The road ahead the strategic, the operational, the technological and the cultural-Part 4

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Road ahead the strategic, the operational, the technological and the cultural

Transcript :

Karl: 00:10 Welcome to Driving the Future. This is the fourth podcast and I’m joined by Mark Sazar and Brynna Mill. These are digital automotive experts both, and I’m very pleased to have you on board. Thank you for joining us.
Neil: 00:26 Thank you Karl. I am Neil, I am leading the automotive digital team within Capgemini, German Invent. Also heading our automotive manufacturing business.
Karl: 00:38 It’s great. It really is a pleasure to have you joining us. Okay, Mark Sazar, could you introduce yourself and tell us something about your role?
Mark: 00:49 My name is Mark Sazar and I am responsible for all the connected car topics here at Capgemini Invent. Coming to the fourth part of this episode of this podcast, summing up what we talked about before and looking a little bit what is ahead, we want to introduce something what we invented here at Capgemini, a new offering which is called Smart Mobility Connect, which actually addresses all the topics that we have covered so far and an offering we established in September and we are rolling out to the markets.
Karl: 01:37 Yes, and it really is a fascinating time, in this, what is known as the connected mobility ecosystem, isn’t it? It’s incredible opportunities out there for OEMs. Of course, I realize that it may be a challenging time and a pressing time for them but it really is a fascinating time also.
Mark: 01:56 So Karl, why is this affecting our clients, why is this of relevance for the manufacturers? Why are they asking themselves where they are positioned? It’s what we heard in the earlier podcast, is that the consumer behavior is changing. New technological possibilities, the expectation of the consumers, of the customers, that even their automotive…their preferred automotive manufacturer offers connected vehicles, that they can do in the car literally the same that they’re doing at home with the smart phone, that this is possible in a safe, protected manner, also within a car.
And then they’re facing a reality which is very much functionally driven, functions-driven, with not integrated IT systems, not integrated business processes, probably not even a common vision on this smart mobility ecosystem which we see coming.And then they’re facing a reality which is very much functionally driven, functions-driven, with not integrated IT systems, not integrated business processes, probably not even a common vision on this smart mobility ecosystem which we see coming.And that’s where we are coming in and we are recommending the OEMs, so it’s great what you are doing within Europe, sales function for a certain geography. It’s great what you are doing in after sales. They have fantastic ideas in marketing and outstanding amazing campaigns.Now, put yourself in the shoes of one of your customers and how are those things connected within the customer journey? And then how to drive this customer journey in a smooth manner through all your processes, all, everything that you set up. And if you like we can give you an example, how we think it should look like.So that’s where we are supporting our clients and that’s where we’re seeing the challenges about connecting the dots. Those very complex [inaudible 00:04:03] companies grown over the last decades, and now from the point of view of the customer, the clear need to be very much consistent, very much seamless, very much relevant to the customer, situation of relevance bringing AI competence as well. And of course the customer is orienting themselves with some of the best practices you find.And those in China you find with ten-cent Alibaba, in the western world, you find it with Amazon or with Apple. So those are the benchmarks, which are totally out from the traditional automotive industry.
Karl: 04:41 Yes. Yes, I suppose Smart Mobility Connect is doing nothing less than helping OEMs redefine themselves, I guess. Redefine their approach and their whole strategy.
Mark: 04:58 I pick up the term of redefining it. Yes, they need to redefine where do they want to be in the mobility ecosystem. Do they want to be someone who’s setting the standards or is this even possible?

For example, if it’s an OEM who’s producing two million cars and want to bring, in a safe manner, a Netflix app into the car, Netflix might not be interested in doing so, because they don’t want to give away their source code, not at all, but they are not interested in some of the coding requirements from the automotive manufactures, to make it safe for the car environment. They just say, ‘Hey, two million users, that’s not the dimension in which we are thinking. We need at least another 10 or 20 million users, then you will become of interest to us.’

This is turning around the scene, those gurus of the car industry, who have been the heroes over decades, now they are coming to tech companies and putting this into a different perspective. This is a cultural change at the top, also, to recognize that you are not always the global leader in everything. That when it comes to the mobility world there might be some others who are thinking in different dimensions, who have by the way, also by far higher market capitalization, than any automotive OEM.

Karl: 06:38 I guess we could talk now….if we could talk now of some of the operational changes OEMs can make, to accelerate the process of conception to realization. How might they go about this?
Mark: 06:55 Again, starting where we are coming from. We’re coming from a world also called linear and a waterfall-driven world, where you’ve done a concept, we’ve done a concept, a business concept, followed the strategy, the concept came. When the concept has been accepted, it went over to some guys doing the detailed concept. Here more or less for the first time, some technology came in. When this is ready it went to the IT department, the IT department refined it. When it has been refined the better cases is just checking the business side. Then they started to give it into procurement. Procurement asked some of the partners for their quotes, for their proposals. How much would it cost to set up such a solution.

This has taken another three, four, five months. Then the project started, they started to program something, everything happening usually in the headquarters. When this has been ready, let’s say another six to twelve months later, it went back to the business side, some refinements happened. Everybody said okay that’s fine now, let’s ship it out. And what happened is that, surprise surprise, usually the market said, ‘Mm, I’m a little bit different, could you change this that I can use it in my market?’ All the markets said ‘sorry, this is coming too late, I’ve my own solution’. So over decades, headquarters did something where the real market need has not always been there.

So, we have seen, as consultants, many centrally driven approaches fail for the reason that it did not pick up the need of the market, the need of the customer in that sense.

So, what is needed to accelerate the process from concept to realization is, in my view, first of all, set up some guiding principles. In my view one of the major guiding principles is it needs to be market-driven. It needs to be market-driven, the headquarters is giving as standard, some guidelines that only if it’s market-driven you can assure that it’s going to the right purpose, which is serving the business. And serving the business means either positioning nowadays digital services on earlier time, selling more cars on the best world roads, products, and services. And you can come to the pain points of each market, whether that is acquiring new customers, or improving the retention, making it relevant for the markets.

Then, those use cases that you get on a certain platform, which is, in my view, among the guidelines of the headquarter, those use cases should be shared among the markets. In that terms, a platform or in popular terms, an app store, and from the app store, other markets can pick what they need, and of course feed back what they have developed.

When you go a step beyond, this internal app store can be filled in also by external partners who are interested. They need to follow the same guidelines, the same rules. But of course they can bring in also their content.

So instead of developing in a slow manner, a centrally driven solution which at the end of the day not many guys in the markets really want to have, do something which is faster, which is shared, which is by far more agile, and which is also energizing the entire organization.

Now saying this, it’s of course easily said. But this is a real cultural change, this is a total cultural change. It probably would mean even to redeploy guys who today in the headquarter, bring them out in the market, to support the markets in setting up something relevant.

So…

Neil: 11:31 Yes, and it’s not just developing something for the market and for the customer, but at the same time bringing it out to the market, bringing it into the car at a very fast speed.

So, if you look at development cycles at the moment and innovation cycles within the car, first OEMs start of the year update, but that’s still not enough to be as relevant as the customer is expecting. So the development cycles have to be faster than what they are at the moment and this is really one of the challenges that they have.

Mark: 12:23 In order for picking up with development cycles in my view, that point of giving the power back to the markets involving also third parties, is one of the ways forward to speed up. To speed up to bring in the latest thinking and to overcome pretty slow, traditional structure.

Pioneering technology means, of course, I would rather say that the interior of the car, from today’s car manufacturers, needs to be re-conquested, win back from the tech companies, and this, it’s still possible, that’s what I’m saying. It’s still possible, if you have some information which you have more or less exclusively from the car, and combine it with other things.

So either sensing the mood of the driver and changing the ambiance, the light, of playing some music in that situation, is one of the responses. Knowing from the driving style, that guy drives not as he usually drives, he’s more nervous, offering something specific to that situation. This exclusive knowledge of the car manufacturer, they just need to bring information they have, into the context and put in with some AI technologies, additional offers.

Karl: 14:01 How can automotive culture adapt to enable agility and provide an environment that fosters creativity and an innovative approach?
Mark: 14:10 It’s really about re-conquesting the interior space of the car by the car manufacturer and in doing so, what we said before, the point from concept to realization needs to be changed.

So updates need to build in much, much faster, instant updates are necessary. So it’s in that sense, from the architecture becoming like Netflix, a learning-architecture which has the capability to do multiple updates each week, each day. That’s in my view one of the ways forward for automotive manufacturers.

Karl: 14:55 So, perhaps we could finish of by talking about how Smart Mobility Connect as an offering can help both technologically and I suppose philosophically, I guess, with the cultural mindset and to foster creativity.
Neil: 15:13 Picking up your point when we discussed before about the necessary change process within automotive for coming to approaching the customer ecosystem’s different style of working, becoming much faster than traditionally, that’s where the Smart Mobility Connect offering comes in.

Basically, we reflected what we’ve seen the last years, if not the last decade, in our customers, we reflected on the structure of connected customer, connected services, connected ecosystem. We reflected this with the customer engine, with the software asset which we’ve built and we are using Smart Mobility Connect, to get into discussions with our clients, showing them, I would say, a holistic vision, of the smart mobility framework and getting in discussions on specific topics with our clients, reflecting their specific needs. Getting into discussion first, with a holistic starting point. We’re saying, ‘Hey, in our view, it needs to be thought through in an overview manner and then you can deep dive wherever it’s needed’.

So we have realized that all our customers have started their journey, we wanted to bring in something which is showing how the dots are connecting, how a consistent story comes in, and how this is then reflecting also to the Capgemini group, which is bringing together business and technology. So, bringing to life what’s next for our clients, that’s the ambition, that’s what we want to show with the Smart Mobility Connect offering.

Karl: 16:59 Okay, so I’d like to finish by thanking our very special guests, Ronan Mill and Mark Sazar. Thank you so much for joining us in this podcast.
Neil: 17:09 Thank you Karl.
Mark: 17:11 Thank you. It was a pleasure.
Karl: 17:13 Thank you to all my guests and it really has been an interesting journey through this landscape. Thank you very much. I hope you’ve enjoyed it as much as I have. Bye for now.