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SMACing the Automotive industry: From concept to consumer Part 2

By - Asit Kumar Barma | 31 Jul 2014

Digital strategy for business transformation

Global organizations are embracing digital strategy for their business transformation initiatives. The automotive industry accounts for a significant pie of this investment. Affordable digital initiatives are bringing all players in the automotive  ecosystem at par with each other. OEMs as well as suppliers in the automotive industry are adopting SMAC to transform their businesses. SMAC strategy is essentially driven by four components of Social computing, Mobility technology, Analytics and Cloud. More than what they do, it is important to know how to apply the SMAC technology for business transformation. This can be called SMACing the automotive industry. SMACing powers you on your digital race to be more customer centric and more productive with the launch of new products, insights for greater value engineering, reduced vehicle recall cost and enhanced consumer experience –  impacting all key stakeholders in the automotive industry value chain.

The growth in internet access through mobile devices has fueled the demand for real-time access. Machine to machine (M2M) technology further powers this growth, as it enables communication between devices via internet connections. A portfolio of M2M solutions can be seen in fleet management, asset tracking and many such applications. Shop floor to top floor applications to integrate shop floor equipment and assembly lines with other business applications and shop floor on mobile are some examples we can talk about.

Creating a community of innovators and design enthusiasts using social media is another example, what we can term as crowdsourcing of design and innovation. The BMW Group and Local Motors initiated a collaborative design and development project – ‘The Urban Driving Experience Challenge’. The challenge asked the Local Motors community of nearly 30,000 designers, engineers, fabricators and enthusiasts to identify the future premium vehicle features and functions that will define the urban driving experience in the year 2025. The three-week competition was held on the Forge at LocalMotors.com from September 25 thru October 16, 2012. By the end of the challenge period, nearly 3,500 individual design boards had been submitted in support of just over 400 innovative feature concepts. After an extensive review and validation process, 286 entries were qualified as having met all specified criteria. A council of 14 BMW Group executives reviewed these entries, and BMW Management selected the top ten concepts. The entries represent a wide range of concepts including interior design, connectivity, the future of car sharing and the application of new technologies, among others. (Source:  http://www.bmwblog.com/2012/11/06/bmw-and-local-motorsannounce-winners-of-urban-driving-experience-challenge)

Forrester Research, Inc., July12, 2013 writes an article on how the corporate app store of China Eastern Airlines (CEA), one of the top airlines in China, boosts enterprise mobility. CEA estimates that around 50,000 of its employees use mobile devices for work. To support this usage and leverage mobility even further across the enterprise, CEA’s IT department developed applications for its workforce and set up a corporate app store to manage access and simplify provisioning. This report highlights CEA’s best practices for operating a corporate app store and securing cooperation from key internal stakeholders to increase mobile engagement for business growth.  Source:http://www.forrester.com/Case+Study+China+Eastern+Airlines+Corporate+App+Store+Boosts+Enterprise+Mobility/fulltext/-/E-RES98521 ).

Less than one year after General Motors announced that the automaker would stop outsourcing its IT work to other companies, GM launched a new $130 million data center of its own around mid 2013 on cloud and big data concept. The company is betting that a thoroughly modernized approach to IT, consciously modeled in many ways on advances made by Google and Facebook will help accelerate the turnaround.  The company’s new data center has been designed to be easier to maintain & expand, and less expensive. It also supports a mix of conventional and experimental technologies that the company hopes will measurably improve its capacity to innovate by doubling the number of IT projects it is able to undertake. GM’s decision to deploy Big Insights is a big win for IBM, which ranked as the number one Big Data vendor by revenue. (Source: 1.“GM’s $130M Data Center Takes After Facebook, Runs Hadoop,”Silicon Angle, May 15, 2013.blog/2013/05/15/gms-130m-data-center-takes-after-facebookruns-hadoop/, 2. http://blogs.wsj.com/cio/2013/05/13/gm-opens-new-data-center-modeled-on-google-facebook/?mod=wsj_ciohome_cioreport)

‘Concept to Customer’ life cycle management

Today the auto OEMs face tremendous challenge from changing customer behaviors which are influenced by factors like easy availability of credit and the shift of activity to BRICS economy. Auto OEMs need to constantly innovate in terms of how they manage the portfolio of products and product lifecycle in view of superior customer experience, consumer demand led product innovation, ever rising competition, quick time-to-market, supply chain management, safety and environment regulations. Concept to customer lifecycle management was never so challenging as it is today.

A panacea- SMAC strategy in automotive industry

New technologies like social computing, mobility, analytics and cloud can be effectively used by the auto OEMs to respond to modern challenges of developing a vehicle and creating customer experience around a defined design, targeted cost and fixed timeline. As we discussed earlier, crowdsourcing of product innovations, connected car technologies, shop floor to top floor or digitized manufacturing operations, demography based product design and marketing, social listening to capture voice of customer to enhance product quality or improve service delivery are some of the SMAC driven disruptive practices.

Be a game changer

Automotive companies can respond to market challenges and address the emerging trends by implementing a phased digital business strategy, choosing the right digital technology portfolio across the value chain and aligning these with the core competencies & chosen strategies of the organization. In a nutshell, automotive companies will be able to stand out in the marketplace if they can create a high level of customer-centricity in their business processes, foster technology-enabled collaboration and optimize their choice of technologies.

The following two diagrams (ref: www.valuelabs.com) provide a framework to implement SMAC strategy in the automotive industry (fig.1) and create greater customer intimacy through social media marketing (fig 2). And together they result in superior customer experience, product innovations, process improvement and higher productivity.

In fig 1, sentiments from all stakeholders like customers, suppliers, opinion makers, distributors and competitors are captured on real time through social media like facebook, twitter, blog and conventional media like phone calls, emails, trade shows. These signals pass through various proprietary as well as open source listening tools prior to being fed to the CRM. With available business intelligence and analytics tools, meaningful reports can be generated to engage with the stakeholders as well as provide useful information to  production and R&D departments. There are instances of many OEMs deciding on the product features for different price range and market demography based on stakeholder feedback. This process can also significantly reduce possible vehicle recall costs where billions of dollars are wasted by the auto OEMs each year.

In fig 2, one can see various social marketing initiatives to enhance a firm’s customer centricity as it progresses on its digital transformation path. Social marketing initiatives have been broadly classified into four categories like connecting to customer, customer experience management, customer value creation and customer insight and new market strategy. All the players in an automotive industry value chain can create tremendous business value with simple SMAC applications like SEO/ SEM/ SMM/ Blogs/ CMS-CRM integration to  the relatively complex ones like  outcome based social marketing, in-memory computing, M2M, social intelligence and customer analytics.

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