This interview provides a comprehensive insight into the digital transformation in the Lufthansa Group and the crucial role of the Digital Hangar. The focus is on agile collaboration models, enterprise architecture and cloud technologies that create the cultural and technological basis for future innovations. The Digital Hangar is at the heart of this transformation and will make a significant contribution to the long-term competitiveness of the Lufthansa Group.

Christoph Fuchs: Mr. Spannbauer, can you tell us something about the context of the Digital Hangar and how the Lufthansa Group came to create this unit?

Christian Spannbauer: The Lufthansa Group has the Digital Hangar to drive digitalization forward holistically and strategically. The pandemic was a disruptive turning point that forced us to act even faster and develop a clear, focused approach to digitalization – one that puts passengers even more at the center. Digitization must be understood comprehensively in such a context: it concerns the core business model as well as the underlying technology and architecture, the “operating model” (i.e. the way the teams work together) and, of course, the established culture. All these aspects must be considered holistically in order to achieve a sustainable transformation.

Christoph Fuchs: That sounds like an ambitious project. How did you go about initiating this transformation?

Christian Spannbauer: We deliberately decided against a “greenfield” approach. This would have given us the freedom to start from scratch – at least in theory. But in such a large and established group as the Lufthansa Group, this is simply not realistic. Instead, we have opted for an integrated transformation that runs in two strands:

The first strand is the medium to long-term renewal and streamlining of our existing IT architecture. This includes, for example, the consolidation of various data warehouses into a central data platform. Enterprise architecture plays a central role here in reducing complexity and gradually modernizing existing systems.

The second strand concerns more short-term measures: We have created a technical abstraction layer that allows us to develop business logic, for example, without having to intervene in the old legacy world. While this has created additional complexity, it has also given us the flexibility we need to decouple the teams from each other and enable parallel work.

Christoph Fuchs: This is somewhat reminiscent of a classic 2-speed approach, in which old and new systems are operated in parallel and you end up with two separate IT departments. Was this a conscious decision?

Christian Spannbauer: In fact, we deliberately decided against a classic 2-speed model, as we are convinced that only a holistic approach that adapts the approach (agile/non-agile) to the respective task will lead to success in the end. In the case of plannable tasks or if time-to-market is secondary, we equally choose a classic project approach. It is important that the chosen approaches do not imply any evaluation of the teams. Another important goal was to create a clearly defined target image together so that all teams know what they are working towards. To promote cross-disciplinary exchange, we have established “Communities of Practice” in which an exchange takes place regardless of team membership. In this way, we have managed to combine both worlds and establish a common understanding of the goals of digitalization.

Christoph Fuchs: That sounds like a demanding task for management. How did you overcome this challenge?

Christian Spannbauer: Management plays a decisive role in such transformation processes. The understanding of management as a mere ability to manage teams is no longer adequate in this area. Especially in the past, managers were often seen as generalists who took care of “people issues”. But that is far from sufficient in such a context. For a successful digital transformation, it is essential that managers also bring a strong content perspective (“thought leadership”) and actively shape the technological and strategic direction. They must be able to understand the challenges of digitalization and develop solutions together with the teams. Without the necessary expertise and understanding of the interrelationships, it is almost impossible to initiate real change and transformation.

Christoph Fuchs: What exactly do you mean by a “real transformation”? How can you tell that an organization has actually made this change?

Christian Spannbauer: A real transformation cannot be measured by implementing agile methods or frameworks alone. From the outside, two organizations that work according to agile principles can look very similar: both work with Scrum, have appointed product owners, and conduct sprints. But that doesn’t necessarily mean that both organizations are truly agile. The difference often lies in the subtleties of the way they work. Do the product teams really work with equal members on an equal footing? Or is there one person who de facto dominates the team and enforces a classic waterfall model? Often, the agile approach is reduced to the iteration of software delivery (i.e. the actual implementation in code) instead of starting with exploration and solving the overarching challenge. In these cases, the result is often that numerous features – i.e. new functions – are integrated into the software, but their relevance for the customer or the challenge to be solved is not guaranteed. An organization that works in a truly agile way empowers teams to act autonomously, but not uncoordinated, and to take responsibility themselves. This is illustrated by the principle “you built it, you run it, you own it”.

Christoph Fuchs: What is the decisive difference in the way the Digital Hangar works?

Christian Spannbauer: The main difference is that we give our teams clear goals (“outcomes”), but we don’t tell them how they should achieve these goals. We focus on empowerment. This means that the teams have the freedom to develop and implement their own solutions. Management creates the framework
conditions and ensures that teams have the necessary resources and tools to do their jobs successfully. We’ve found that this approach leads to more innovation because teams aren’t constrained by bureaucratic processes or rigid constraints. It’s about delivering results – the ways to get there can be designed flexibly. Nevertheless, it is important that the teams proceed methodically, e.g. choose appropriate metrics to track and ultimately ensure the achievement of goals. This is the real performance and innovation booster.

Christoph Fuchs: Can you give an example of an innovation that has emerged from this type of cooperation?

Christian Spannbauer: A good example of this is the development of our new Lufthansa app. Our teams, which include experts in user experience (UX), development, and product management, have worked closely together to consider how they can optimize the customer experience. The result is an app with a server-driven user interface (UI) that allows us to dynamically adjust the user interface with low loading times and provide a seamless and personalized experience for our passengers. This innovation would not have emerged so quickly and so effectively in a rigid, hierarchical working model. The opportunity for all team members to contribute their ideas and knowledge at an equal stage has accelerated the development process, significantly improved the quality of the final product and also made our customers happier. Just recently, our app was named the world’s best airline app at the World Aviation Festival.

Blue Box End

Christoph Fuchs: Server-driven UI is an exciting concept. What is the technological basis on which the Digital Hangar operates, and what advantages does this architecture offer the Lufthansa Group?

Christian Spannbauer: The Digital Hangar follows a multi-cloud approach as part of the Lufthansa Group strategy and relies on cloud services from Microsoft and Google, which offer us the flexibility and scalability we need in such a dynamic environment as the aviation industry. Cloud technologies play a central role in our infrastructure, as they allow us to react quickly to new requirements while optimizing the costs of operating our IT systems. By using cloud-based platforms, we can integrate and process data very flexibly. This opens up completely new possibilities for us in areas such as data analysis, automation of processes and personalization of our services for our customers.

Christoph Fuchs: What role does enterprise architecture play in the connection of old and new systems?

Christian Spannbauer: Enterprise architecture is a strategic key to our digital transformation. It creates the structural foundation through common vision to connect both old and new systems and ensure that they work together seamlessly. This applies not only to technology, but also to processes and collaboration between teams. Through clear principles and standards, we ensure that the systems can be scaled efficiently and at the same time are flexible enough to respond to new requirements. What’s special about us is that we not only break down technological silos, but also break down cultural barriers to create a unified architecture community that works both ways—from the legacy world to the most advanced cloud-based systems.

Christoph Fuchs: Where do you see the future of the digital hangar and digital transformation in the Lufthansa Group?

Christian Spannbauer: In the coming years, the Digital Hangar will play a central role in further advancing digitalization in the Lufthansa Group. We will continue to develop the insights we have gained in recent years for our customers, but of course also for our employees and the entire operations department. Artificial intelligence and automation will be crucial technologies from which we expect a lot. In addition to the customer experience, the focus is on increasing efficiency and achieving sustainability goals through digital solutions. The Digital Hangar will continue to be the innovation platform for the Lufthansa Group, where new ideas can be developed and scaled quickly in order to secure our competitiveness in the long term.

Result

Christoph Fuchs: So we see that the Digital Hangar represents a decisive step in the digital transformation of the Lufthansa Group. At a time when the aviation industry has faced immense challenges due to the Corona pandemic, the Lufthansa Group has taken a clear and strategic approach to digitalization, which enables the company to both modernize its IT architecture and establish agile ways of working that promote rapid response to customer needs and market changes.

Mr. Spannbauer, thank you very much for the interview and the interesting insights into the digital transformation of the Lufthansa Group!

The authors

Christian Spannbauer, CTO of the Lufthansa Group’s Digital Hangar – together with more than 1000 colleagues, he is working on the digitalization of the Lufthansa Group.

 

 

 

 

Dr. Christoph Fuchs, Partner in the Technology Strategy & Transformation practice at Deloitte Consulting, supports companies in making targeted use of the potential of IT and digitalization in the context of comprehensive transformations.