4 Ways to Harness the Power of Digital Transformation in the Aftermarket Industry
Reality Check The automotive aftermarket is undergoing dramatic changes in evolving customer expectations, acceleration of technological innovation, and shifts in competitive power. These changes are revamping the way business in the automotive aftermarket is conducted and value is created. Interestingly, Auto aftermarket sales becoming an omnichannel experience.Today’s consumer visits and researches a variety of channels — including websites, catalogs, social media, advertisements, and stores — before making a purchase. Furthermore, online channels are also giving customers quick access to the information on the prices of parts while online forums are giving customers a peer perspective on the quality/value of workshops. Before moving further, let’s quickly define “Aftermarket” The aftermarket, which is a broad term, can be at times, an afterthought in the automotive world and many consumers may not even be aware what the term means. However, it represents an enormous industry that offers significant value in improving the driving experience. Aftermarket parts are replacement parts that are made by a company other than your vehicle’s original manufacturer. The need of the hour is modernization of legacy systems in the aftermarket industry With legacy and disjointed systems, aftermarket processes suffer from high latency and lagged response. This may be because of restrictive technologies and interfaces or high cost of wrap up solutions. For example, waiting time for a service ticket is so high that it may dissuade the customer from reaching out to OEM or their dealers. Moreover, legacy systems do not enable the customer to do self-service. Additionally, without digital technologies, the customer interaction with a dealer or an OEM is constrained by time and geographic reach. This is where the digital transformation plays a vital role!!! It leads to a better understanding of the customer, helps in personalizing responses, streamlines operations, enhances customer experience and improves revenue by serving manifested and latent demands. Digital technologies allow companies to derive total life cycle value of their incumbent customer base. So how digital transformation is changing the Aftermarket landscape 1. Social Media UPS Online shoppers survey shows online buyers are diligent about research, extensively use online reviews, ratings and social media. Interestingly, 70% of business buyers purchase from an online catalog rather than through another channel. By using social media and analytical tools customer touch points can be identified as social media has made customers more comfortable with connecting and engaging with one another and sharing their concerns and thoughts. Also, with the help of social media, aftermarket suppliers can eliminate the unwanted waiting and reneging. 2. Mobility and connected devices High smartphone adoption, millions of connected devices using IoT and other technologies and ubiquitous connectivity are creating new opportunities at multiple levels for OEM’s. These technologies are reorganizing and redefining internal and external structure and the process of companies. Mobile is critical in the shopping journey and mobile phones account for 34 percent of retail e-commerce sales transactions. That percentage is expected to increase to 48 percent by 2020. Needless to say, to stand out from competitors, a business needs to provide a smooth, frictionless experience and customer engagement by providing quick product searches, delivery and in-store pickup options, and mobile-friendly access to online sites. 3. Cloud Cloud and IoT enabled infrastructure enables a highly cost-effective, rapidly responsive and elastic IT, better aligned with the business needs. Cloud enables aftermarket business to innovate faster while leveraging existing systems and capabilities. Cloud-based tools provide visibility to aftermarket suppliers for every party in the supply chain to look at same data and analytics so that defects can be detected and corrected early in the chain. 4. Data & Analytics Digital technologies connect ecosystem-wide processes so that assets are efficiently managed using predictive analysis of potential errors and initiate. Aftermarket digital transformation pushes business strategies to evolve from selling a product or service to a customer experience-centric value proposition. By using data and advanced analytics, aftermarket suppliers can accurately forecast demand, deepen customer engagement and can also drive loyalty and sales. The Bottom Line: Digital Disruption is forcing companies to recognize the aftermarket’s enormous potential and understand the entire lifespan of a sold product, including supplies, repairs, selling and servicing spare parts, installing upgrades, handling inspections and add-ons, training, and customization. To stay competitive, it is imperative for aftermarket suppliers to change their mindset, create a vision, invest in digital content and analytics, lean on data to stay in touch with customers permanently, provide service through the traditional and digital channel and deliver exceptional aftermarket capabilities coupled with self-service.
Why Cloud Paradox in the Digital Age?
Don’t let fear keep you from harnessing the power of the cloud When cloud computing was initially introduced, many organizations didn’t understand the capabilities of this technology and were extremely apprehensive about placing their data on an external server mainly due to security reasons. As technology has improved and as the business world has become increasingly dependent on remote teams and off-site workers, accessing critical company data from the cloud has become crucial. Organizations are still unsure about moving to the cloud. Are you concerned about having your data in the cloud? If yes, then discover the truth about cloud computing! According to the study by Cisco, more than 83% of all data would be based in the cloud within the next three years. While a study by Gartner reveals that by 2019, more than 30 percent of the 100 largest vendors’ new software investments will have shifted from cloud-first to cloud-only. Gartner also predicts more cloud growth in the infrastructure compute service space as adoption becomes increasingly mainstream. Furthermore, a recent IDC survey on cloud market predictions indicates that 50% of IT spending and 60% of IT spend will be on cloud-based infrastructure by 2020. Additionally, rising demand from the migration of infra to the cloud as well as from compute-intensive workloads such as Artificial Intelligence, Analytics, and the Internet of Things— both in the enterprise and startup arena — are further driving this growth. Sadly, in a world where security breaches at large organizations dominate the headlines, the ambiguity that encloses cloud computing can make securing the enterprise seem daunting and a few organizations are still apprehensive and not able to maximize the full value that the cloud offers. And some businesses still remain apprehensive. Common Concerns In no particular order, businesses hesitant to adopt cloud computing are often concerned with: Security. By far the biggest concern. Are you afraid that your data will not be as safe in the cloud, as it is in on-premise systems? Control. Do you feel that you will lose control of your data if you move it to the cloud and it’s more assuring to know that you have it nearby? Compatibility. Do you fear critical applications will not be compatible with cloud computing solutions? A Passing Fad. Apparently, Do you strongly feel that the cloud is just another passing phase? Put your doubts about the Cloud to rest Cloud is undoubtedly a way for your organizations to cut down your operational cost and streamline your business process. However, before jumping on a bandwagon, it is better if you look at some of the key benefits of transitioning to the cloud: Cloud is secure: Surprisingly, according to Gartner, through 2020, public cloud infrastructure as a service (IaaS) workloads will suffer at least 60% fewer security incidents than those in traditional data centers. While 60% of organizations that implement relevant cloud visibility and control tools will experience only one-third fewer security failures by 2018. Needless to say that the cloud is more secure than traditional approaches. Reduced cost– A study commissioned by Cisco shows that on average, the most “cloud advanced” organizations see an annual benefit per cloud-based application of $3 million in additional revenues and $1 million in cost savings. These revenues boosts have been largely the result of sales of new products and services, acquiring new customers faster or due to accelerated ability to sell into new markets. Decreased headcount: With significantly fewer servers to look after, and with standardized platforms, you will subsequently find you require fewer IT staff. In fact, many organizations figure out that they can reduce their staff maintenance by 50 percent. Quicker deployments: Cloud may or may not have a drastic impact on application performance, but in just about every case, you’ll be able to get them up and running much sooner. Creating—and eliminating— environments for new applications is a much faster process, allowing your development team to use their time most efficiently. Improved Agility. Cloud computing drastically increases application delivery as there’s no associated waiting time to access or allocate the infrastructure. Subsequently, by embracing continuous delivery and cloud DevOps, your business can significantly improve its agility. 20%+ faster time to market for new services 50% fewer application failures and faster recovery time (in 10 minutes or less) 30% more frequent new code deployments and a 38% improvement in overall code quality High Availability: The complete cloud computing facilities are routinely protected from system failures and outages using redundant network switches, servers, and storage facilities. In particular, by leveraging off-site backup and redundant servers and storage facilities make these well-equipped cloud computing facilities less vulnerable to disaster or malicious attack. Fewer servers: Moving infra, application, and platforms to a cloud model can undoubtedly help you with enormous savings, as you can stand down or redeploy servers that were previously hosted applications now moved to a shared model. Final Thoughts It’s time to try the cloud! Legacy systems often prevent responsiveness and derogate service levels and a lack of speed or agility often results in inconsistent and disconnected experiences for users, partners, and employees. Moreover, aging systems should not prevent you from harnessing digital technologies. However, the big question that often worries every business is what should and what shouldn’t be moved to the cloud. The answer has proven to be remarkably simple. Everything is potentially cloud-able – bizarrely, even mission-critical survival solutions like disaster recovery. The need of the hour is to focus on delivering solutions faster to meet customer demand in today’s hyper-competitive market and make a big difference. Stay tuned for Part 2 blog post on Application Modernization and Cloud Connection of our Cloud Computing blog series!!!