Six new demands fueling the automotive industry’s need for modern technology

From the rise of electric vehicles to the ongoing chip shortage, the automotive industry is undergoing a seismic shift. However, with innovation and technological advancements, there's hope for companies looking to navigate this landscape and emerge as leaders.

We recently partnered with the Center for Automotive Research (CAR) to produce the whitepaper “Data-driven digital platforms for automotive transformation.” From smart manufacturing to Industry 4.0, to CASE and more, the paper explores the unprecedented disruption facing today's automotive industry. 

The whitepaper also explores six new demands on the automotive enterprise and how these new industry imperatives are increasingly important. A common thread woven throughout each new imperative is the strategic role of enterprise data, and the role digital tools and technologies can play in driving more effective decision-making throughout the automotive transformation.

Six new demands on the automotive enterprise

1. New business models
   New “as a service” business models (e.g., transportation as a service, software as a service, software-defined product features, and upgrades) are driving new products, services, and revenue streams. Challenges will exist in identifying, building, and monetizing new offerings while simultaneously developing and producing “traditional” offerings.
   
   To illustrate, automakers must continue providing highly-demanded internal combustion vehicles such as pickups and SUVs while simultaneously ensuring they position themselves to benefit from the move towards alternative energy sources. Shareholders will not be forgiving, and survival will be put at risk if financials suffer as a result of abandoning profitable segments too early.
   
   
2. Customer centricity
   Industry-wide efforts are underway to provide ever greater levels of personalized, contextualized experiences across the customer lifecycle. Critical to these efforts is providing connectivity and visibility across all customer channels (including web, mobile, social, etc.).
   
   
3. Product centricity 
   Next-generation technologies (i.e., connected, smart, predictive, autonomous, electrified) transform how innovation is brought to vehicles. The emphasis on new features is shifting from hardware to software-defined capabilities and a subscription-based deployment. For example, vehicles can now be upgraded continuously over the air rather than maintaining a fixed set of capabilities during their lifetimes.
   
   
4. Cross-industry collaboration 
   As traditional business models are disrupted, connected and collaborative data-driven digital ecosystems (incorporating a diverse and constantly evolving group of stakeholders) are emerging. Not long ago, it was inconceivable to include finance and insurance companies, cell phone and telecom providers, streaming content providers, concierge and wellness services, and even dining and retail establishments as part of the automotive ecosystem. However, this is where we find ourselves today.
   
   
5. Need for visibility, agility, resilience, and risk mitigation
   Automakers face continued challenges in anticipating and managing changes within the rapidly evolving business, geopolitical, technology, and security environments. Few things illustrate this better than the supply chain mayhem caused by the COVID-19 Pandemic. End-to-end, real-time visibility to support improved sense-and-respond capabilities is critical to success in these endeavors.
   
   
6. Sustainability
   As global competition and consumer choice intensify, automakers seek ways to bolster long-term customer relationships and minimize negative impacts on society and the environment.

Bringing enterprise data together 

As businesses become more connected (i.e., connected consumers, vehicles, factories) and enterprise processes become more digitally transformed, it is also critical that information technology and data strategies evolve. However, as is the case with most mature industries, the automotive industry is continually challenged by data silos. In many ways, however, the requirements imposed by new digital and connected business processes have made these traditional barriers even more noticeable.

Next-generation automotive excellence will be characterized by companies anticipating and reacting to business conditions in real time across all aspects of their operations. Successful companies will harness meaningful data, including traditional and new data sources and types. This data forms the foundation of learning and the ability to make advanced real-time decisions. 

Examples of modern applications that leverage data to make real-time decisions include predictive vehicle maintenance recommendations, Artificial Intelligence (AI) for parts recommendations, personalized marketing offers, and digital twins of products and manufacturing operations.

Automotive software to navigate the industry transformation 

Automotive OEMs and suppliers of all sizes are also adopting industry-specific ERP technology designed to better manage business processes and disparate enterprise data on an integrated and real-time basis.
Technologically advanced, automotive-specific ERP systems are a worthy investment in your company’s operations, and can yield gains in efficiency, actionable intelligence, and productivity. Every feature of a modern ERP ultimately ties back to these improvements, enabling your organization to become more productive, more competitive, and better positioned to meet current and future industry demands.