Can Automakers Monetize And Remain Competitive In The Era Of Uber?

Pat Bakey

The automotive industry has largely adopted predictive analytics, IoT, and artificial intelligence in its manufacturing operations, but increasing competition has forced auto companies to think outside of the box in the way they utilize this technology. Most notably, the ride-sharing era has affected consumer desire for ownership, sparking a competitive race to develop value-added services to fill this void. This industrial shift speaks to the potential that connectivity has in expanding and re-invigorating entire industries. IoT will continue to dramatically upend traditional business models while at the same time creating new opportunities to conceive and deploy new monetization options.

Recognizing this global trend, Hertz has completely reinvented the car rental experience – a hassle at its best and a nightmare at its worst. Imagine renting a car that comes synced with your travel itinerary and parking reservation information – and also doubles as a payment device when parking or fueling. This is just one case of how leveraging Big Data can completely transform the customer experience.

Putting a price (and ownership) on Big Data

Today, more data is being produced than ever before, and businesses across industries have been working to identify new business models that take advantage of this wealth of information. Case in point, several major players in the automotive industry have zeroed in on connectivity as a means of venturing past one-point sales and into the connected car industry – and the prospects are positive. McKinsey predicts that connected car data will reach $1.5 trillion by 2030.

However, businesses must take action to improve their data-driven insight processing in order to make this outlook a reality. For example, cloud-based analytics platforms fuel smarter decision-making and, by extension, improved design and reliability. The reason: cloud analytics platforms come equipped with advanced simulation and predictive capabilities that can help every employee enhance their work – from a C-suite executive deciding whether or not to expand into new markets to a shop floor worker looking to improve productivity.

The “connected car” industry will result in new networks

Far removed from the first inception of Henry Ford’s brainchild – the mass assembly line – the automotive and technology industries have become increasingly intertwined. The GMs and Toyotas of the world are exploring ways to expand their business using the latest connectivity and autonomous technology, welcoming in new business segments entirely. Picture connected cars that send driver behavior data to insurance companies – a now-plausible scenario that enables both industries to leverage the same platform to provide unique but differentiated services.

The car of the future will come equipped to deliver real-time insights, from spotting coffee promotions at a local grocery store to locating vacant parking spots – value-added services will make cars more practical than ever. SAP has already created the technical prototype; now it’s the service provider’s turn to follow suit. With the car of the future, the options are limitless.

Come visit the SAP stand (Hall 3, 3N31) at Mobile World Congress 2017 to get a 360 view of how SAP is working with its customers and partners to usher in a connected future. Visit our event website to learn more about our showcases and customer presentations.

This blog was originally posted on Forbes.


Pat Bakey

About Pat Bakey

Pat Bakey is the president of Industry Cloud for SAP. He is responsible for the industry cloud footprint, which covers 25 industries globally, the finance and extended supply chain lines of business and the go-to-market execution of SAP Business Suite 4 SAP HANA (SAP S/4HANA). By offering prescriptive cloud road maps by industry and lines of business, the Industry Cloud organization serves every customer in every cloud model (private, public, and hybrid), for any business size, anywhere in the world, enabling SAP’s customers to approach their digital transformation through an industry lens.