Service and After-Sales in the Age of the Digital Revolution

Together, Consulting4Drive and IAV help their customers to set up new business models

The digital revolution in the automotive industry is opening up fascinating, lucrative opportunities for service and after-sales. But the manufacturers and suppliers will have to develop new skills and expertise to tap into this potential and learn how to cooperate in networks and across different line organizations. Consulting4Drive develops tailor-made digital business models and implements them with IAV in suitable solutions for volume production.

Wireless diagnosis, predictive maintenance, services on demand or online updates ”over the air“: Digitization and connectivity make it possible for OEMs to offer their customers interesting services even after a vehicle has been purchased, opening up new sources of revenue and enhancing loyalty to their brands, while at the same time satisfying the increased expectations of their customers. At the moment, however, they are not adequately prepared.

”Successful positioning of the new offers in after-sales and service makes it necessary for the companies to establish new models and innovative cooperation networks“, says Michael Junger, partner at Consulting4Drive (C4D). ”Various line organizations including engineering, sales, IT and after-sales should be involved already during the early solution conception process. The new concepts have to be integrated in product and service development right from the start for optimum support and marketing.“

Lots of unused potential

The services are developed according to the principle of ”plan (concept/requirement), build (implementation/acceptance) and run (operation)“. If, for example, the after-sales department is not involved from the beginning of the development process, the department has very limited chances to include the requirements from the customers point of view and the market. Huge challenges are frequently involved here in practice, for example when it comes to optimum use of digital services in the vehicles, global operation of such services, targeted evaluation of the data and developing appropriate services in line with the results. ”The OEMs have practically unlimited scope when it comes to ideas“, says Junger. ”But good sales ideas are frequently hindered by the lack of important sensor data, so that lots of potentials are still unused.“

There are heaps of possibilities for new business models. Software updates, for example, can be loaded ”over the air“ by wireless trans- mission in vehicles while they are not in motion. ”Tesla shows how to do this successfully“, says Junger. ”Wireless updates reduce the need to keep going back to the dealership or repair shop, with a huge convenience bonus for consumers. This is a real differenciation attribute for an OEM.“ In his opinion, by 2020 already more than 20% of all vehicles will be connected by their equipment and technology, thus making the widespread introduction of such services interesting also from an economic point of view. Preventive, customized maintenance

Regular service appointments for a vehicle on reaching a certain mileage could also become superfluous thanks to digitization and connectivity. Instead, in future the vehicle would detect pending problems on its own using sensor data, and inform the driver when something needs to be done. "Sensors and actuators in vehicles are already capable of detecting the degree of wear in certain components; the customer is then informed of the need to go to his nearest repair shop", explains Junger. Local repair shops can then use the data from the owner's calendar and his journey profile to automatically suggest an appointment that includes some special offers."

Implementing new business models along these lines demands more than new forms of cooperation. Automotive manufacturers and suppliers also have to acquire skills and expertise that they currently do not have to a sufficient extent. They offer outstanding know-how in terms of vehicle hardware, electric and electronic systems as well as mechatronic components, but when it comes to IT expertise in important areas such as data analytics and security/privacy, they still tend to depend on external providers. In future they will need their own information engineers to work together with the developers in order to come up with new business model concepts and put these into series production.

Integrating service and after-sales in the development process

The C4D consultants want to help manufacturers and suppliers in creating new after-sales services and offers so that these aspects are integrated in the development processes at an early stage. "We structure business models and guide our customers through to the start of production – also working together with our colleagues from IAV who assess the technical feasibility of the ideas", says Junger. "This is a USP that makes us stand out in the market, combining strategic consulting with the know-how of one of the world's leading engineering partners." Experts from both companies are currently working on a project for implementing innovative business models in the commercial-vehicle sector, with immediate testing in a lab environment.

After all, one thing is certain: Besides new development processes, the software sector also has to start picking up speed. Before long, the automotive industry will probably be using IT expressions such as "agile programming" and "pair programming" as a matter of course.