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Tech Disruptions For 2016

Danielle Beurteaux

If Santa didn’t deliver a drone for Christmas, dry those tears. Drones in 2016 will be better than their 2015 versions and less expensive to boot. They’re one of several technologies that will be refined in 2016. In fact, the key word for 2016 seems to be improvement – better connections, better charging, better operation. Not all of these will be consumer-ready right away, but they do give a good idea of where the focus and resources are being concentrated. Here’s an idea of what to expect.

Device mesh

Gartner is saying 2016 will be the year the “device mesh” happens. That’s the system by which Internet of Things-enabled devices, wearables, mobile, and the like will be able to communicate with each other.

Automotive

The big CES show in Las Vegas is happening in January, and they’ve got a list of what they expect will be the big stand-outs of the show. Automotive will be big: Faraday Future’s concept car is there, BMW is showing off its AirTouch technology, which allows drivers to control some car features with waves of the hand, and Toyota has its self-driving, highly data-enabled car technology for viewing.

Wireless charging

So much of our current technology hasn’t yet been able to cut the charging cord, but 2016 could be the year of some advances in wireless charging. Several companies are working on different ways of lessening our dependency on cables.

Messaging beyond messages

Facebook and Google will both enable messaging apps to go beyond sending just a message – they’re ramping up to become virtual assistants that can text your friends and take care of a little business at the same time.

Drone improvements

Qualcomm has its newest drone technology at CES, which includes improvements in battery power, camera technology, and obstacle avoidance. The company says it expects the price of drones to decrease significantly this year.

Wearables with more

Samsung’s new processor aimed at the tech wearables market can take more measurements, including body fat and skin temperature, and process the results. An as-yet-unnamed company will reportedly release a new product using the processor in the first quarter of 2016.

5G wireless

Verizon will be testing 5G wireless technology in 2016. 5G promises faster speeds and will hopefully be released in time for the coming avalanche of Internet of Things devices.

Hyperconnectivity is the thread that’s tying all of these technologies – and the way we live today – together. Learn more about the global implications of The Hyperconnected Economy.

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Beyond Smart Cars: Smart Car Production

Larry Stolle

By now we’ve all heard of smart vehicles, which are cars that are enabled with sensors, networks, communication interfaces, and other tools. These will one day replace more accident-prone human drivers. The result? Safer, more efficient roads.

Of course, driverless cars are not infallible; recent minor crashes of Google’s self-driving car prove that. Still, the concept of cars that talk to one another is powerful, and could reduce accidents and traffic and improve road performance.

These visions of the future go beyond cars that know how to accelerate, brake, and turn for you. They also extend to the production of these newfangled cars. Believe it or not, how we manufacture cars matters a great deal to their efficiency. Transformations in automotive manufacturing software, computer crash simulation technology, and automotive industry standards will play a major part in the cars of the future.

Below we’ll look at the most important aspects of new car production. We will consider the role that smart plants will play and how logistics will change the building, scheduling, and maintenance of cars. We will also consider what supply-side coordination means for the auto industry.

Smart plants

Building better cars is about more than ensuring they’re safe and effective on the road. Automotive quality management starts at the plant.

Automotive industry trends are headed toward “smart plants.” These will use vehicle analytics based on sensor data to construct better vehicles. Each iteration will use information from the previous one to ensure smarter, safer cars. Car design software will coordinate spare parts, work, and logistics. A digital automotive network will enable better service and coordination with plants.

The systematic management of data offers other perks as well. Auto designers will have greater visibility of plant operations as well as better remote monitoring and control. They will also experience better production systems and faster issue resolution.

Logistics

Cars are multifaceted objects, and their production requires massive coordination of information and data. Even the environmental friendliness of hybrid cars has been called into question. This makes it important to create cars that reduce environmental impact and solve problems. One way to do this is to be smarter about the production process.

Logistics are a crucial part of any operation. The automotive network logistics hub will need to manage vehicle-related inbound and outbound traffic. Distribution, upgrades, and servicing will be carefully tracked. This will enable more efficient processes at the plant and at the service level. People will receive cars that match their needs sooner. They will also enjoy faster, smarter service.

Other benefits: Each customer or single point car dealer will be able to track cars and parts with ease. This enables better warranty and claims management, keeps customers happy, and ensures better relationships at the dealership level.

Both inbound and outbound logistics will rely on company or cloud-based systems. Automotive enterprise resources planning software will be crucial to production and commerce. Automotive supplier relationships and the automotive manufacturing process will both depend on smart software. It must meet the needs of manufacturers, dealers, and customers.

In order to best meet these needs, supply-side coordination will be crucial.

Supply-side coordination

Matching supply and demand is critical to a well-functioning automotive industry. It can ease market volatility and reduce inventory that is dormant with high carrying costs. The effect is better procurement and distribution. This helps reduce waste and dissatisfaction all around.

The definition of supply-side economics holds that the best way to create a booming economy is to make it easy to produce goods and offer services. We believe it is more complicated than that. Coordinating automotive suppliers is key: Smart plants must talk to dealers, dealers must communicate with customers, and all must use data from service providers. This offers the best chance of a robust, streamlined, and waste-free economy.

Automotive product life-cycle management will also benefit. Tracking each stage of production, sales, and use is crucial, offering information about what works and what doesn’t. It will help providers tweak models or completely reimagine them. And it will enable various manufacturers to work together toward common goals.

Traffic safety is one example. The National Highway Traffic Safety Administration collates vast quantities of traffic data every year. Coordinating this data with supply-side efforts will make cars safer from the get-go.

In other words, ensuring the automotive industry offers the right supply will make roads a safer, smarter, better place to be.

A budding future

To learn more about digital transformation in the automotive industry, click here.

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Larry Stolle

About Larry Stolle

Larry Stolle is the senior global marketing director for the Automotive Industry at SAP. He has over 45 years of experience in the automotive industry with experience, ranging from dealerships to manufacturers and importers to technology companies such as IBM. Stolle currently holds two patents for dealer and manufacturer communications and for quality insights.

How The Digital Age Is Driving Auto Industry Transformation

Chet Harter

Few companies are more dependent on technological sophistication than those in the automobile industry. As fast as digital technology is developing, savvy consumers still want more. But consumer demand is just one of the drivers pushing this transformation to digital. Others include Big Data, itself. Mobility and connectivity also play major roles as transformation drivers.

Consumer behavior

From design to retail sales, the auto industry is transforming faster than ever. Consumer demand drives this rapid transition through digital marketing. Consumers have access to this marketing anywhere and anytime at their discretion. When they feel ready to dig deeper, consumers can research vehicles online. They can even set up the vehicle purchase online through franchised distribution channels.

As Big Data makes more information available to them, consumers can take part in communication and collaboration all along the value chain. They can take advantage of value-added services from adjacent industries like the travel industry. And most important of all is their fascination with in-car connectivity and vehicle telematics.

Connectivity

Today’s consumers enjoy high levels of connectivity. These levels stretch the limits of innovation. New vehicle buyers are experienced with social media and smart devices. They want and expect these things in their cars. And not only are consumers connected, their vehicles are connected, too. Today’s cars share connectivity with their drivers and with other vehicles. They are connected to external networks such as General Motors’ OnStar monitoring service. This trend will only continue to develop further.

Our cars can now diagnose their own problems and warn us of them as the problems develop. Vehicle insights and analytics create and protect value for the consumer. As these are demanded by consumers, they also create value for the companies producing the vehicles.

KPMG, a professional auditing service in The Netherlands, conducts an annual survey of auto industry executives. Their 2016 global survey indicates that connectivity is one of the three most urgent imperatives for industry decision-making.

Connected consumers have access to a range of new technologies and information. This connectivity creates an omnichannel of seamless experiences in-car, online, and everywhere in between. We are rapidly moving toward a time when we will have connected fueling, connected parking, and automated payment systems. We will have connected electric vehicle re-charging, vehicle reservations, and payments.

The U.S. Department of Transportation (USDOT) estimates that vehicle-to-external connectivity could prevent 70 percent of vehicle crashes. And revenue from connected vehicles is expected to grow to $36.6 billion by 2025.

Digital data

Data itself is driving much of this transition. Big Data provides information on a wider scale. And vehicle data drives a need for sensors and in-car electronic monitoring devices. Portable computers interface with the consumer’s vehicle for data recording and transfer. And our vehicles are rapidly moving toward a time when the vehicle itself will be an extension of data. They will be data-connected vehicles in an automotive network of information. We are already seeing subscription services based on multi-channel access.

Autonomous vehicles are on the horizon. They are already warning drivers and taking control when it is necessary. They are monitoring and relaying information in real time on safety issues. They offer predictive data about other vehicles and traffic situations. In-car technologies already include cameras, maps, software, GPS, radar, and lasers. When enabled, automated driver assistance systems can take over in emergency situations.

The end point in this progression lies in the self-navigating driverless vehicle. These are not far off in the future. The multinational management firm, Boston Consulting Group, says the market for these cars may be worth $42 billion.

Mobility

Intelligent and agile transportation networks have changed the auto industry’s concept of mobility. There has been a shift in focus from products to services. We are seeing increasing demand for services that bundle mobility with other ancillary service offerings. These integrated mobility services become shared experiences, shared services. Mobility is now just-in-time and on-demand. We are beginning to see individualized mobility for both short distance and long-haul situations.

International management consulting firm Oliver Wyman predicts that there will be up to $100 billion potential value in mobility services.

The future: Where is this taking us?

Is there a down side to all of this? Yes, there is, but it is just one of many hurdles that the industry is fighting to overcome. The idea of driverless cars is not attractive to people who enjoy driving their cars. This, however, is just one factor in a volatile market situation.

But the upside is considerable. There will be tremendous improvement in traffic safety. Traffic deaths will plummet. The insurance industry will save billions of dollars in costs.

Besides, there is no stopping this future. The automotive industry value chain is already in transition to a digital network. It is already approaching the next-generation ecosystem. The logical prediction is that fairly soon, at least some vehicles will be driverless. To meet these growing industry demands, automotive companies are re-imagining their business models. They are looking to the future.

To learn more about digital transformation in the automotive industry, click here.

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Chet Harter

About Chet Harter

Chet Harter is a member of Industry Value Engineering at SAP and is the North American lead for Automotive. For over 12 years, Harter has helped many of SAP’s OEM, supplier, and dealer customers in the automotive, truck, and heavy equipment segments apply new technology to address current business issues and opportunities. Prior to SAP, he spent 12 years in various positions in materials and production management for global tier 1 supplier companies.

How Much Will Digital Cannibalization Eat into Your Business?

Fawn Fitter

Former Cisco CEO John Chambers predicts that 40% of companies will crumble when they fail to complete a successful digital transformation.

These legacy companies may be trying to keep up with insurgent companies that are introducing disruptive technologies, but they’re being held back by the ease of doing business the way they always have – or by how vehemently their customers object to change.

Most organizations today know that they have to embrace innovation. The question is whether they can put a digital business model in place without damaging their existing business so badly that they don’t survive the transition. We gathered a panel of experts to discuss the fine line between disruption and destruction.

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qa_qIn 2011, when Netflix hiked prices and tried to split its streaming and DVD-bymail services, it lost 3.25% of its customer base and 75% of its market capitalization.²︐³ What can we learn from that?

Scott Anthony: That debacle shows that sometimes you can get ahead of your customers. The key is to manage things at the pace of the market, not at your internal speed. You need to know what your customers are looking for and what they’re willing to tolerate. Sometimes companies forget what their customers want and care about, and they try to push things on them before they’re ready.

R. “Ray” Wang: You need to be able to split your traditional business and your growth business so that you can focus on big shifts instead of moving the needle 2%. Netflix was responding to its customers – by deciding not to define its brand too narrowly.

qa_qDoes disruption always involve cannibalizing your own business?

Wang: You can’t design new experiences in existing systems. But you have to make sure you manage the revenue stream on the way down in the old business model while managing the growth of the new one.

Merijn Helle: Traditional brick-and-mortar stores are putting a lot of capital into digital initiatives that aren’t paying enough back yet in the form of online sales, and they’re cannibalizing their profits so they can deliver a single authentic experience. Customers don’t see channels, they see brands; and they want to interact with brands seamlessly in real time, regardless of channel or format.

Lars Bastian: In manufacturing, new technologies aren’t about disrupting your business model as much as they are about expanding it. Think about predictive maintenance, the ability to warn customers when the product they’ve purchased will need service. You’re not going to lose customers by introducing new processes. You have to add these digitized services to remain competitive.

qa_qIs cannibalizing your own business better or worse than losing market share to a more innovative competitor?

Michael Liebhold: You have to create that digital business and mandate it to grow. If you cannibalize the existing business, that’s just the price you have to pay.

Wang: Companies that cannibalize their own businesses are the ones that survive. If you don’t do it, someone else will. What we’re really talking about is “Why do you exist? Why does anyone want to buy from you?”

Anthony: I’m not sure that’s the right question. The fundamental question is what you’re using disruption to do. How do you use it to strengthen what you’re doing today, and what new things does it enable? I think you can get so consumed with all the changes that reconfigure what you’re doing today that you do only that. And if you do only that, your business becomes smaller, less significant, and less interesting.

qa_qSo how should companies think about smart disruption?

Anthony: Leaders have to reconfigure today and imagine tomorrow at the same time. It’s not either/or. Every disruptive threat has an equal, if not greater, opportunity. When disruption strikes, it’s a mistake only to feel the threat to your legacy business. It’s an opportunity to expand into a different marke.

SAP_Disruption_QA_images2400x1600_4Liebhold: It starts at the top. You can’t ask a CEO for an eight-figure budget to upgrade a cloud analytics system if the C-suite doesn’t understand the power of integrating data from across all the legacy systems. So the first task is to educate the senior team so it can approve the budgets.

Scott Underwood: Some of the most interesting questions are internal organizational questions, keeping people from feeling that their livelihoods are in danger or introducing ways to keep them engaged.

Leon Segal: Absolutely. If you want to enter a new market or introduce a new product, there’s a whole chain of stakeholders – including your own employees and the distribution chain. Their experiences are also new. Once you start looking for things that affect their experience, you can’t help doing it. You walk around the office and say, “That doesn’t look right, they don’t look happy. Maybe we should change that around.”

Fawn Fitter is a freelance writer specializing in business and technology. 

To learn more about how to disrupt your business without destroying it, read the in-depth report Digital Disruption: When to Cook the Golden Goose.

Download the PDF (1.2MB)

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Creating A New Employee Experience: Is HR Turning The Corner?

Estelle Lagorce

Businesses and workforces in every industry continue to face major disruption. HR has sometimes struggled to keep up with the accelerating pace of change, yet 2016 could mark a turning point. Although there’s still a long way to go, Deloitte’s new Global Human Capital Trends report shows that HR is now making impressive strides in innovation, reskilling, and adapting to changing workforce and business demands.

So how can HR take the lead in this exciting digital business world? Where are the best opportunities to drive business growth? What capabilities and skills will be needed in the future? In the first of a series of blogs, we focus on one of the key trends driving HR transformation: the growing importance of design thinking in crafting the employee experience.

Focus on the person, not the process

Today’s employees are already inundated with a flood of e-mails, messages, and meetings – so the last thing they want are HR processes that add to the burden. And with the huge growth in mobile devices, they’re also accustomed to interacting with technology in a way that is simple, intuitive, and pleasurable. So it’s not surprising that 79% of executives in this year’s Global Human Capital Trends survey rated design thinking – which puts the employee experience at the center – an “important” or “very important” issue (see figure 1).

Transform HR Figure1 People Analytics

Figure 1: Design thinking: Percentage of respondents rating this trend “important” or “very important”  

In simple terms, design thinking means focusing on the person and the experience, not the process. The key question that HR needs to ask is: “what does a great employee experience look like from end to end?” That means studying people at work and creating “personas” and “profiles” to understand their demographics, environment, and challenges. This implicitly drives a more thoughtful and human approach to business that makes the workplace more attractive to existing and future employees. “Design thinking really is about reevaluating the way HR is being done in the context of the employee experience,” explains Erica Volini, leader of Deloitte Consulting LLP’s HR Transformation Practice.

But does it work? The data from this year’s survey certainly points that way. Companies growing by 10% or more a year are more than twice as likely to report that they are ready to incorporate design thinking, compared to their counterparts who are reporting stagnant levels of growth. Design thinking can also make a huge difference in how companies are perceived, which is crucial in recruiting and retaining the right people. Done well, design thinking promotes a virtuous cycle: generating higher levels of employee satisfaction, greater engagement, and higher productivity for the company.

Learn more

Deloitte’s Global Human Capital Trends 2016 is one of the largest global surveys of its kind, with 7,000 HR and non-HR respondents covering a wide range of industries across 130 countries. “Every single industry is being disrupted; that’s the theme that resonates through the report,” says Erica Volini. “There’s a real opportunity for HR to use this report to change the dialog and make it about what’s happening in the business and ideas to move forward.”

To find out more about HR transformation trends, priorities, and practices:

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Estelle Lagorce

About Estelle Lagorce

Estelle Lagorce is the Director, Global Partner Marketing, at SAP. She leads the global planning, successful implementation and business impact of integrated marketing programs with top global Strategic Partner across priority regions and countries (demand generation, thought leadership).