2023/06/28

Auto Lab Launch: Rethinking the automobile industry

Author: Jens Sulek, Executive Partner & Co-Lead IBM iX DACH

With the opening of the Auto Lab, IBM created a shared space for all stakeholders in the automotive industry to discuss technological developments and carry them into a joint future. The opening was accompanied by exciting keynotes highlighting market potential and technological possibilities, providing evidence for insights, and making them available for knowledge exchange.

Munich, June 28, 2023 – On Thursday, June 22, 2023, IBM opened the IBM Auto Lab in a joint networking session: a physical collaboration space where IBM will regularly discuss and research the latest trends in the automotive industry and its cross-sectional areas. Hand in hand with the automotive industry itself, the Auto Lab has been able to attract over 120 customers, partners, and experts to present and discuss key points for the future in small groups.

In her opening speech, Christine Rupp, Managing Partner, IBM Consulting DACH, welcomed the participants and encouraged them to collectively look towards the future. In recent years, European car companies have struggled to foster exchange and partnerships that result in digital innovation. Today, we must recognize that a joint step into the future needs a new approach. The IBM Auto Lab is a space for this shared future.

The physical Auto Lab was supplemented by “Code to Road,” an initiative introduced by Peter Schel, Senior Partner, Automotive Industry & BMW Group, IBM Consulting. It is a promise to support the industry in getting back on the road. “Code” not only stands for collaborative work on software development, but also for the code that places mutual openness, agility, and security and responsibility at the center. From this grows the personal vision to deepen collaboration with customers and partners to jointly master the challenges of the automotive industry. That the automotive industry is subject to steady, yet rapid change, was also evident in the presentations by industry experts in the breakout sessions.

Technologies that put the human at the center

The presentation by Inge Scheibel and Jens Anderberg from IBM iX in Düsseldorf focused on personalization, explaining how it can be taken to the next level and what lessons the automotive industry can draw from it. The speakers drew parallels between the automotive industry and food wholesaling: Both industries are characterized by changing customer preferences, B2B relationships, globalization, and undiscovered data potential. As a direct example, they named the METRO company, which has developed a strategy focusing on digitalization, pleasant customer interaction, and efficiency. Subsequently, Scheibel and Anderberg gave insight into METRO’s approach to defining use cases based on the customer lifecycle and implementing a customer data platform to control and activate data.

In another breakout session, Konstantin Herler, Area Vice President Salesforce, and Ilker Uzkan, Banking Lead IBM iX, discussed the transition from a 360-degree approach to a 720-degree approach in customer experience managementin the light of the increasingly complex and competitive environment and the challenge of effectively managing the customer experience. To achieve this, integrating all data sources using data management and artificial intelligence is crucial to obtaining a holistic view of the customer. One interesting approach is the creation of a digital twin of the customer’s perspective, stored as an NFT. The two experts also demonstrated the seamless integration of customer data from the metaverse to the car dealer while implementing personalized connections and predictive models to ensure customer satisfaction. A new customer experience through technology.

Reinvention as a path to the future

Christian Kick, Associate Partner – Automotive Strategy, discussed the CPO market, the certified pre-owner market, in his presentation. Although the CPO market is one of the current hot topics in the automotive industry, in the past customersoften felt cheated by used car dealers and were unsure whether they had received the best offer. Today, the market has become professional, and at the same time, the new car market has become more complicated for customers due to scarce production and long waiting times. Many customers also see the CPO market as an entry point into a car brand. The customer journey is like buying a new car. Customers search for offers online and offline. Local trade is the second most important channel as many interested parties want to physically see the car. Manufacturer CPO programs are therefore an important offer where the customer journey, including test drives, vehicle configuration, and handover, should be more strongly considered. Possibly, they should carry out the technical or physical preparation in-house again and focus on personalization and accessories to meet customer demands.

Market potentials through technologies

In a presentation on cloud-to-edge rollout solutions in software-defined vehicles, speakers Stefanie Eibl from IBM iX and Gregor Resing from IBM Consulting discussed current developments. These include the introduction of new features at Tesla, and their reaction to new trends. They emphasized the rising customer expectations and the necessity of localizing digital services and features. The presentation introduced “Container on Wheels,” an open-source approach to developing code based on container and cloud technologies. This approach allows for fast, robust, and secure development and updates of non-critical features, as shown in a demonstration playing music in the vehicle in real-time via Apple Music. Key components of this approach are container technologies, cloud-native development, and open-source software, which can be used on the OpenHorizon platform to assign specific containers to certain tasks or vehicles.

Generative AI and the power of IBM watsonx were the focus of presentations by Dilek Sezgün, Principal Technical Sales Leader for Data & AI, and Markus Brandes, Senior Partner, Digital Product Engineering Services. Artificial intelligence, according to the speakers, will change every role in automotive companies, from software engineers to marketing experts. They presented a study by McKinsey that identified the four most important areas of value creation through generative AI to boost productivity. These areas are personal productivity, software engineering, business processes, and product services. They hold great potential for efficiency and productivity increases, for example, by using AI tools like Microsoft’s “Copilot” to improve everyday tasks and routines. With watsonx, Sezgün and Brandes demonstrated how you can train your own models and use them as superpowers for employees. It offers the ability to merge data from various sources (watsonx.data), use trained models for machine learning and generative AI (watsonx.ai), and bring transparency into workflows (watsonx.governance). These three elements can be used either together or separately, depending on the company’s needs and allow scaling across the entire company. Watsonx also provides trust as an integral component.

Looking ahead: openness for joint design

With over 120 customers, partners, and experts and exciting keynotes from smart, Porsche, and ABB, the opening of the IBM Auto Lab at the IBM Watson Center Munich has sent a strong signal to the industry. We sincerely thank our partners for agreeing to share their knowledge.

The focus of the initiative is on promoting digital innovation by combining experience and expertise to enhance collaboration and partnerships in the European automotive industry. Personalization, customer experience, the use of open ecosystems, open-source software and container technologies, etc. are just a few of the many courses we can already set for the future of the automotive industry today. The Auto Lab and “Code to Road” continue to provide this opportunity: To shape the future together. As the African proverb says, “If you want to go fast, go alone. If you want to go far, go with others.”

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Auto Lab Launch: Rethinking the automobile industry

Author: Jens Sulek, Executive Partner & Co-Lead IBM iX DACH

Technologies that put the human at the center

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Market potentials through technologies

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