Uncharted Territories: Moving towards End-to-end Product Transformation Support in the Automotive Sector
Over the last half of a decade, the automotive industry has been witnessing a radical shift in the product development lifecycle. Growing investment and demand for autonomous technologies, edge-enablement, and electrification have presented a challenge for OEMs and ESPs alike. The need for shorter product development lifecycles is pushing automotive manufacturers to adopt practices like platform consolidation, and leaner, more decentralized product design and development. OEMs have been gradually warming up to the idea of end-to-end offshoring of product transformation activities.
But there’s a catch. Despite the OEMs’ growing need to outsource product development and transformation, ESPs are, to a great extent, underprepared for the shift. In a fragmented services ecosystem, managing the numerous dynamics, such as technical feasibility, market preferences, numerous testing requirements, and distributed product designing, pose significantly difficult obstacles to overcome. Most ESPs fall short of being adequately equipped to assume complete ownership of the process.
As the product development process becomes increasingly distributed, implementing change management at the product level becomes more cumbersome. The close collaboration between the development teams (OEMs and ESPs) depends on clear, real-time communication. Additionally, the multiple levels of approvals that need to be achieved at each stage add to the complexity. And with most OEMs still relying on paper- or Excel-based manual processes, tracking change across the entire program – from design to production and from production to distribution – remains a largely disparate and unstructured practice.
A Differentiated Approach for Bridging the OEM-ESP Gap
When it comes to providing end-to-end product transformation services, it is important to have a holistic approach that covers multiple products in different target market segments. But product transformation projects can vary significantly in terms of scope and complexity.
On the one hand, it could involve routine product enhancements such as modifying the headlights or designing a new grille. On the other, it could be a complete redesigning of the top hat, which requires significant product development expertise. In the first of these two scenarios, the degree of competence of ESPs is limited to specific areas of product development with little to no need for system integrations.
The second scenario, however, requires ESPs to exhibit capabilities across the entire product development phase, including project management, conceptualization, and design engineering. Moreover, ESPs must also be capable of supporting system integrations, testing and validation, prototyping, and quality assurance. In this case, ESPs must have access to the complete service ecosystem that combines the principles of design and performance, using state-of-the-art tools and developmental technologies.
For an ESP assuming complete ownership of the product transformation journey, the responsibilities do not end with providing comprehensive technical expertise. To provide a superlative experience, they must also better manage the complexities of supplier networks and overcome cultural barriers to collaboration, such as language differences.
At Tech Mahindra, for instance, while engaging with a major global automotive manufacturer in a product transformation journey, we adopted a “think like an OEM, execute like an ESP” approach. This allowed us to simultaneously develop a cost-effective roadmap and adhere to strict go-to-market timelines. Moreover, we implemented a strong collaborative environment that helped us operate as an extended delivery excellence center for the OEM.
To overcome the issues around change management, we implemented the AutoNXT digital platform which served as a digital collaboration tool to provide end-to-end visibility of the vehicle development lifecycle. By bringing together all the aspects of product transformation – product cost optimization, testing and validation, processes, and design – the platform enabled a holistic product lifecycle management (PLM) framework that addresses every stage of the journey, from pre-concept to after sales support.
Envisioning the NXT.NOW™ Future of Automotive
In the “new normal,” we can expect to see a greater emphasis on distributed operational models. Automotive OEMs will likely increase outsourcing engineering services with more focus on end-to-end support. From an operational perspective, the COVID-19 outbreak has significantly accelerated developments that had begun several years ago in the automotive sector. And as we move forward, OEMs can expect to see this pacy transformation become a mainstay in technological and cultural innovation.
At Tech Mahindra, we call this NXT.NOW™: an aspiration that we have built on our promise to IMAGINE, BUILD, and RUN revolutionary business models of the future across organizations today. In the context at hand, this will translate to a collaborative ecosystem of OEMs and ESPs that leverage emerging technologies to foster newer, more efficient operational and business models.
With the rise of autonomous connected vehicles and subsequent cybersecurity aspects, ESPs will also play a key role in developing software management changes and innovating automation layers at the product level. In such a future, OEMs that can extract the greatest value from their partnerships with ESPs will be positioned perfectly to implement the right strategies and gain market share.
