Here are 5 insights from studying future trends and discussing the Future of Software development with tech leaders.
1. Software is changing the traditional OEM’s business models.
20 years ago, the HW/SW value-to-effort ratio in developing electronic products were often around 80% hardware vs. 20% software. Today this is continuously changing towards a 10% hardware vs. 90% software split. What makes it difficult is that developing hardware has not become less complex!
2. People expect their purchased products to evolve with their needs.
Some OEM’s are developing subscription models/services that are not limited to sold products. For automotive OEM’s to stay competitive it’s essential for leaders to understand that digitally savvy kids will grow up and change everything. Think of software services that the customers are going to demand without limiting the product and services at the point of sell.
Automotive companies need to reboot their business models and offerings, which starts in strategy, product management and sales. In order to do this the leadership must take bold decisions and start thinking about new strategies. Should we be a mobility or a software company? How can we continuously sell services after the products have been shipped and sold?
3. Agile development will challenge traditional development.
There are many technology drivers in the automotive industry, AI, Sensors, Connectivity, Electrification, Big Data, Cloud Computing etc, that have led to an UNSUSTAINABLE GAP between software complexity and productivity levels. FEATURES sold with a product should not be treated as a fixed offer, at the point of sell, instead the product should be developed and sold with upgradable services with FEATURES treated as variables.
4. Logistics & Data collection can be used to gain a competitive advantage.
How do OEM’s bypass large distribution centers and dealers? It will be essential to find ways to interact with the end customers through new services and efficient delivery options. This can be done by implementing Cloud-based transportations systems and enhanced ERP services. By enhance the logistics processes and practices the OEM’s can achieve the competitive advantage, control the data, and outperform its competitors.
5. Software still needs hardware in the physical world to function.
The Automotive Industry has tremendous knowledge and capabilities, refined over decades. Software is a means and not the purpose. Even the most advanced AI in an AV will require sensors, computing power in the edge & the cloud to transfer robust data between these instances. All of this is operated, consumed or created by countless human beings.