow there,” he says.

On the demand IT side, there are multiple tiers, according to Rattey. Corporate IT is at the top, for which he’s responsible, and below are the growing business areas, which, in turn, have their own business units for IT.

“The organizational solution at Deutsche Bahn can’t be to centralize all digital projects,” he says. Since the business processes are closely interlinked with IT, the effectiveness of digital solutions in the business areas is higher.

In the past, group IT used guidelines and instructions to tell the business areas what to do. Rattey wanted to change that. “During my time at DB Fernverkehr, I saw this wasn’t always effective,” he says. “And I didn’t lose this view in my new role. The CIOs of the business areas are responsible for the IT in their business, and the AG provides the framework.” With this new direction, group IT in the future will only be applied to topics that work better across departments, as opposed to individual projects in the business areas.

Through the federal system, DB has created many decentralized IT islands, like different systems for personnel planning in the business areas. “I don’t think we’ll switch to a central solution because the business models, requirements, and culture are too different,” he says. However, what he wants to create are, among other things, technical platforms. DB acted on the subject of data lakes a few years ago and is developing IoT and AI applications on this basis.

Railway strategy is IT strategy

“I don’t have a classic IT strategy,” says Rattey. However, that doesn’t mean IT colleagues work as they want. The “strong rail” strategy, which also looks beyond the confines of DB to the entire railway sector in Germany, is decisive for the company’s IT goals. The aim is to make the means of transport more attractive, and to shift traffic from road to rail. This includes, for example, expanding routes, transporting more goods by rail, or more closely synchronizing long-distance traffic between major cities.

“None of this can be implemented without IT, so it plays a significant role in achieving the overall goal,” says Rattey. “That’s why our IT strategy is exactly that.” The strong rail strategy defines the tasks and the portfolio of the entire IT of DB.

“For me, the IT portfolio for the next few years and the IT architecture have taken the place that IT strategy used to have,” he adds. This view doesn’t position IT outside of the organization, but rather gives it central importance in the company.

IT as the fifth resource

According to Rattey, within the rail transport companies (Eisenbahnverkehrsunternehmen, or EVU), including regional, cargo, and long-distance traffic, four resources have to be controlled: the trains, the routes used, the personnel on the trains, and the maintenance works. “An EVU must control and design this production cycle,” he says.

With IT, a fifth resource has now been added, because the cycle no longer works without it. For him, IT isn’t about classic administrative tasks. Rather, it’s part of the production system that ensures that the trains run.

Individual business areas within the federal railway IT system can now design certain aspects themselves. “It’s not my job as Group CIO to tell them all the details,” he says. “However, there are issues that we can only do across the board.” For example, DB Netz is responsible for the routes and the carriers for the vehicles. However, because many operating processes run across several companies, IT must function equally. “So it’s our job to bring these things to the group level,” says Rattey. “In this way, we ensure that such network processes work across the board.” To help make such processes work, the railway IT uses a large SAP R/3 system in maintenance, which is controlled comprehensively, including the logistics to get parts. “We can only generate a benefit here by looking at the overall picture,” he says.

The challenge of punctuality

Another example of comprehensive IT revolves around punctuality. “A big driver of it is construction work,” says Rattey. Construction sites are controlled by DB Netz, but the passenger experiences the effects of this with transport companies such as DB Regio, long-distance transport, or an external EVU. “In order to avoid delays, data must flow comprehensively here,” he says.

Creating a deployment plan takes weeks, however, and if a construction site is announced at too short notice, the processes no longer work. A replacement timetable has to be drawn up, which increases the risk of delays. That’s why DB measures punctuality in many different places. Measuring points are, for example, the arrival at the platform, leaving the factory, or the journey time to deployment. And this data affects several business areas.

So Rattey’s team has developed an intelligent system for data exchange: the Consortium Event Broker. Everyone involved can access the information via mobile devices and see what they can do to influence the process. Management uses the data to identify structural weaknesses. This could be, for example, too few tracks or an unfavorable timetable.

And in the rail system consortium, all players are bundled that are necessary to serve this production cycle. This includes various business areas and also transport companies that don’t belong to DB.

Four levers for more efficient IT

“A few years ago, the top level of rail IT established an organizational governance that tried to describe things with instructions and guidelines,” says Rattey. “But if these were too detailed and rampant, not everyone would stick to them.” To counteract this, he now uses four levers. The first is business strategy, described above.

The second lever is governance, which the CIO makes leaner. “We rely on a few rules that we live by together and consistently enforce,” says Rattey. This became apparent when the Log4j vulnerability became known in December 2021. “Since just one gap would be able to jeopardize the entire consortium, I had to ensure that all business units acted quickly,” Rattey says, recalling issuing the order that if all internet-facing systems weren’t patched within 48 hours, everyone had to go offline. “We managed that professionally with the CIOs and CISOs of the business areas, and there wasn’t any objection from a group board of directors,” he says. “Everyone went along with it. I’m a bit proud of that.”

The third lever lies in the design and implementation. IT should change things together with the business. These include the Consortium Event Broker or the AI ​​Factory. 

The biggest issue for Rattey, however, was the switch to SAP S4/HANA. “In the beginning, the project was viewed more technically, but for me it’s business transformation,” he says. It also wasn’t just about a release change, but transforming processes and designing them across the group.

The IT team tackled this project in three blocks: the first included finance, procurement and controlling; the second tackled vehicle maintenance; and the third aimed at managing technical systems, such as switches and signal boxes. In order to change these processes, DB has to analyze all business areas where processes can be standardized and how this can be solved with an SAP product.

That’s why projects like this always have dual leadership at DB. On the one hand there’s a person with an IT background for the technical project management. On the other, an employee who speaks the language of the business is appointed as the business owner for the functional project management. This person should be assertive and understand how business processes work.

“It’s about creating something together instead of working against each other,” says Rattey. Either the process has to be adapted to the IT system or vice versa. “You always have to consider both and strive for the best solution. We reflect that with the dual leadership.”

And in order to finance overarching projects, the head of IT has also changed the distribution of funds. “Last year, in the early stages of budget planning, the board of directors decided to reserve a sum of money centrally instead of allocating resources top-down by division,” says Rattey. So a pitch process was set up for this multi-million amount, and each business area can now apply with projects that contribute to more punctuality for the rail system consortium, and the most promising proposals are included in the portfolio.

Lastly, the fourth lever deals with IT services. This includes, for example, office communication using Microsoft 365 or the cyber defense center. “We can provide these services better and more professionally centrally,” Rattey says. “In addition, it’s more efficient in terms of costs and required resources.”

According to him, however, the business areas aren’t obliged to use these comprehensive services—with the exception of cybersecurity and solutions for the consortium. This freedom increases acceptance. “It’s my responsibility to offer something the divisions are happy to use, rather than impose something,” he says. “We want the business units to come to the group IT because they believe we can do something they can’t do with their own capacities.” This goal was achieved, among other things, through leaner governance. IT is no longer an obstacle that sets countless guidelines, says Rattey. Instead, it’s perceived as an enabler. Plus, the pitch process for IT budgets helps build trust in the business areas where IT actually solves business problems.

Rattey also wants to change processes on the CIO and CDO boards. He arranges the members of the committee according to subject areas such as architecture, portfolio, or security, and each block is staffed by a dual leadership of the line-of-business CIO and someone from Rattey’s core team. “I expect the two to act as a team so IT and business pull together instead of raising concerns about each other,” he says.

In the end, however, digitization happens across the board. “As IT, we basically have to build structures that support our staff and our customers,” Rattey says. “And we have to give them a voice to find out whether we are successful in doing so.”

Business IT Alignment, CIO, IT Leadership, IT Strategy