As vehicles evolve and incorporate new technologies, their capabilities are set to undergo a dramatic change. By 2030, it is expected that all new cars will be connected, enabling a range of services with large quantities of newly available data. Brand new streams of revenues will open for automotive companies, with analyst McKinsey & Co. predicting that up to 30 per cent of new revenue in the industry in 2030 will be generated by data-driven services.
However, with these greater capabilities also come greater expectations, as customers begin to demand more from their vehicles and the companies that manufacture them.
“Consumers are being educated about what to expect in digital experiences in other retail sectors, and they’re demanding the same thing from automotive,” says John Reed, director of automotive customer experience solutions at Microsoft. “And so some of the themes we hear from our customers are around driving an omnichannel experience, improving their synergies between investments, providing personalised content at a good velocity and reducing their costs, as well as figuring out how to construct services that can be offered directly to the consumer.”
One example of the types of services that could soon be transforming the customer experience is preventative servicing. With a connected vehicle, a dealer or manufacturer would be able to track the condition of the car and its parts by telemetry. If one of those parts were to deteriorate to a poor condition, this could then be noted and a personalised offer for a service presented to the customer through a mobile device. Then, while their own car is being repaired, the customer could use a car share service to explore other vehicles within the same brand, complementing their private ownership.
However, there are a number of unique challenges that the automotive industry faces when it comes to achieving this digital transformation. While the explosion of data that has accompanied the development of connected vehicles offers opportunities, automotive organisations are struggling to manage the dramatically increasing volumes of information available to them. Data is often fragmented across disconnected systems and organisations, and data from one source may be formatted differently to that from another. Bringing together this disparate data to provide customer insights therefore requires a significant standardisation effort, often slowed down by legacy systems.
A tool which can help automotive companies manage this complex process is the Microsoft Common Data Model (CDM). The CDM simplifies data management and app development by unifying data into a known form and applying structural and semantic consistency across multiple apps and deployments such as Microsoft Power Apps, Dynamics 365 and Azure. By making use of standard entities and schema, the Common Data Model allows applications to draw from and make use of the same set of data, reducing the fragmentation that currently occurs.
“We’ve been evolving the CDM underneath our largest products and solutions, such as Dynamics, Office and LinkedIn,” says Reed. “We also provide partners with the ability to extend the CDM. Some very big organisations have been involved, but we’ve also been able to extend this to customers and smaller partners as well. Also, we’ve created extensions for specific industries, such as automotive.”
While the eventual aim is to provide a fully integrated experience, almost no organisation is able to build an end-to-end solution immediately. And often, the roadmap for the realisation of solutions can differ from organisation to organisation. Therefore, flexibility is required in the implementation of new customer experiences, something that Microsoft believes it can facilitate through the Microsoft CDM, Power Platform, and Dynamics 365.
“When we look at these transformation projects, a lot of that work ends up being supported by Microsoft Azure, CDM, Power Platform and our Dynamics 365 platform,” says Reed. “What we find particularly powerful about this is that unlike customer relationship management and enterprise resource planning applications of ten or twenty years ago, these solutions and their components can be deployed independently. And so, when we think about an organisation constructing a roadmap that might begin with centralising data, then building services such as case management for a contact centre, we can use the components of Azure, CDM, Power Platform and Dynamics to support that. Then we unify the data underneath, and, as they begin to look at other things, they can be plugged in without having to bring in a bunch of technology.”
One Dynamics 365 application with particular significance to developing new customer experiences is Customer Insights, Microsoft’s customer data platform. Currently, companies employ lots of data scientists to analyse their data for them to understand their customers. Customer Insights simplifies this process by unifying data from a diverse range of sources – transactional, behavioural observational – and providing artificial intelligence-driven insights, such as the next recommended action. This enables the delivery of tailored experiences to customers in a more focused and efficient way.
The broad approach of the CDM, which can be applied across a range of different industries, has been further specialised for the automotive sector through the development of the Automotive Accelerator, a foundational component within the Microsoft Power Platform and Dynamics 365.
“The way we currently envision the accelerator is as a layer cake with three layers,” says Smith Codio, principal program manager for industry at Microsoft. “We have the data model, we have the integration layer where we build either a connector or we require the right partners to build a connector and publish it into our marketplace so that partners and developers can get access to them. Then we build a set of simple applications that map business processes specific to that industry.”
The accelerator can also help adapt first-party Microsoft applications to the specific needs of the automotive industry.
“If you were to buy Dynamics 365 for Sales, there’s a lot of cool stuff you can do out of the box,” says Codio. “But it’s even better with automotive-specific extensions. Once you deploy the Automotive Accelerator, you get an environment that speaks your language. We’ve taken a horizontal set of capabilities and extended and customised them to make them really industry specific.”
One of the key collaborators in the development of the Automotive Accelerator is Annata, an Icelandic organisation which provides solutions built on Microsoft business application platforms for the automotive and heavy equipment industries.
“With rapid changes in how vehicles are retailed, serviced and used, the importance of being able to engage with customers through the right channels at the right time across multiple tiers in the value chain has never been greater,” says Magnus Gudjonsson, Annata 365 Evangelist. “A common, industry-specific data language that can span across applications is a great foundation and that‘s where the Automotive Accelerator comes into play.
“Annata‘s suite of industry add-on solutions to Microsoft Dynamics 365 are built on and extended by the Microsoft Automotive Accelerator,” Gudjonsson continues. “Automotive companies are already optimising existing processes and embracing new opportunities using Annata 365 Finance & Operations, Annata 365 for Sales and Annata 365 for Field Service. By integrating data from connected vehicles through the internet of things and getting actionable insights using Azure Machine Learning, our customers are taking it to the next level, and we’re excited to be on the journey with them.”
Microsoft and its partners are planning to iterate upon the Automotive Accelerator, adding to the capabilities that are already on offer. Version two, set to arrive in April 2020, will particularly focus upon Customer 360. The solution leverages assets in the Microsoft Power Platform and Dynamics 365 that can aggregate customer data into a single profile, which can then be used to provide predictive insights into simulated customers.
“In the current process in a test drive, for example, it’s all done on paper,” says Codio. “The salesperson has no idea who the customer really is – if they are a VIP customer, their purchase history, their lifetime value. There are so many things they don’t know. Using Customer Insights, we will be able to provide all of that on Power BI dashboard.”
With the capabilities provided by tools such as the Automotive Accelerator, Microsoft is looking to provide a flexible foundation for future innovations in the automotive customer experience. Reed predicts that these experiences will continue to change, as mobility services move away from private ownership.
“Business is transforming, as we’re beginning to introduce different modalities for transport that will shift some usage from traditional private ownership models to other mobility services,” he says. “Probably the most telling datapoint is that as many as a third of miles driven in 2030 will come from shared services rather than from privately owned vehicles. All these factors together will cause a transformation not only in the vehicle itself and connected services, but also in what it means to be a customer of a car manufacturer or dealer in the future.”
This article was originally published in the Spring 2020 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.