How OEMs can Redefine their Role in the Software-driven Auto Industry

Driven by a marked shift in consumer demands, the automotive industry is witnessing a transformation from being hardware-first to software-first. Automakers are moving to a whole new world of software-defined and service-defined digital mobility. In a recent cover story by Autocar Professional, Shaveta Wadhera Jain, Managing Director - Industrial and Mobility, Accenture in India, elaborates on this change. Traditionally, revenue models relied on one-time vehicle sales and subsequent maintenance services. However, software defined vehicles (SDVs) will enable a shift toward continuous revenue models such as subscription services, in-vehicle services, data monetization, connected services among others.

According to Accenture’s report on ‘The New Automotive Industry Fast Lane is Software-defined,’ digitally enabled services in the automotive ecosystem are likely to drive a ten-fold increase to USD 3.5 trillion by 2040 and comprise more than 40% of the industry’s entire revenue.

Software is becoming key to product development. To stay ahead of competition, automotive original equipment manufacturers (OEMs) must recognize this and take an integrated, holistic approach, based on technology, with talent building the core. OEMs need to tackle challenges like balancing the desirability, viability and feasibility of software-led services with that of consumer willingness to pay for connected car functionalities and features; acquiring and retaining skilled software engineers, data privacy concerns and need of a cultural shift to adopt modern engineering practices like agile, cloud-native development. Read More | Discuss

NEWS & VIEWS

• How Accenture Helps OEMs in Product Innovation and Data-led Reinvention

In the software-defined vehicles space, Accenture is helping OEMs drive innovation and data-led reinvention leading to enhanced consumer mobility, increased speed-to-market while addressing safety and performance concerns. A recent media story highlights Accenture’s role and expertise in building and sustaining the technology required for SDVs. In the story, Dipti Vaishnav, Managing Director and Lead — Industrial and Mobility, Accenture in India, says that the collaboration between Accenture and OEMs is helping clients define their SDV strategy and roadmap for the future, including the execution of the complex architecture. Read More | Discuss 

• Bridging ER&D Gaps: The Tech and Talent Route to Reinvention

The auto sector’s transition to a software-led approach means vehicle manufacturers must re-evaluate their engineering research and development (ER&D) strategies. They must embrace the cultural shift to adopt modern engineering practices like agile, cloud-native development and model-based engineering, focusing on complex Electrical/Electronic (E/E) architecture. In an interview with Mobility Outlook, Raghavendra Kulkarni, Managing Director – Industry X, Advanced Technology Centers in India, Accenture, highlights existing ER&D gaps and potential solutions to bridge this gap. He points out how OEMs must embrace modern engineering methodologies, invest in talent and cross-skilling, enhance collaboration with technology partners and prioritize cybersecurity in their ER&D efforts. Read More | Discuss

• How can Automakers Create Value by Monetizing Digital Services

The new world of automotive — defined by digital services, including safety, comfort, operational and entertainment features—promises to generate significant revenues. Auto businesses need to either develop their own digital services or integrate a third-party digital platform into their vehicles. Both require harnessing data to learn more about consumers’ driving habits and preferences. Creating value through digital experiences also requires both cultural and process changes — which begin with a strong digital core. Accenture’s report on Monetizing Digital Services in Automotive indicates criteria like consumer price-sensitivity, control over end-to-end experience, competitive intensity and so on, that can help automakers define their monetization approach. Read More

• Strategic Plans for OEMs to Tackle a New Automotive World

The auto industry is preparing for a strategic transformation in the face of increased volatility, disruptions and evolving consumer needs. Forward-looking businesses—which transform their supply chain, manufacturing and sales as a response—will be able to adapt and thrive by harnessing technology to drive continuous reinvention. Accenture’s report on ‘Absorbing Disruptions’ recommends 10 ways—across digital tools, robust supply chains and modern manufacturing — by which all automotive businesses can differentiate, innovate and grow. Read More.

Accenture is ready to help as you begin to re-imagine your business. If you’d like to know more about how we can partner with you in your Reinvention journey, please feel free to contact us.

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