The third annual Best Practices in Automotive event in Detroit remains a forum that the automotive industry needs, in this age of disruption, change, and ecosystem evolution. Connected vehicles are today’s reality at different levels of maturity, and fully autonomous vehicles the reality of tomorrow…or at least, sometime between 2022-2025 if vehicle manufacturers’ plans hold true. Open dialog between disrupters from high tech, (start-up) automotive, smart cities, and the disrupted traditional auto industry, is an important vehicle for addressing the complexity and warp speed change that continues in this industry. It’s how ideas are hatched, partnerships are formed, and yes, best practices are shared.
Although an SAP sponsored and organized event with a share of detailed how-to sessions on SAP products, Best Practices in Automotive is balanced with automotive company and ecosystem partner presentations that shed light on challenges and opportunities facing the industry today. Following are my top five takeaways from the event.
1. In a connected and autonomous vehicle world, it takes an ecosystem. Disrupters and disrupted continue to form ecosystems that will drive this industry forward. The challenge with this is managing the multiple platforms that need to be in place, as well as the workflows and security protocols for successful collaboration among partners. Product innovation, operations, and revenue platforms need to be interconnected, and accessible to the internal, global team, partners, and suppliers. One example from the Best Practices event is Mojio, a four-year old start up that strives to address the fact that there are a lot of old cars out there (75% are disconnected), that could be smart and connected. With partners including SAP, ZTE for hardware, Tmobile, Deutche telecom, and Amazon, a slick mobile app for tracking diagnostic, behavioral, and contextual data, Mojio CEO Kenny Hawk said the company has gone from 0-400,000 subscribers in 8 months.
2. Smart cities will become increasingly important partners for automotive manufacturers. The Dallas (TX) Innovation Alliance presented their plan for developing the city to accommodate new transportation models (“MaaS”, or Mobility as a service), an “intelligent communication infrastructure”, and autonomous vehicles. Public/private partnerships are critical for the success of their efforts, as with any smart city – particularly with vehicle manufacturers. Data monetization of connected vehicles is one opportunity where smart cities and auto makers could work together.
3. Machine learning and analytics will become critical decision-making tools. Probably the single hottest topic in technology today, the promise of machine learning is augmented decision making. Whether during design, engineering, manufacturing, supply chain execution, or service. The enormous amount of data that will be created on an hourly, daily, and weekly basis requires rapid analysis, cleansing, and action so quality issues can be dealt with quickly, software and other content can be updated as required, and customer experience is continually improved. Karma Automotive, GM, and Jaguar Land Rover all mentioned their interest in leveraging this technology.
4. Closer connection with the consumer is required for automotive industry success. Michael Elly, CIO of Karma Automotive spoke of his company’s focus on achieving 100% customer satisfaction through understanding consumer needs. On one hand, what company isn’t trying to achieve this, but on the other, this isn’t just about collecting consumer complaints in a CRM system. It’s also about leveraging connected data to follow vehicle usage by demographic or geography, and understanding driver preferences for software and infotainment content. The latter of which becomes more important as level 4 and 5 autonomy are reached by automotive manufacturers, and infotainment content can be readily and more safely accessed. And it’s not only the automotive industry that is thinking like this: Caterpillar discussed thinking of themselves as a retail brand, and that manufacturers must “adapt to retail speed.”
5. Digitally transform, but don’t lose sight of today’s technology, and organization needs. With the impact of 3rd platform technologies and innovation accelerators that is quite real, there are still many classic technology issues that need to be addressed first before taking advantage of these advanced technologies like machine learning and blockchain. Areas such as enterprise quality management, system rationalization, establishing an enterprise platform, moving to paperless processes, and data unification. Jaguar Land Rover discussed the challenge of organizing around the connected, autonomous vehicle and the need to hire from outside the industry – for areas like software development and design thinking. Daimler discussed their focus on moving to a paperless plant as a key part of digitalization strategy.
Falling out of my top five, but not forgotten, is blockchain, which I think will rise in importance in the automotive space over the next 12-24 months, for service, supply chain, and design. The blockchain session at this event was one of the most highly attended, simply because of the potential of this technology. It’s very early days, however it’s clear that distributed ledger technology could provide the secure, verified, automatic foundation for collaboration across ecosystem and platform that is inherent to the automotive industry today.
The next 1-2 years for the automotive industry will be filled with massive disruption, as companies new to the industry expand their presence, and established automotive companies evolve their organizations. The definition of what it means to be an automotive company will be very different. Buckle up for an interesting, exciting ride.
As always, I welcome your comments and look forward to continued dialog throughout the year on the dynamic automotive industry.