Automakers Urged to Develop Smart Software Systems for Enhanced Customer Value
Automakers are being encouraged to focus on developing and deploying vehicles equipped with smart software systems. These embedded software systems would allow for easier reconfigurability and upgrades, enabling automakers to capture a larger percentage of the customer’s lifetime value. Evangelos Simoudis, an investor and author, made this call during the Reuters Events Automotive USA 2023 conference in Detroit.
Simoudis, who is also the managing director of Silicon Valley-based Synapse Partners, emphasized the importance of artificial intelligence (AI) and data in shaping the future of mobility. He believes that these technologies are crucial ingredients in providing a flagship experience to customers, imparting a premium feeling. In his view, car companies need to become mobility partners with their customers, and this blueprint can be achieved through software-driven flagship experiences.
To make this vision a reality, Simoudis argued that automakers must rethink their business and organizational models. It’s not only about monetizing customer and vehicle-generated data; it also requires business model innovation. He highlighted the recruitment of former tech executives Doug Field at Ford and Mike Abbott at General Motors as examples of driving organizational transformation.
Simoudis suggested that traditional automakers adopt a culture of experimentation, drawing inspiration from tech companies like Netflix and Google. This shift would help these automakers transition from being hardware-centric to customer-centric, fostering innovation and responsiveness within their corporate cultures.
The call for smart software systems and business model reinvention aligns with the changing landscape of the automotive industry. As the industry progresses towards autonomous vehicles, connectivity, and shared mobility, automakers must seize the opportunity to enhance the customer experience. This involves exploring new revenue streams beyond the traditional automotive business model.
It is essential for automakers to recognize that AI and data-driven solutions can offer significant value to customers, going beyond the physical attributes of a vehicle. By embracing smart software systems, automakers can provide personalized and adaptable experiences that cater to individual preferences and needs, ultimately fostering stronger customer loyalty.
The road ahead may present challenges, but with the right mindset and strategic partnerships, automakers can successfully navigate these changes. The transformation from hardware to software-driven solutions will require ongoing collaboration and innovation to create products and services that truly add value for customers.
In conclusion, the demand for smart software systems in the automotive industry is growing. Automakers are urged to prioritize the development of embedded software that enables reconfigurability and upgrades. By embracing AI and data-driven solutions, manufacturers can become mobility partners with their customers, offering flagship experiences that go beyond the traditional automotive realm. Business model innovation and a shift towards a customer-centric culture are vital for automakers to thrive in this evolving landscape.
