Servitization opportunities for automakers with a future-ready service delivery platform

Speakers:

Omkar Panse, Head – Digital Connected Solutions, KPIT

The automotive industry is experiencing a paradigm shift. As future-ready mobility technologies and trends disrupt traditional vehicle sales and ownership models, they force automakers to rethink business models and adopt servitization to enhance consumer value. KPIT’s Omkar Panse discusses how leveraging connectivity, IoT and digitalization can harness vehicle-generated data and present opportunities for revenue growth.

Servitization opportunities for automakers

Successful servitization across consumer devices and auto sectors have helped maximise service-led revenues and offset uncertainty of device sales by focusing on:

• Using products to sell outcome-as-a-service as against selling the product itself as a one-off sale
• Offering additional services to supplement traditional products to create recurring revenue streams

This has accelerated mobility shifts as CASE(Connected, Autonomous, Shared, Electrified) gains ground through:

• Diffusion of advanced tech via connectivity, AI/ML etc.
• Changing mobility behaviours by building vehicles for a certain purpose
• Shifting markets and revenue pools from one-time sale of cars to exploring spare parts’ sale and services as shared mobility, connected features and upgrades become critical
• Competition and cooperation between OEMs and mobility service providers will define how these play out
• Newer purchasing behaviours due to COVID19 where customers prefer digital channels for transactions and constant access to a private vehicle

Enablers of Servitization

• OEMs leverage new opportunities by adding a digital layer onto advanced on-board E/E systems — for data capture and designing of onboard and offboard apps, cloud connectivity etc. promoting a symbiotic relation with third-party service providers
• In-vehicle tech – connectivity, sensors, reimagined user experience and software platforms
• Robust Infrastructural support – 4G/5G connectivity, On prem/hybrid/public cloud. Content and B2B service providers enhance customer value proposition to introduce multiple use-cases

In this context, KPIT leverages emotion-driven use-cases and analyses experiences so context takes center- stage in solutions deployed to OEMs.

Limitations of the current approach

Lack of flexibility: Despite robust telematics, cloud, high bandwidth connectivity, existing systems don’t enable enhanced capabilities.

Limited design goals: Most systems lack the ability to run the services at the edge making it tough to update or change the software and impossible to cloud-ify the apps.

Non-ubiquitous connectivity onboard: Telematics ensures connectivity but in vehicles where it isn’t onboard – who pays for it on an ongoing basis?

Concerns around cybersecurity and data privacy: Low cloud penetration rates and data either on-premise or implemented using closed-ended legacy technologies is concerning.

What can accelerate Servitization?

A future-ready, API-led service delivery platform and architecture

Vehicle: Critical for data, control and services going to the cloud. Future-ready vehicles need bi-directional communication and mobile apps — important touchpoints for servitization.

Web apps: Located inside the OEM or partner ecosystems.

App marketplace: Checks how OEMs rethink this.

App ecosystem: Includes development, deployment and launch of onboard tech to support apps that focus on vehicle-generated data. OEMs must leverage use-cases related to service or vehicle commerce.

Cohesive enterprise system: Comprises OEMs, data, parts, third-party ecosystems, their programs and any value-addition by B2B players via services over the OEM platform.

Logistics: Around systems such as OTA updates are critical to Autonomous vehicles as are the apps and content delivered inside the car and software that can fix a problem via a software update. So, it’s important that Application Service Management, Device Lifecycle Management, Diagnostic Services, Calibration etc. fit together.

Device: The vehicle itself and its connectivity module must be IoT-ready and integrate with cloud platforms, undertake bi-directional communications and deliver services and content into it. As Edge Computing becomes important, data transfer to the cloud and Situational Data Logging takes center-stage.

Hygiene: Not all platforms are engineered as API-led service driven platforms. Can emergent microservice- based architectures manifest themselves as API-led?

Infrastructure as a core: IaaS vs PaaS pits faster time-to-market against balancing infrastructure costs. Disaster Recovery becomes crucial.

Data security and privacy: Covers the onboard and cloud systems and mandates rapid transition to the Data Hub.

While ML, Context stitching and the Service Augmentation layers, clearly absent in current systems, become key, it’s imperative to be ready and engineer services for future contexts.

Kpit solutions and services enabling Servitization

OTA updates:

KPIT’s future-ready OTA solution built ground-up, focuses on integration with larger platforms. Updates become critical as software inter-dependency and complexity increases. The Uptane-compliant ready solution is focused on Central Compute Architecture to ensure confluence of apps-content-software. KPIT’s Service support spans consulting on architecture, software integration, end-to-end cloud and OTA configuration etc.

Component Remaining Useful Life:

KPITs solution harnesses vehicle and system data to deliver value to customers. OEMs may customize this to their requirements. It also offers models to jumpstart development — battery SOC/SOH, Spark Plug etc. — even as Cloud agnostic components sitting on AWS or Azure, increase. An experimental portal for OEMs to upload data and create test models, augmenting OEM teams for data analyses, data wrangling etc. are also offered.

Integrated Asset Management:

Apart from the traditional ones, this also focuses on electrification-related use-cases harbouring exciting possibilities and bridges the in-vehicle and connected worlds for OEMs and customers while unlocking value to accelerate servitization.

Conclusion

A future-ready, scalable, API-led servitization architecture based on better connectivity and secure data is a well-orchestrated approach. By combining in-vehicle architecture with cloud technologies to boost servitization, OEMs can unlock potential across cars, commercial vehicle and off-highway segments.