For manufacturers across all sectors, the business environment continues to get tougher, given global economic and trade headwinds and a scarcity of digitally-savvy talent. In automotive, manufacturers and suppliers are also challenged by shifting demands of millennials, a push for connected and electric vehicles, vehicle ownership substitutes, and the promise of autonomous vehicles. This is creating greater risk and urgency to run both traditional operations alongside emerging business models while exposing the limits of the legacy systems and fractured processes still in place at most organizations.
Additionally, manufacturers – especially in automotive – still lag in digitizing operations and customer experiences. At the 2019 Pega Customer Engagement Summit Detroit we heard from a range of automotive manufacturers, Pega partners, and industry experts about not just the urgency for digital transformation but also the best approach to lead and succeed with enterprise-wide transformation efforts in this unique sector. Here’s what we learned:
To achieve your goals, first have a clearly defined vision
John W. Mendel shared his experience driving and leading change as the former EVP, Automobile Division, of American Honda Motor Company and as the current owner of a craft distillery. He emphasized that transformation can be an opportunity to do something great and be successful, but enterprise leaders need to get the fundamental process pieces right. For example, digitization won’t fix a bad process, only speed it up. That’s why it’s critical for business and process owners at all organizational levels (what he refers to as “Sheepdog Leaders”) to take the lead role in rethinking and retooling the products and services they provide and be the ones driving their digital transformation. Have a clearly defined vision of what the business’s mission, goals, and outcomes are, then determine how digital tools can help consistently communicate these to passionately engage customers, prospects, and dealer partners. And understand when, where, and how these outcomes are delivered – this is where the heart of your organization lives. Once you understand these components you can structure your business to empower and deliver the types of outcomes you want for your customers and do it better and faster than your competition.
Use empathy to align stakeholders and manage complex projects
Robert Skinner, VP of Digital Strategy and Marketing Technologies at FordDirect, discussed the type of challenges inherent in connecting multiple stakeholders and standardizing operations in a complex, regional, and highly brand-centric sales ecosystem – an area in which he has substantial experience. Initially founded to support online sales, FordDirect is co-owned by the Ford Motor Company and dealer groups representing the approximately 3,800 Ford and Lincoln dealers in the U.S. Its goal is to provide lead generation for those dealers through personalized marketing campaigns across multiple channels.
Operationalizing that type of individualized marketing is no small task. To execute a mix of standardized, mission-critical operations and individually personalized brand support, Robert emphasized the importance of aligning stakeholders so everyone has the same vision and is working on the same timeline. This takes strong leadership – people who understand the pressures and priorities of each stakeholder group. It also takes an empathetic viewpoint toward dissenters to understand concerns, address them, and get buy-in on a project. Ultimately, digital transformation is an ongoing process. Digital transformation programs are built around incremental wins, and successful ones are really about understanding the organization’s people and culture and having the ability to break down silos.
Leverage technology, but don’t disconnect from your customer
Automotive expert Lauren Fix, a.k.a. The Car Coach®, provided insight on mastering the customer engagement moments that matter. First and foremost, she reminded the audience that we all operate in a highly connected world. Consumers are digitally savvy and expect the same type of easy, intuitive experience that they have on their smartphones. If they don’t get it, businesses risk their brand being damaged by something as simple as one bad post on social media. Technology is always evolving, making it both challenging and essential to understand the best way to use new tech to make human connections and deliver great experiences.
To deliver great customer experiences, organizations need to remember that people are on the other end of the digital interface. The long tenures of many automotive employees and executives can insulate them from the real world of “civilians” buying and owning vehicles. These business leaders should play the role of end user to evaluate an experience from their customer’s perspective. Find out what isn’t working and change it to provide an experience that makes the consumer say, “Wow!”
Transform aftersales by connecting data and processes
In a panel discussion with experts from companies such as Ford, Navistar, Nissan, and Toyota, participants shed light on a number of the challenges facing executives tasked with enhancing vehicle ownership experiences and modernizing the aftersales ecosystem, which is filled with antiquated warranty, recall, customer, and field service solutions and processes. The most common pain points include: replacing end-of-life legacy technology across differing lines of business; getting stakeholders and processes in a globalized ecosystem on the same page; collecting and connecting data faster; and providing both dealer technicians and customers with an easy way to do business.
These are not small tasks for the industry, and the costs to improvement are only one part of the equation. As Joe Werth, VP for New Product Development at Navistar explains, one of their largest challenges has been coordinating buy-in from all of the functional areas that could benefit from digital transformation. Mike Roberts, former Ford executive and current industry consultant, highlighted globalization as a huge issue. Getting all of their leaders around the globe to agree on processes was a lengthy project, affecting very different part numbering systems and service labor time standard systems. “To validate a claim, we had to integrate to 78 different systems.” For Kristyn Lau, former Senior Manager of Warranty at Nissan, “What we’ve learned is you’ve got to take a step back … and really look at what’s the problem or the issue that you’re trying to solve … You really need to have all that planning put in place up front.”
Carolyn Rostetter, Pega’s Senior Director and Industry Principal for Manufacturing, and panel moderator, emphasized that there is more to successful digital transformation projects that just the technology. There is also a need for leaders with vision and a strategy to understand the people and the culture of an organization.
The lessons of Customer Engagement Summit Detroit: Start with outcomes, take a collaborative approach, and remember that digital transformation is an iterative process
Each presentation illustrated how organizations across automotive and manufacturing as a whole are rethinking and retooling the products, services, and experiences that they provide. In an environment of uncompromising consumer expectations and rapidly evolving digital technologies, businesses need systems that are:
- Flexible enough to integrate multiple sources of data
- Intelligent enough to leverage analytics
- Powerful enough to orchestrate and automate multiple operational processes and journeys
- Fluid enough to allow for modifications and changes to meet customer feedback and new industry needs
As Pega’s Founder and CEO Alan Trefler explains, organizations need technology that empowers them to take control of their business.
In the end, the lessons of Customer Engagement Summit Detroit were not just automotive- or manufacturing-specific, they were universal. Speakers emphasized the importance of digitizing or digitalizing businesses the right way for the right reasons. Don’t race to automate a bad process. Instead, understand the problem that needs to be solved. Identify all of the processes that are needed to solve that problem from end-to-end. Bring IT, business, and partner stakeholders together to collaborate on the solution. And implement in an iterative and agile fashion, creating a string of small wins that can be scaled over time.
- Watch replays from Pega’s Customer Engagement Summit Detroit and get expert insight on DX project success.
- Discover how Pega for Manufacturing & High-Tech™ helps the world’s most recognizable organizations streamline operations and deliver outstanding customer experiences.
- See how Pega’s consulting partners can help guide your next project to success.
- Watch our LinkedIn Live discussion with Lauren Fix and Kristyn Lau on digital transformation and the shift that’s necessary to drive change at your organization.
- Join us at PegaWorld iNspire for more networking and lessons learned with global industry leaders.