What does the customer expect from the manufacturer and dealer?

1. Is your company singing from
the same digital hymn sheet?
European Automotive Summit 11th of June in Amsterdam

2. Copyright © 2015 Capgemini Consulting. All rights reserved.
2
Let’s get connected ...
Markus Winkler
Senior Vice President
Leading Global Market Unit Automotive
at Capgemini Consulting
Key Portfolio is around Digital Transformation, Customer
Centricity, CRM, Digital Manufacturing and Insight & Data
Delivering sustainable client value with strong focus in
delivering large scale Digital Transformation programs from
strategy to implementation in a joint collaborative approach

3. Copyright © 2015 Capgemini Consulting. All rights reserved.
3
WHY do we need a digital hymn sheet?
Competitive Pressure
Employee Demand
Consumer
„Pull“Digital Transformation
in Automotive
Technology
„Push“

4. Digital Transformation
is the use of digital technology
to radically improve the
performance and/or reach of a
company.
The Capgemini Consulting/MIT View on Digital Transformation
4
Our joint research with the
MIT1)
has shown that a successful
digital transformation can have
a strong impact on a
company’s financial
performance.
+26%
Profita-
bility2)
+12%
Market
Value2)
1) Massachusetts Institute of Technology: Sloan School of Business
2) Compared to average performance of analyzed companies, according to the benchmark study. See Appendix for more details.
Telecom
Travel and
hospitality
Retail
Banking
Pharmaceuticals Consumer
Packaged Goods
Insurance
Utilities
Suppliers
High
Technology
Automotive
OEMs
C O N S E R V A T I V E S
F A S H I O N I S T A S D I G I R A T I
THE “HOW” - Transformation Management
B E G I N N E R S
THE“WHAT”-DigitalIntensity
Digital Transformation can radically improve business performance

5. 5
Is your company singing from the same digital hymn sheet?
Audience
…so that each of them create an individual sound.
Each Instrumentalist and Singer interpret the digital hymn
sheet differently …
Ideas
Concepts
Visions
…with various ideas for the digital hymn sheet.
Customers expect a „harmonized“ concert
We are all Composers of the digitization…

6. Copyright © 2015 Capgemini Consulting. All rights reserved.
6
What does the digital hymn sheet of the automotive industry look like?
Multi
Channel
Online
Sales
Future of
Retail
Future
Mobility
Connected
Car Big Data
?

7. More than 5 billion people are texting, tweeting and
browsing on mobile phones.
Copyright © 2015 Capgemini Consulting. All rights reserved.
7
Connection is the name of the game and customers are the reason why.
30 billion
pieces of content are shared on Facebook every month.
People upload 48 hours of new video to YouTube
every minute of every day.
By 2020, internet transactions (b2c and b2b) could reach
450 billion per day.
Customers are connected and the automotive industry needs to catch up.

8. Copyright © 2015 Capgemini Consulting. All rights reserved.
8
MercedesMe: Design your brand around the customer needs.
How does the (Auto)mobile value proposition in 2020 look like!
Are you ahead of the game?

9. Copyright © 2015 Capgemini Consulting. All rights reserved.
9
84% …expect digital innovation in the
showroom.
„At a dealer’s showroom I expect...”
Digital showroom experience – it is a long, long way to go!
29%
29%
31%
47%
Cars have digital info available
Virtual test drive stations
3D virtual vehicle configurator
Interactive touch screens
up to
65%…would use new service offerings.
63%
Mobile service
technician
coming home
67% 62%
Remote
diagnostics
Digital service
planning
„Showrooming“ – customers are using smart gadgets when visiting.
A digitalized dealership means more than having tablets!
Capgemini Cars Online 2014

10. Copyright © 2015 Capgemini Consulting. All rights reserved.
10
Likelihood to purchase a vehicle online…?
Many customers expect a change in the whole purchasing process!
Alternatives to dealer for vehicle purchase?
18%Retail store 17%Car Rental
company
…would purchase their vehicle online
44%
42%Directly from
manufacturer
21%Independent
online vendors
Capgemini Cars Online 2014
Online transactions will disrupt traditional Automotive sales.
Support online vehicle sales with sophisticated tools.

11. Copyright © 2015 Capgemini Consulting. All rights reserved.
11
BMW: Piloting online sales via Amazon in Japan.
Will we still need stationary dealers in the future?

12. Copyright © 2015 Capgemini Consulting. All rights reserved.
12
Shoppers consider alternatives for car ownership.
OEMs can earn money with mobility solutions. Do they still build cars in the future?
40% …consider alternative ownership
models.
Primary reason to choose alternative
mobility solutions
Capgemini Cars Online 2014

13. Copyright © 2015 Capgemini Consulting. All rights reserved.
14
Customers expect the car to be an extension of their home, office, club etc.
OEMs and dealers need to offer new consumer services.
.
Capgemini Cars Online 2014
Preferred connected car services (mature markets)
76%
75%
59%
Driving & Safety
Vehicle Management
Customer Care & After Sales Services
Infotainment 44%

14. Copyright © 2015 Capgemini Consulting. All rights reserved.
15
BMW: Augmented Reality glasses create new driving experience.
New gadgets create a „Want to have“ and „Want to use“ feeling!

15. Copyright © 2015 Capgemini Consulting. All rights reserved.
16
Today, the industry has still very little customer or vehicle knowledge.
Treat data like the new oil powering our industry!
Capgemini Cars Online 2014
Willingness to share connected car data?
…would share car data with manufacturer or dealer
80%
?
New Sources of data?
Customer
Vehicle Driving
Environment
Intelligent Business
Transform data into actionable insights

16. Better demand forecast
Impulse for repurchase
Copyright © 2015 Capgemini Consulting. All rights reserved.
17
Big data – New ways of doing business.
OEM‘s need to use their information to connect to their customers and become more efficient.
Micro Targeting & Loyalty
Time
Next best action

17. Copyright © 2015 Capgemini Consulting. All rights reserved.
18
Notes are written but HOW will you be capable to play and sing from the same
digital hymn sheet?
?
?
?
Companies need to focus not only on „the what“, but on „the how“ !

18. Copyright © 2015 Capgemini Consulting. All rights reserved.
19
Strong management capabilities are required in order to establish new digitization
concepts and business models
Innovation
Companies need to conciliate a common understanding of innovation culture and vision in organisation
and change management to succeed in their transformation.
Change Management
Leadership
Innovation Culture
Innovation Platform
Change approach
Coaching & Enabling
Sustainability
Vision & Mindset
Management culture
Mobilization

19. Copyright © 2015 Capgemini Consulting. All rights reserved.
20
Volkswagen opened an Electronics Research Laboratory (ERL) in
Silicon Valley The team mainly focus on new services.
Daimler and Volkswagen go “open”.
OEMs use different possibilities to build up a separate start-up structure.
CAR2GO used co-working spaces like “betahaus” in Berlin...
...to get new ideas from external sources.

20. Copyright © 2015 Capgemini Consulting. All rights reserved.
21
Tradition meets digital hip/hype-ness.
Big players face organisational challenges to encourage disruptive innovations.
Big Player
Start-Up
Rigidity
Project Set-up
Controlling
Departmental hierarchies
Agile
Trial & Error
Networking Management
Brainstorming & Idea CreationSteering Committees
Smart
Fast
Central

21. Copyright © 2015 Capgemini Consulting. All rights reserved.
22
Open Innovation – Magic formula or hollow promises.
Closed Open
Set an open innovation culture to create new opportunities in current and new markets.
Set a culture of innovation
• Listen to external & internal members
• Stay open
• Collaborate
• Go flat
• Embrace failures
Establish innovation platforms
• Create your own or use external platforms
• Feed your community
• Install incentives
• Control brainstorming processNew Market Current market New market

22. Copyright © 2015 Capgemini Consulting. All rights reserved.
23
Change = Fail?
Succeeding in transformation is still a big challenge for organisations and individuals.
What causes a change to fail?
61%
56%
56%
Insufficent engangement of management
Unclear vision & targets
Missing experience of change managers
No change approach 47%
Operational implementation & technical
problems
17%
Capgemini Consulting Market research
....of changes fail.70%

23. Copyright © 2015 Capgemini Consulting. All rights reserved.
24
Enablers for success in Change Management.
When the wind of change blows, some build walls other build windmills.

24. Copyright © 2015 Capgemini Consulting. All rights reserved.
25
Are you superman?
The expectations on change managers are high.
Capgemini CM Study 2015
Much is expected of managers in change processes.
79%
78%
70%
…needs to acts as a role model
…actively communicates the change
…is aware that his attitude to change has a
great influence on the success
Manager…
64%
57%
…takes clear decicions
…convinces staff that the change is for good
reasons

25. Copyright © 2015 Capgemini Consulting. All rights reserved.
26
He is committed to the change.PASSION
He brings the vision of change to the company.SPIRIT
He is calm, independent, experienced and a person of integrity.STANDING
He is open, clear and fair in his communication.DIALOGUE
His leadership style recognises and values others.EMPATHY
The attitude and behaviour of change leaders define five important
characteristics of effective change makers.
Find the right person for your change team.

26. Copyright © 2015 Capgemini Consulting. All rights reserved.
27
There is a lack of leadership understanding for the transformation process!
Responsible management needs to put proper change management into all transformation projects.
Capgemini CM Study 2015
Project control
Freedom and collaboration of entire organisation often missing
Incentive systems
No exhaustive implementation of incentive systems
Leadership team allocation
Combination of teams with different leader types not guaranteed
Leadership style
Leadership style often not considered in the staffing of change maker
positions
Leadership development
Systematic training with focus on change competencies not always offered

27. Copyright © 2015 Capgemini Consulting. All rights reserved.
28
Is your company singing from the same digital hymn sheet?
Only a well coordinated orchestra creates the extraordinary customer experience!

28. KEEP IN TOUCH WITH CAPGEMINI CONSULTING…
MARKUS WINKLER – SENIOR VICE PRESIDENT / HEAD OF AUTOMOTIVE
CAPGEMINI STUDY - CARS ONLINE 2014
CAPGEMINI STUDY – CHANGE MANAGEMENT STUDY 2015
29
http://www.capgemini-consulting.com/digital-transformation
Thank you for your attention!

29. 30
Within our Automotive service portfolio we help customers in current and future
topics for Automotive market and customer strategy
FUTURE RETAIL
EXCELLENCE
FUTURE
MOBILITY
FUTURE
OPERATIONSDIGITAL DISRUPTION has dramatically changed
consumers expectations and influenced
the interaction
between
consumers
and Automotive
companies
throughout
the lifecycle.
CONNECTED CUSTOMER
CONNECTED
VEHICLE
CONNECTED INSIGHTS
Connected Cars
embrace the
internet and
connect
THE CAR;
THE DRIVER AND
THE OFFLINE AND
CLOUD-BASED
ENVIRONMENT.
Analysis of consumer segments, their
behavior & preferences to evaluate
distinct fields of action to ACQUIRE new
customers, improve customer VALUE and
MINIMIZE customer churning.
STRATEGY & TRANSFORMATION DELIVERY CAPABILITIES

30. European Automotive Summit, 11th of June in Amsterdam