Why the Automotive Industry needs to be more agile

We are currently experiencing the Fifth Industrial Revolution, Artificial Intelligence (AI), and it set to once again to change the way we go about our daily lives. Within the Automotive Industry we are already seeing AI being used by some car manufacturers, but overall its uptake in the sector has been slow.

A recent report by the Capgemini Research Institute found that just 10% of respondents surveyed said that their organisations were deploying AI-driven initiatives across the entirety of its operations “with full scope and scale,” during 2018, compared to 7% in 2017. More surprisingly the report shows the number of automotive organisations that have “Not implemented any AI initiative” has increased from 26% in mid-2017 to 39% now.

The reasons behind this slow uptake are many and according to the Capgemini report include issues with legacy IT systems that do not talk to each other, question marks over availability and accuracy of data, and lack of skills. The hype and high expectations that initially came with AI may have turned into a more downbeat and pragmatic view as car companies are confronted the reality of implementation. Two of the biggest organisational hurdles identified were the difficulty in proving the benefits and return on investment at pilot stage (45%) and difficulty in selecting the use cases to scale (43%).

Digital/Mobility services within the automotive sector are receiving the greatest amount of attention with 22% of companies survived by Capgemini investing in ongoing implementation in this area. Followed by Information Technology (13%), Manufacturing/Operations (12%), Procurement (11%), Research & Development, and Engineering (10%), Customer/Driver Experience (8%), Marketing/Retail/Sales/After-sales (7%) and Supply Chain (4%).

The future market trend for connected vehicles is growing into a hot topic, along with the lack of female leaders in the automotive industry, particularly in this area. One person who is plugging both of these gaps is Samah Hallgren.

Samah Hallgren is bringing the Agile model of product development to the automotive industry.

Samah has been living in Sweden since she was seven and half years old, but she’s originally from Lebanon and has been working in the tech business for over 16 years. She realised at an early age that she was very curious in knowing how the technology we use around us worked and was put together.

“I used to make algorithms in my head to count how many cars that were parked in the parking station or how many sodas there were in the fridge at the pizza restaurant. It was very obvious for me that I wanted to study engineering and after my studies I wanted to get out as soon as possible in the business world and learn as much as possible. I love to dig in and enjoy getting stuck into the latest technology,” Samah told us.

After working some time with product launch management, Samah switched about four years ago from telecommunications to the automotive industry. Samah currently works at an innovation and development centre as a Product Management Leader and is responsible for building up a connectivity platform.

“Connectivity is a hot topic in the industry and is essential to both autonomous vehicles, smart cities and the primary driver of technology innovation. I believe the automotive industry will change a lot in the future and one of the most exciting advances in vehicle development is actually connectivity which will be driving the future of the car,” said Samah.

An area where I have already experienced connectivity in a car was in the new Mercedes-Benz A Class. Even without me telling the A Class after just a few days of me driving it, I got into the car and it told me how long my commute to work was going to be and to be honest this freaked me out just a bit.

This is part of the Mercedes-Benz “Best Customer Experience 4.0″ and the brand is now taking the next major step with this project. Customers can choose flexibly between channels and need only a single profile for this – the Mercedes me ID.

The Mercedes me activation rate for new Mercedes-Benz vehicles is over 90 percent, which currently are more than three million active Mercedes me users. Since the launch of Mercedes me in 2014, Mercedes-Benz has developed more than 80 mobility-related digital services – many more useful services are being added for users on a continuous basis.

The new A-Class is already set up for private car sharing: Mercedes me allows the new compact car to be shared with friends and family members. Operation is simple and secure using the Mercedes me app Car Sharing. Photograph by Daimler AG.

The company expects that 25 percent of worldwide vehicle purchases from Mercedes-Benz Cars will be made online by the year 2025. Physical retail outlets worldwide are also undergoing a transformation with new formats, locations and concepts as the result of “Best Customer Experience 4.0.”

The point of sale is becoming the point of experience. All information relating to the vehicle and services is becoming more tangible for the customer thanks to the new interactive presentation forms. Access to the product at the point of sale is becoming more intensive for the customer through technology, but at the same time simpler and more transparent.

“We want to offer our customers seamless luxury experiences and lasting memories – regardless of the time, place or channel they are using. Buying a Mercedes-Benz should become as easy as ordering a book for our customers,” said Britta Seeger, Member of the Board of Management of Daimler AG, responsible for Mercedes-Benz Cars Sales & Marketing.

This change from the traditional customer experience model is a reflection of the expectations of the younger generation who have high requirements of performance and expect everything to work smoothly.

“The young generation has no issues in being ‘unfaithful’ to a brand and will tryout a new product or products which seems better. Hence the importance of having a product which is user-friendly and also nowadays it needs to be environmentally friendly,” warns Samah.

Samah explains when she was working in the telecommunications industry she used to launch new products each quarter and in comparison in the automotive industry you can work on one single product for about 4-5 years before it hits the market. The automotive industry way of working is very traditional; using the waterfall model the process where you can track progress through different phases from requirement analysis, design, implementation, testing and maintenance.

“The opposite of this is the Agile model, which is a more iterative model and from my point of view and experience is crucial for the automotive industry to keep up with market changes, new trends, be one step ahead of the competition and survive as a sector,” explains Samah.

Samah is working with automotive manufacturers to implement the Agile model and warns that if the car companies don’t transform to the Agile way of working in the short term then they will not survive in the end. Some of the pros of using the Agile way of working are that time to market is faster and the productivity is much higher. During the product lifecycle the focus is on fast delivery of the business value, continuous improvement, flexibility and high quality delivery.

“We achieve high product quality by having regular check-ups during the development lifecycle. We capture issues in the early stages and this allows us as well to make changes. The customer gets to try out the product during the lifecycle and is very much involved in the product development,” said Samah.

If new changes are requested, adaptations can be made through the development process and they can be implemented at a low cost due to frequency of releases. By focusing on the needs of the customer, each release will deliver value. This is mainly used in software development but the design of the car components needs to take the same approach.

Components need to be less dependent on the software and need to be designed in a way that it would be simple to replace if new market trends are foreseen. The automotive sector focuses a lot on content and services nowadays, but what they actually need to focus on is the needs of the end customer and how the trends are changing.

“The key is to track the user behaviour after the vehicle has been launched, and then we know exactly what they use and how they use it. It’s vital to understand the needs of the end-customer for the future development and to prioritize accordingly,” added Samah.

I asked Samah about her work and what it’s like being a woman in this area of the automotive industry and she said “It’s a very interesting area and I’m surrounded by older men. The challenge is for sure massive. The advice I would give for women in my position would to be open minded and don’t get overwhelmed by the difficulties and to ask for advice and support when needed. Don’t be afraid to speak up and never give up no matter how difficult the road might look or the obstacles you bump into.”

The transformation of the automotive industry as part of the Fifth Industrial Revolution will see a massive shift of what the use of a car means to our personal transportation. It is great to see that there are women like Samah who are there at the forefront of this change leading the way for future female engineers.  

Photographs by Samah Hallgren and Daimler AG.