The Automotive Customer, Driving Digital Value

I am happy to join The Future of Cars with Game Changers throughout this year to help bring readers insights from the people in the driver seat who are making this happen. We’ll delve into industry challenges and solutions that support ecosystem industries, all to help you succeed in transforming your business and business networks for success in the new digital networked age. Tune in to the business channel to hear today’s top technology and business strategy, thought leaders share expert insights on how the automotive industry is shaping the future of change. The following abstracts are taken from Episode 06 of the Future of Cars “The Automotive Customer – Customer-driven Value” which aired on June 21, 2016. My colleagues on the episode are Rick Varner (@RHVarner) from Gartner and Otto Schell (@Otto_Schell) from General Motors.

To listen to the full podcast visit the host site here or use the Soundcloud plug in, below.  Follow the conversation on Twitter at #SAPRadio and #TheFutureOfCars. Want to learn more? Attend the Best Practices for Automotive Forum 2016 co-sponsored by SAP and ASUG Eventful Group on October 17-19 in Detroit. For details, please visit the forum’s website.  

Opening intros (10:55)

Bonnie: Bill. Tell me. I’m sorry if I butchered the pronunciation of this woman’s name. She sounds like a guru. She’s very young. She’s all over the place. I have a list here of all the summits and conferences she’s been speaking at since 2012 on Digital Marketing.

How does this relate to what we’re talking about today, Bill? “Take a risk because what works today won’t work tomorrow, but what worked yesterday may work again.” Is that a tautology, circular reasoning?

Bill: Oh, I think it is. I actually…part of the reason I chose the quote was that Amrita, she is coming from that new age of millennial and younger generation thinking.

I think that there are a number of things that can be leveraged going back to traditional value creation in business models in automotive where we have this really robust supply chain. It’s just that we have to understand how we’re going to work differently together with all of the digital opportunities that land in front of us.

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McKinsey, and I think we mentioned this in a previous show, is forecasting $1.5 trillion in value creation from content produced, marketed, resold, packaged, licensed coming out of the digital car by 2030. I think really the opportunity here is to figure out who is going to create the content? Who is going to drive the value? How is it going to be disseminated?

We have these networks in place, these more conventional networks in place between the automotive companies, the suppliers, the dealers. Even if you go into the tech and transport industries, which are really converging with automotive, what we view as a car today just isn’t going to look anything probably like the new car of 2030, 2040.

I do believe that there’s a real great opportunity to leverage what we have in place from yesterday, but we have to look through it with a brand-new lens because obviously some of the things that you do and clearly some of the things that you do with physical trade where you have something you can touch, feel, and you can actually commercialize it, it’s really a value-based business model creation that you’re looking at when you’re dealing with digital assets.

I think [there] is the real opportunity and it’s also that thing that has people scratching their heads a little bit trying to figure it out. Everybody, to Otto’s point, everybody is trying to go at it a slightly different way, but at some point we do have to come together to commercialize and standardize. We’ll talk about that on the show. I’m pretty sure.

Bonnie: I’m pretty sure we will.

McKinsey has some pretty great ideas around value creation for the automotive:

McKinsey Value from Cars Exhibit 1

Second segment: conversation around integrated components and impact to the driver-consumer (27:55)

Otto: At the end it’s all about our products have to maintain out of these thousand pieces and they fly with 200 kilometers over the streets, connected or not connected, autonomous or not autonomous. We have to find a bridge between being faster or using different technology using different networks but still to have quality in mind with much, much shorter circuits. I think you have to find ways to configure that.

Bonnie: Thank you, Otto. Bill Newman, can’t wait to hear what you have to say. Agree, disagree?

Bill: I think Otto is for sure, Otto, you’re one of the great innovators that we see in our business. I think the opportunity is really just beginning with the car. How does a company that’s used to building a tangible product with thousands of parts when they’re able to create information that has no physical essence, how do you go about them packaging and modeling that?

We have some early examples of that from Automotive 3.0 with the info-tainment systems and some of the safety and the radio in the car, if you will, type of products that we learn to confederate with law enforcement, with vehicle safety, and other industries when we did that.

Going back to Rick’s point, I think the folks in the tech business have been doing this for a very long time. I think that as companies begin to transform so that in the future an auto company really doesn’t look like an automobile company, it looks really more something to the order of a tech company that actually provides some type of service or product in mobility like Otto, I think you were referring to.

I think that some of the lessons that we’ll learn will come probably from the tech industries and the transportation industries that have had to deal with value creation with a product that has no physical essence and learning to monetize that in a way that it doesn’t go back to what the commodity price of aluminum and steel are.

It’s how you cost it, how you price it, how you sell it, how you monetize it. How do you capture it on your balance sheet? Those are all things that we’ve done some work in but we’re about to learn a lot more that we don’t know already. I think that’s really where the tipping point is going to come.

There are a lot of very different ideas about how to go and do that. Again, to I think the point we made in the last segment at some place along the commercialization curve, we have to figure out to do that in a standard recognized fashion that also resonates with the consumer who is going to buy these digital assets generated from the vehicle, generated from mobility, and have value to them and find it useful in their day-to-day lives.

Segment Three: On the topic of product selling to the digital consumer and what that means for suppliers and OEMs (35:45)

Bill: A lot of people are talking about [monetizing digital assets created by the driver] and how do they best do it. Whether you’re talking about taking these assets created by their cars so this can be your drive behavior when we talk about insurance, but it can also be where you drive to. Maybe instead of, to Otto’s point, maybe instead of me driving down to Indianapolis during the week, I get a coupon to take the shuttle flight from Detroit Metro down to Indy.

These things just end up coming in to your box and because we understand your behavior, we can begin to predict what different products, services, offers could be provided to you. We have, in digital marketing we’ve been able to position offers to consumers in many different industries for a very long time, probably five, ten, 15 years even going back to the early days of e-mail marketing.

Coming back to some of the things that Rick, you were also saying earlier of being able to harvest all of that information and going to 1-2-3-step channel connections knowing about products that I’m using, knowing how I’m using them, knowing where I’ve been with them, knowing what my behavior is when I use them.

That really opens up a vast new set of opportunities where back to Otto, your point; really the car company becomes mobility. The point that is going to be very interesting is that a lot of that content is being generated by parts of the suppliers are making right.

We talked in one of our previous episodes about the connected vehicle and the connected platform. How that gets commercialized, monetized, licensed, royalties? In many ways like the music business where if I create content and you play my content whether you download it or you listen to it on a stream that I get a share, but it’s really a micro-royalty.

We’re going to start to move in to that pretty quickly now with some of these non-physical digital assets that are being created by the vehicle platform. We have to figure out how to share the wealth to the supplier community. That’s going to be a hard nut to crack.

You’ve got one point of view where the OEM says, “The branded vehicle is mine.” You’ve provided all your content up to the platforms. What do I do if it’s not mine? I think suppliers are going to have a stronger hand at the table deciding how that royalty share happens in the future.

Segment four, again on the connected supplier and the talent required (41:29)

Bonnie: Bill Newman, I’m looking at your notes. Let’s talk about connectivity. I don’t think we covered this yet, Bill.

You say, “Different OEM’s are approaching connectivity and the talent required to connect platforms,” that word “talent” in this context intrigues me, Bill, “in a different manner forming a spectrum on the one side by the intellectual capital,” and you’re talking about…I’ll let you talk about the case studies there, “from that to develop our own to even wait and see.”

“Auto suppliers want to move to digital live businesses but they’re increasingly looking to the automotive OEM’s for leadership.” Are they finding that leadership, Bill? Talk to us.

Bill: I think that you can see it play out in the morning paper if you pick up The Wall Street Journal or The L.A. Times or The New York Times or Chicago Tribune. I think that there is a certain share depending upon the OEM’s supplier position based on what a company needs and how they want to acquire the talent.

On the suppliers’ space, they’ve had to figure out how to collaborate with a number of down tier suppliers for a very, very long time to a point now where many companies that we talked about in one of our previous episodes.

For example, Delphi has had, this is public domain information, has had to have…they want to do vehicle to everything and they want to have a very connected platform in terms of how they deliver information, services to the instrument panel of a car than in a traditional vehicle model we have today.

They’re going downstream and they’re acquiring companies — fiber-optic cable companies, information brokering companies so that they can build up their platforms.

When we go a little further upstream to the OEM brand level, I think that there’s a question of does the talent that we want to, that we believe we need or maybe that we recognize we don’t have but we believe we’ll need will come from inside our four walls because we’re smart guys and gals and we can figure this out given enough time?

Or, are we going to go proactively on a hunt for something that we’re not quite sure that we need yet or we don’t exactly know what we’re looking for? Because again, technology is moving so quickly we have to commercialize something in five to ten years that doesn’t exist today.

Or, are we going to be kind of somewhere in the middle and we’re kind of going to go back to the old skunk work days of defense programs in the Cold War where we’re just going to confederate within our current supply chains and value create that way based on a certain set of parameters on where we think the market is going tomorrow and where it is today?

It’s really interesting to watch how this is all played out. You’ve got a real up-tick in M&A activity particularly in the last 12 to 18 months. It stopped being [so fast] now because we’re in a more tapered growth market.

You see some companies including very large global OEM brand companies that are really taking a wait-and-see or they’re sitting on the sidelines right now before really committing to any form of semi-autonomous connected vehicle research or in to new business models.

I think that the ones that have waded into the pool and are at least knee-deep have a really good opportunity to be way out ahead in perhaps the logarithmic curve moving forward than those who are kind of trying to figure out how to put the toe in the water.

And finally the predictions round, where we are heading and close (50:35)

Bonnie: Bill, I want you to officially finish the topic you started. We are in the Predictions Round now. Bill, why don’t we just ask you for your predictions as a wrap up to your topic? What do you think? What do you see? Do you like 2020? What year do you like?

Bill: It seems to be somewhere between 2020 and 2030. I think in 2020 we’re going to see a little bit of a flat line and a more consolidation of the base. If you look at Roland Berger or IHS or something on predictions, I think there are some market forces that need to sort themselves out. That’s on the market side.

I think the technology side; we’re already in to semi-autonomous vehicles. You buy a car now and it yells at you when you divert from one lane to the other. I know our friend, Larry Stolle can’t stand those cars. I’m just representing Larry because he’s not here today.

Bonnie: But he’s listening, yes.

Bill: Yes, I know he’s listening and he’s laughing right now.

They’re doing some override things already. I think getting to a place though where, Otto you were talking about, where we’ve got cars that really resemble more of the pod mobility, almost as an alternative to transportation, light rails, those kinds of things. We’re probably looking at 2030 I’m thinking in terms of some systemic accommodations where lanes on freeways narrow and you’ve got lanes for autonomous pods and you’ve got the rest of us poor people who are trying to drive in the regular lanes.

All that’s coming. I think that really that convergence is going to happen between now and 2030. Coming back to it, to the topic of today, how do you commercialize? How do you monetize? How do you make sure that the value chain is supported? I think those business models are going to look very, very differently in another 15, 20 years.

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The Birth of the Connected Supplier

I am happy to join The Future of Cars with Game Changers throughout this year to help bring readers insights from the people in the driver seat who are making this happen. We’ll delve into industry challenges and solutions that support ecosystem industries, all to help you succeed in transforming your business and business networks for success in the new digital networked age. Tune in to the business channel to hear today’s top technology and business strategy, thought leaders share expert insights on how the automotive industry is shaping the future of change. The following abstracts are taken from Episode 03 of the Future of Cars “The Birth of the Connected Supplier” which aired on March 29, 2016. To listen to the full podcast visit the host site here or use the Soundcloud plug in, below.  Follow the conversation on Twitter at #SAPRadio and #TheFutureOfCars. Want to learn more? Attend the SAP Manufacturing Industries Forum 2016 on June 14-15 in Lombard, IL. For details, please visit the forum’s website.  

Intros 12:20:
My introductions speaking on the Coach Wooden quote, “Be Quick But Don’t Hurry” UCLA legend Coach John Wooden admonished his players to always be at the top of performance but not be careless and move to fast. Auto Makers and Suppliers need to be laser focused on driving margin content in their operations, products and aftermarket offerings.

Second Segment 31:40:
Comments on the topic of security and the connected vehicle and platforms.

Bill: I think Rick brought up a really good point. Security issues have been around and the more we go digital the more the security issues need addressed. I mean you look at Jeep actually, they had a planned hack of their vehicle years ago. I mean it was by design just to see how penetrable their security, on-board security was and even if you just take a step back several to the last decade Vice President Cheney had his blue tooth monitor on his pace maker disabled because you know there was a personal threat that somebody might want to harm the Vice President.

I think you know as we move more into the “update in your driveway” vehicle type of model, this will give us some opportunities to really be proactive, but then the question back to today’s topic is how do suppliers respond to that. You’ve got Delphi who wants to connect vehicle to everything (V2E) – that was their big theme of you know, computer electronic show in January. You’ve got Bosch that want to connect the driver to the car to the house to the refrigerator and appliances so if you’re going to create a platform to broker all of that information, how do you make that secure and how do you make it able to integrate and inter-operate with all of the other platforms that also have to be secure. I think that’s—I think netting it out, that’s really one of the big challenges that both auto and tech and a number of other cross industries face right now.

Segment 39:50:
Comments on the topic of analytics and the connected vehicle and platforms.

Bill: I think analytics brings really two great opportunities for suppliers so the first one is following in the footsteps of the OEMs and the brand automakers so as I’m providing more functions and services that are going to be subscription based whether it’s I’m using the car on a ride sharing business model or I’m going to use satellite radio or I’m going to use certain features. I think in the future we’ll be able to a la carte and menu select much like we would do a trim package or a power train today. What we actually want in the car and just as a classic example you can pick whatever digital platform for your infotainment you might like and it’ll render whether it’s Apple Car Play or the Google Auto version. You can bring that up in your car today and so you do have some customization and those are going to be service driven.

The other interesting opportunity I think for suppliers around this is just like we’re going to have cars that can update themselves in the parking lot so you don’t have to go into the service bay you can just do it digitally overnight or wherever or real time when the car is not operating and it’s in receive mode. I think there’s real opportunity for suppliers to be able to create new products and without having to ship a new component actually change the firmware software digitally on the platform that they’re developing and then you know incrementally charge more to automakers and then again to the driver consumers for that capability. Hardware not withstanding auto assist front braking is a classic example. Yes, there’s some additional firmware that was needed, but that’s mostly a software fix. You’re not going to do a lot of changes to the actual electro-mechanical dimensions of the car and the braking system so there’s an incremental service add feature that a driver can have. That’s all being run on analytics. It’s up both on the board and behind the curtain in your will for the automakers in terms of what you have on the car, how you use it, and how it gets updated.

The “One additional thing” Bonnie wanted to talk about 48:00:

Bonnie: Bill Newman, I want to address one thing additional in your notes. I talked in my opening about what top global automotive suppliers are going to have to do to stay on top of their game, but what happens to the mid range or shall we say the low-end suppliers. Bill let me just read a comment from your notes here. You say, “Top global automotive suppliers will be bifurcated in the next decade as brands and OEMs for the consolidate as projected by Roland Berger and IHS,” but here’s what I want to—I want you to talk about it just briefly.

You say, “The low end suppliers will build volume to garner deep market share for simple components while high end suppliers will add the connected content services into the platform.” Without naming names, what about these low-end suppliers? Are they still part of the ecosystem build? Do they still need to be there? Will they still be a value, will they still make profits? Any or all of the above?

Bill: Yes so kind of the squirmy way out is is that all of the above, but I mean the real math is that strategically, a supplier is going to have to figure out where are they going to make their money from? It’s either going to be a commodity driven type of venture, you know like we have today. I mean our people who make parts and they make a lot of parts and you know a lot of electromechanical parts, but in order to grow you’re going to have to scale and so what that means is is that the people in the commodity driven sector are going to need to buy each other up rapidly. That’s the only way they’re going to keep their growth targets on in a increasingly competitive market niche.

On the top end and we’re already this with many of our suppliers, whether you’re talking about tires or whether you’re talking display panels as a classic example, the margins are just so much greater. Orders of magnitude greater to be able to provide those connected digital components and they’re the ones that are going to grow both organically and inorganically, but they’re going to grow faster. Now maybe you know like Delphi is an example, Delphi is actually buying cable suppliers that do the fiber optic cable so that they can their parts so you might see some of that collapsing in the market place where you actually have commodity suppliers being gobbled up by the platform makers. In the supplier space, the platform makers are going to be the ones that drive growth in the future particularly as brands you know, as those studies you mentioned, the brands consolidate and a lot of cost is taking out of the industry in the next ten years. That’s why I think, you know, earlier when I think Bonnie, you were saying wow that’s really fast, it’s because there’s just so much density in the marketplace today and there’s so much change shifting from you know what a car looked like. I think Rick to your point, you know five-ten years ago to what a car is probably going to look like in another five to ten years.

And finally my big predictions for the Connected Supplier 54:10:

Bill: I think  … what you’re going to see … is this bifurcation and auto supply. It’s going to be really interesting to figure out how people make their bets. You know, to Jeff’s point, we really didn’t get into some of the other digital industry that could actually collapse as we go vehicle to everything, driver to home and health and you know, then the question becomes particularly in Europe what are people going to be able to do with the technology given different privacy laws. So many times, tech gets ahead and I think what we’re going to have to do is kind of sort all of that out moving forward, but it’s definitely going to be some exciting times.

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Romney Invokes Analytics in Rebuke of Trump

Gov. Mitt Romney, the 2012 GOP candidate and former Bain & Company executive, made an unprecedented move to rebuke 2016 GOP front-runner Mr. Donald Trump last week. The very public and personal rebuke set of shock waves in not only the GOP primary season but also rippled through news media and general conversations. Motivations aside (you can read that in numerous political blogs), what Gov. Romney did in suggesting a split in delegate count leading into the Cleveland GOP primary was to invoke painful lessons in analytics that caught Team Romney by surprise in 2012, which he would prefer to not repeat itself this election cycle.

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Gov. Romney learned a valuable lesson in analytics four years ago (photo: RightSpeak.com)

 

In the late stages of the 2012 election, Team Romney spent many weeks and precious campaign dollars in states like Pennsylvania where the campaigned believed there was still a chance and pathway to the White House.  Despite criticisms this week by Mr. Trump’s campaign that Gov. Romney “went on vacation” the last month of the election cycle, the truth is far from that.  Team Romney did not have the proper analytics and modeling to determine where to place the right bets the last weeks of the campaign (Virginia, Ohio, Florida, Colorado) and instead attempted to leverage emotions and outlying probabilities based on unscientific exit polls. Meanwhile Team Obama had most of the pathway to the White House calculated using advanced predictive analytics supported by Amazon Web Services.  The President essentially watched Team Romney (quietly) spend its limted precious resources in places where it would in the end make little difference and focus on late campaign stage positioning which led to Pres. Obama’s second term victory.

While watching from the sidelines in 2016, Gov. Romney’s insertion of political comment into the primary in a way is to right the mistakes made in his previous run in 2012.  Current pathways for Mr. Trump to achieve the needed delegate count in advance of the Cleveland GOP Convention get murky when each of the three remaining candidates divide up a number of critical states into their own delegate counts. In this model, Gov. Kasich and Sen. Rubio need to secure a number of states – including their own in Ohio and Florida, respectively – with Sen. Cruz continuing to pick off the heartland states, in order to block a quick pathway to the GOP nomination for Mr. Trump.  The  situation is so much clearer today based on advances in algorithms and the belief in the accuracy of predictive analytics, that few disputed Gov. Romney’s initial high level approach model, which many affiliate news organizations have analyzed and determined to be sound.

Regardles of the outcome of the 2016 GOP primary season, one thing is clear. Gov. Romney learned a very valuable lesson in the accuracy of predictive analytics four years ago.  And that memory is shaping his influence of the current primary season.

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Transforming Auto Makers to Connected Platform Makers

I love January.  As the saying goes, “New Year, New You.” And new cars. LOTS of new cars, announcements and demonstrations how the car will evolve with new features, content and systems.  This year the volley started early with huge announcements in week 1 at the Computer Electronics Show in Las Vegas and will continue in weeks 2 and 3 the Automotive News World Congress and North American International Auto Show in Detroit.

HP Matter Connected Cars Hero

Photo: Hewlett Packard

There are some megatrends emerging from the recent announcements and research SAP has conducted over the past six months and will progressively make available through its social channels over the course of 2016.  Economically, a number of impacts are at work. With the fall of crude oil prices and other commodities, and North American volumes hitting pre-recession levels of 17.5M units in the passenger vehicle segment, growth is expected to continue.  However it will be a different kind of growth based on the evolution of the value chain, as well as general expectancy that global AGR levels will taper from 7.8% (from 2009 to 2015) to 2.8% (from 2016 to 2020) according to IHS, and the retention length of vehicles rising to over 12 years on average.  OEM consolidation will likely follow in the next decade to help keep growth moderate and remove industry structural costs.

The “Future of the Car” is changing as well, from mostly mechanical and metal-based vehicles to a connected set of component platforms, plastics and next-generation materials essentially creating a rolling data center providing safety and entertainment going from Point A to Point B.  Social acceptance of a fully autonomous vehicle – and the regulatory environment supporting that – is likely 5-10 years out based on current forecasts (OESA, CAR).  However a connected vehicle – depending upon what your definition of “connected” is and what services that uses – is here today, both on the public highways and in prototype communities like M City.

What does all of this mean for SAP’s automotive OEM and supplier customers?  It means companies have significant choices in product design, value chain placement (and respective participation), and customer experience to define the organization for the next few years to come.  Last year I asked executives “are you buyers or sellers?” This year I am more apt to ask “are you a platform maker or owner?” as makers and innovation will rule the ability of OEMs and suppliers to not only have the profit to make acquisitions but also determine the position of the portfolio in the value chain where they will drive content.  And content is profit, and profit means growth. And growth means you survive and prosper in an ebbing business cycle.

Here are some disruptors coming out of this month’s automotive announcements.  As more become available during the month (or as forecasts change, which of course they will) I will update this post as appropriate.

  1. Technology is not the long pole in the tent. Regulatory needs to catch up.  The big data base technology to help manage petabytes (1,000 terabytes) of information including music, images, maps, consumer behavior is already here.  How we use these – based on location-based privacy and social norms – and what we are able to implement in products – based on regulations – have only partially been defined.  This is a real bummer to consumers and tech savvy developers, who essentially are releasing only parts of consumable disruption based on business environments.  Uber as an example has taken its disruptive model to court in a number of cities and states (and won).  Google has sent its driverless, autonomous vehicles to a number of cities with some relative success.  Until we are ready to give up control of our driving abilities? Not yet.  But in Michigan you can’t take a driver’s test at the Secretary of State office using a park assist vehicle to parallel park.  Again, we aren’t there yet.
  2. The notion of a vehicle platform and how it scales and connects has changed. Typically a vehicle has a number of trim packages, platform sizes, power plants and features. When a manufacturer builds to a variable platform, usually the platform itself is constant down an assembly line and the features and cosmetics adjust per spec of the vehicle.  Faraday Future announcement at CES of the FFZero1 platform for variant configuration, where the platform itself can stretch and modularly accommodate different power plant designs (e.g. battery pack stacking), has the potential to change how vehicles are designed at the platform level. Delphi emerged with its announcement of its vehicle to everything (V2E) platform also at CES allowing vehicles to sense devices, social behaviors and “things” is one example of automotive suppliers moving to “connected platform makers.” Other suppliers such as Bosch are developing their own platform to connect devices, components, homes and information.  And GM announced a major $500M investment partnership with Lyft to enable fleet connected B2C vehicles. Being able to scale physical and information platforms using big (very LARGE) data sets with consumers is a key to transformation success.
  3. The Aftermarket segment will collapse, and everyone wants a share. And for you to love them. The bidding war over Pep Boys is likely the first of many acquisition plays and direct to consumer moves by auto parts suppliers to converge its OE and aftermarket businesses.  With each stage of the aftermarket value chain adding a full price share of margin from one step to the next (usually 80-100% of margin per value chain step according to theAutomotive Aftermarket Supplier Association), it’s no wonder that auto parts makers want drivers to get their hands on their parts directly to harvest margin otherwise flowing through the more expensive OE dealer channels.  Will drivers who hold vehicles longer buy directly? Most do already through the likes of eBay, Amazon, NAPA and AutoZone to name just a few of the big players.  Often this competes with OE interests to leverage their own proprietary dealer networks. How suppliers go after this high margin space, and how they communicate brand interest and customer experience to drivers who normally buy through dealers and distributors will be key to success.

Platform makers OEMs as well as suppliers – will garner market share moving forward. Tesla, Google, Faraday, Bosch and Delphi (among others) have stated their interest and staked their claim as disruptors owning a platform.  Not necessarily as a classic car company.  Those companies unwilling to embark on a journey to digitize not only their product portfolio but their business operations and unleash new platform business models, will be relegated to “seller” status going into the 2020s.

Auto makers and suppliers need to stake their claim now based on these and other mega-trends to build their financial assets to continue growth throughout the balance of the decade and beyond.

This blog originally appeared on the SAP Community Network. Please follow me there (login required) or join the conversation on LinkedIn

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TEDxDetroit: Making Net-zero Beer

Today our blog is from the Fox Theater and the TEDxDetroit event.  Many innovations in the TEDx labs where in one station TEDx-ers and I learned how to make net-zero beer and get our x-training in.

IMG_0825

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This Labor Day: The California Drought, Sustainable Water Use, and Changing Micro-climates

This Labor Day, The View from C-Level reflects on the California drought, sustainable water use, and a changing micro-climate.

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The Need for Planning to Run Simple

This past month at the SAP SAPPHIRE conference, the RUN SIMPLE message was out in full force. More customers are working hard to move onto the cloud-based, in-memory road map advocated by SAP as the world’s largest business software company. We often talk about the end game and the benefits achieved by simplifying operations and user experience.  We have a tendency to gloss over the deliberate, focused preparation required to get our customers on that journey map and lead them through what often is a multi-year transformation to cover all of their functions, processes and systems (and a merger integration here and there along the way).

As a writer I’m fond of the Nathaniel Hawthorne quote, “Easy reading is (damn) hard writing.” It came up in conversation today as I plan to roll-off a major customer program that has held most of my focus for the past nine months.  I’m not suggesting that moving to simple is hard … without careful and deliberate planning though it isn’t easy.  Working with partners it’s our job as transformation specialists to illustrate the “art of the possible” and to get customer teams to use an “outside in” lens to understand what process bureaucracies, poorly designed user experiences and other inhibitors to success that come with any integrated enterprise resource planning (ERP) environment.  Moving from legacy systems and spreadsheets to the hyper-speed of in-memory computing is revolutionary – even scary – to some customer groups.  Taking them through the journey of what is possible, what other customers are doing, what is SAP looking at downstream in its own road map – continually each and every quarter – is essential to operate in one cohesive team among customer, partners, software and services.

(Graphic by izquotes.)

As part of my recent effort with this customer, we partnered with a systems integrator and management consulting firm to define use cases and play books so that – much like players on the field – we could execute different activities understanding how various teams would operate and inter-operate as part of that execution.  It sounds easy, however in a large, complex global organization it takes time to socialize these ideas and arrive at a point of view that everyone can buy into and agree on.  Again that’s the (damn) hard writing part of easy reading or in this case execution.

It’s exciting for the journey ahead as we leverage the ever-changing world of technology, science and information. With excitement comes the responsibility for those of us on the front lines to ensure the proper communication, planning and education is provided to our customers for full visibility and understanding.

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