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December 17th, 2019

Why the Automotive Sector Must Become More Proactive About Technology Strategy in the 2020s

Automakers face nonstop demands to embrace new technologies. One year, it’s smartphone integration. The next year, it’s big data. Then it’s artificial intelligence and machine learning (AI/ML).

In such a highly competitive industry, GM and Toyota can’t afford to let Ford and Volkswagen gain a technology edge. Thus, it’s only natural that industry players tend to be reactive to demands for new tech. The trouble is, companies across the sector have created patchworks of solutions and silos that are becoming increasingly difficult to manage. Technical debts are piling up amid mounting consumer demands and rapid-fire technology innovation.

In the 2020s, automakers will face a reckoning. They can’t just keep plugging in new technologies as the need arises. They need a more proactive, strategic approach:

Why will this shift be so important in the coming decade? These challenges spring to mind:

Social and Technical Convergence

Consumers expect their vehicles to be computing devices that anticipate their needs and improves their lives. Everything is getting smarter — from the speakers in people’s living rooms to the cities where they work and play. Technical behemoths like Google, Apple and Microsoft are getting into the connected-transportation business.

These and many more social and technical developments will pick up speed in the 2020s. But they won’t happen in isolation. They’ll converge. Automakers need a robust, sophisticated technology strategy to navigate this convergence.

5G Connectivity

Most cars rolling off assembly lines in 2019 still have 3G communication modules. Meanwhile, everybody in the technology sphere is gearing up for 5G. The best news for OEMs is that consumer adoption of 5G is at least two years away.

Sure, some consumers will use tethered 5G smartphones to bring high-bandwidth infotainment services into their cars within a few years. But it’s a safe bet that 5G won’t be a mainstream technology until mid-decade.

Nevertheless, automakers have to start planning for 5G in 2020. Given the long production cycles of the automotive industry, OEMs cannot risk getting outmaneuvered by disruptive startups. They need to be ready when 5G hits the mainstream.

Electrification and Automation 

Though self-driving vehicles pose immense technical challenges that may well delay Level 5 autonomy until the end of the 2020s, the evolution of in-car automation will bring a host of new driver-assist features. At the same time, electric cars and trucks will become increasingly common. Moreover, smaller battery-powered devices like scooters and drones could have a significant impact on mobility and transportation as the decade unfolds.

Advances in AI/ML and robotic process automation will be central to the rise of electrification in the coming decade. Learning algorithms, data science and advanced analytics have the potential to transform transportation, from sourcing to production to marketing to service. These are profoundly complex innovations that must dovetail with a forward-looking technical strategy.

Privacy and Regulation

Everybody in the transportation business needs to think deeply about how data is used, stored and protected. Customers and colleagues must be able to trust that tracking and personalization technologies won’t be misused.

As the risks of automation and connected travel start to rival the rewards, governments will get more deeply involved in creating standards and boundaries to protect people and their data. Complying with these rules will be a constant challenge for OEMs in the years to come.

DMI: A Partner with a Transformation Framework

DMI’s automotive industry experts know how to build delightful consumer experiences, implement automation and ensure compliance. These are tough jobs in their own right. Doing them together brings a quantum leap in difficulty.

That’s why we developed a converged framework that gives OEMs precise guidance on transforming their corporate culture while crafting an in-depth technology strategy. The framework starts with consulting workshops that help companies author a persuasive narrative for change. Next, it shows OEMs how to choose technical solutions that best fit their change narrative.

The technology reckoning of the 2020s will happen. DMI’s convergence framework gives OEMs the tools they need to confront it.

— James Bydalek, automotive and transportation, industry general manager

Tags: 3G 5G AI auto ML vehicles

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