Customer-Centric Mobility – A Software Driven Transformation

Putting Customers at the Heart of the Mobility Experience

A CapGemini’s article emphasizes the transformative potential of placing customers at the center of the mobility experience, especially through software-driven transformation (SDT). The automotive industry has evolved significantly since Carl Benz's 1886 motorwagen patent, shifting from purely mechanical innovation to a complex interplay of electronic and software components. Modern vehicles now contain numerous electronic control units (ECUs), increasing their complexity and necessitating sophisticated digital architectures to manage these systems effectively.

Despite the rapid technological advancements, OEMs have been slow to scale their SDT efforts. As of July 2021, only 1% of OEMs have partially scaled their transformation use cases, and none have fully scaled. This slow progress is attributed to external challenges such as the global pandemic, supply chain disruptions, stringent sustainability regulations, talent scarcity, and geopolitical conflicts affecting energy prices. However, internal inhibitors, particularly a lack of detailed insight into SDT's real-world opportunities, also play a significant role in this inertia.

The article argues that true advances in SDT will only occur when OEMs shift their emphasis from technology-centric innovation to customer-centric strategies. This requires a fundamental change in priority, where the focus moves from constantly upgrading technology to enhancing the customer experience. OEM leaders need to adopt a mindset that prioritizes customer relationships and experiences over mere technological advancements. This approach is crucial for deepening customer loyalty and building meaningful, long-term relationships.

A Galvanizing Purpose

The core purpose behind SDT is to transform customer relationships by delivering measurable value. OEMs need to be confident that SDT can provide strategic benefits, including the ability to manage the rollout of new services effectively. A unified architecture underpinned by SDT can simplify the management of complex products, offering OEMs greater control and improved margins for direct-to-consumer sales and aftersales support.

One significant advantage of SDT is its potential to drive new revenue streams and enhance customer engagement throughout the vehicle's lifecycle. As electric vehicles reduce aftermarket mechanical servicing revenues, software-based features and services are expected to grow substantially, offering new monetization opportunities. These opportunities arise across various customer interactions and journeys, such as in-car gaming experiences and enhanced vehicle performance for specific driving conditions.

Moreover, SDT supports sustainability by promoting standardized vehicle designs and reducing waste in R&D processes. This alignment with the circular economy can further enhance customer loyalty by addressing their environmental concerns. Ultimately, SDT enables OEMs to integrate seamlessly into consumers' digital lives, akin to how brands like Apple have become indispensable through their ecosystems of apps and services.

The Pillars of Transformation

CapGemini identifies three main pillars for achieving successful transformation in the mobility sector, with a particular focus on the first pillar: customer-centric strategy.

• Customer-Centric Strategy: The first pillar emphasizes the importance of placing customers at the center of SDT strategies. This begins with a detailed analysis of the existing end-to-end customer journey, identifying every touchpoint, interaction, and expectation a consumer has within the vehicle ecosystem. OEMs must critically review established procedures to find new opportunities for service delivery and user engagement. The goal is to develop value-adding end-to-end services supported by agile development processes. Branding and marketing efforts should focus on the power of the experience rather than traditional feature-based approaches.
• Becoming Fully Software Enabled: The second pillar involves internal transformation, requiring a shift in workforce skills and culture. OEMs need to embrace a software-driven organizational structure, supported by cultural change programs and upskilling initiatives. This transformation fosters a dynamic culture that embraces agile methodologies and the technical competencies necessary for SDT.
• Deploying a Software House: The third pillar focuses on practical implementation, developing a software-defined vehicle architecture and integrating in-vehicle and off-board software platforms. This includes establishing a comprehensive software factory with high standards of quality and cybersecurity. The objective is to leverage technological enablers like cloud, edge, and connectivity solutions to deliver seamless mobility experiences.

In conclusion, CapGemini’s excellent article underscores the critical role of placing customers at the heart of mobility transformation, supported by a clear purpose and strategic pillars. OEMs that successfully embrace these principles can achieve significant competitive advantages, fostering deeper customer relationships and driving sustainable growth. The journey toward SDT is complex, but the rewards in terms of customer loyalty, new revenue streams, and sustainability are of Form

What do you think? Leave a comment here with your own thoughts or get in touch with me directly via my LinkedIn profile.