Ibm Smarter Mobility Presentation Jens Diehlmann


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Auto Retail Future is discussed via IBM Smarter Mobility execs and moderated by Automotive News publisher Peter Brown...

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Ibm Smarter Mobility Presentation Jens Diehlmann

  1. 1. WelcomeThe webinar will begin momentarily
  2. 2. Peter BrownPublisherAutomotive News
  3. 3. Jens DiehlmannPartner – IBM Global Business ServicesIBM
  4. 4. Daniel DelosPartner – Strategy & TransformationIBM
  5. 5. IBM Global Business ServicesCaptive Finance:The core enabler of the next automotive growth modelJens Diehlmann & Daniel Delos Let‘s build a smarter planetMay 24th, 2011 © 2011 IBM Corporation
  6. 6. IBM Global Business ServicesWho is Jens Diehlmann? Jens Diehlmann is a Partner at IBM Global Business Services in Germany leading the Captive Automotive Banking Team. In addition, he is a leading Subject Matter Expert and is globally responsible for the IBM‘s Consulting Business across all captive finance companies. Mr. Diehlmann has over 15 years of experience in Banking & Financial Services and has worked for over 10 years as a Strategy Consultant for captive finance companies. During his career, he advised clients on Business and Operations Strategy, Leasing & Finance and Bank set-up. Mr. Diehlmann is a co-author of the book “Automotive Management – Navigating the next decade of auto industry transformation“ which was released in June 2010. © 2011 IBM Corporation
  7. 7. IBM Global Business ServicesWho is Dan Delos? Daniel Delos is an IBM Strategy & Transformation Partner with IBM Global Business Services leading the Innovation & Growth services area within the Industrial sector, managing the IBM relationship with multiple Automotive clients and heading the Americas Captive Finance competency. Mr. Delos is responsible for thought leadership, offering development and staff productivity across the Business Strategy, Technical Strategy and Market & Customer Management Strategy domains. This practice area leverages IBM assets, services and Smarter Planet offerings to help companies transform in the areas of M&A, Shared Services, Market Entry Strategies, Sales Transformation, Service Transformation, Captive Finance, Marketing Analytics and Smarter Commerce. © 2011 IBM Corporation
  8. 8. IBM Global Business ServicesAgenda 1 Key Market Trends and Issues Challenging Captive Finance Executives 2 Key Findings of IBM‗s 2010 Global Advance Mobility Study 3 Navigating through the Complexity of Advanced Mobility © 2011 IBM Corporation
  9. 9. IBM Global Business ServicesCaptive finance organizations are manufacturer-affiliated financial servicesproviders offering original and derivative financial solutions Profile of captive finance companies  Tasks: Acting as OEM‘s sustainable growth Captive finance companies Non-captive finance companies driver and sales support to: - stabilize corporate results - promote vehicle sales - increase customer loyalty  Product/service portfolio is directly or indirectly related to vehicles: - leasing and loan for passenger cars and commercial vehicles - wholesale finance  Unique role and strength: Serving as OEM‘s point of sale integratorSource: Automotive Management – Navigating the next decade of auto industry transformation, December 2010 © 2011 IBM Corporation
  10. 10. IBM Global Business ServicesIn mature markets, captive finance companies are increasinglyadvancing towards the automotive banking approach Diverse approaches for captive finance companies to pursue businessSource: Diehlmann / Häcker: Automotive Management – Navigating the next decade of auto industry transformation, December 2010 © 2011 IBM Corporation
  11. 11. IBM Global Business ServicesStatus quo for automotive finance  After the economic downturn in 2008 and 2009, the entire car industry has bounced back at full speed.  Booming car sales in China have positively influenced the results of global manufacturers.  The entire industry has had a peak year with 61.7 million car sales in 2010 which is about to continue to 20111).  Leasing and Financing is growing in emerging markets where a growing middle class is gaining more prosperity and thus, demanding more services.  Captive Finance organizations follow their manufacturer in growth markets to establish own operations.  More and more focus is placed on innovative mobility concepts as stricter CO2 emission regulations force manufacturers to develop new business models and consumers to rethink their mobility demand.  Electric vehicles are gaining ground and most OEMs have models on the market or to be launched soon. However, it will still take some time until this trend will take off.  The entire automotive industry and its financing business has survived the economic crisis well and has established itself again as one of the strongest and profitable industries at all.1) German Association of the Automotive Industry (VAD), January 2011 © 2011 IBM Corporation
  12. 12. IBM Global Business ServicesAfter the economic downturn,new challenges are awaiting captive finance companies Stagnating car sales in mature markets Residual value management and Booming increasing used car car sales in growth inventory and emerging markets Rising Sophisticated operating costs consumers are due to decentralized increasingly and outdated IT demanding new infrastructure mobility and Blind spots in meeting today‘s ownership models consumers ever- evolving needs © 2011 IBM Corporation
  13. 13. IBM Global Business ServicesBattlegrounds in the passenger car market is further shifting away fromTriad markets Sales and production of passenger cars by region, 2000 – 20251) (m units) Sales Production 57 69 114 57 69 114 (CAGR %) (CAGR %) 5 8 11 11 Other (2.8) 9 Other (2.8) 14 6 3 11 6 15 China (6.7) 3 11 14 China (6.8) 21 22 31 BRI 2) (12.4) 32 BRI 2) (12.8) 86 80 59 53 44 Triad 3) (0.4) 44 Triad 3) (0.2) 2000 2010 2025 2000 2010 2025 1) 2025 Figures are estimations Source: Roland Berger 2) BRI countries include Brazil, Russia, India, China 3) Triad markets are North America, Western Europe and Japan © 2011 IBM Corporation
  14. 14. IBM Global Business ServicesIBM is the only global consulting companywith a team dedicated and spezialized in captive finance IBM‟s global  The IBM Automotive Banking team has automotive banking and mobility engagements discussed and worked globally with CEOs to identify and develop new mobility business models  IBM has developed an in-depth understanding in supporting clients along the automotive value chain in mature and growth markets  IBM acts as strategic relationship partner and incubator for materializing new mobility concepts in the context of its Smarter Planet Campaign Cooperations with diverse stakeholders of the globally extended automotive ecosystem allows IBM‗s Automotive Banking Team to make valuable contributions to advance sustainable road mobility. © 2011 IBM Corporation
  15. 15. IBM Global Business ServicesThe IBM Automotive Banking services portfolio is well-equippedto support captive finance executives in paving the future avenue to growth Captive Finance Strategy  New business opportunities Operating Model &  Business model innovation Market Entry Process Optimization  Business transformation outsourcing  Target operating model  Strategy development & implementation Process optimization & harmonization  Feasibility study Shared service centers  Reference process maps for business operations and system evaluation Information Technology Automotive Banking New Intelligence Target IT architecture Automotive Document management  Residual value & used car management Banking Auto finance software vendor selection New Mobility Services  Captive finance performance analysis Application management  Data management & business analytics  New mobility concepts  Smarter transportation  Financing options for alternative vehicles © 2011 IBM Corporation
  16. 16. IBM Global Business Services We have entered the age of the empowered customer Customers now have Social networking and Customer This is changing unlimited access to mobile commerce expectations of the entire way information and can have dramatically service, price and products are sourced, instantly share it with changed the dynamic delivery is soaring. manufactured and the world between buyer and distributed—and seller. making business more complex than ever. 155 million 75% $93 billion Number of tweets sent Percentage of people who Amount in sales missed due via Twitter each day believe companies don’t tell to out of stock inventory the truth in advertisements © 2011 IBM Corporation
  17. 17. IBM Global Business ServicesPower has shifted to the customer — compressing margins andchanging paradigms In this new era, businesses need to: Understand and Adapt sourcing and Market, sell and Service anticipate procurement based customers fulfill the right customer on customer flawlessly, product and service predict and behavior and demand and at the right price, drive customer needs based on optimize supplier time and place loyalty customer interactions across insights across extended value all channels chains © 2011 IBM Corporation
  18. 18. IBM Global Business ServicesSmarter Commerce focuses on three dimensions centered aroundthe customer Customer Value Strategy Customer Insight In turn, you must re-think how your customers define In today‘s world of instant value, and the changes you business, you need deep must make to your value insights, in real-time that you chain so you can deliver can turn into immediate action exactly what your customers want - profitablyCustomer & Partner Engagement Customer You need an approach that allows you to more effectively connect, collaborate, conduct …increasing the value companies generate commerce and create a for their customers and partners in a differentiated customer rapidly changing digital world experience © 2011 IBM Corporation
  19. 19. IBM Global Business ServicesBusinesses are rapidly adopting Social Media to ―be in touch‖ withtheir customers, but customers often engage for different reasons Percentage of Companies with a Profile or Key reasons cited for engaging in social Presence on a Type of Social Site media relationship with a business Company  Avoid being perceived as ―out of touch‖  Attract top employees  Missed sales opportunity  Competition being more successful in reaching customers Vs. Customer  Promotions, coupons, savings or some other form of benefit  Positive brand association  Lifestyle choice and simplicitySource: From Social Media to Social CRM, IBM Institute for Business Value Analysis, 2011. n=339 IBM Confidential © 2011 IBM Corporation
  20. 20. IBM Global Business ServicesIBM has developed a Smarter Commerce Multi-Channel Business ValueAssessment to help clients answer the following question…―Are your Marketing and Sales organizations effectively and efficiently delivering the rightproducts, services and experiences to the right customers across preferred channels?‖Customer / Account Segmentation ChannelIdentification of key areas of marketing and sales opportunities through the Assessmentassessment of customer behaviors, products and channel preferences.Marketing Process OptimizationAnalysis of current marketing operational capabilities, including analytics,campaign effectiveness management and channel capabilities. EstablishSales & Channel Process Optimization Realization The VisionEvaluation of the current state of sales execution effectiveness and Roadmapefficiency through cost-to-serve model.Customer Experience AssessmentEvaluation of the cross-channel user experiences using proven cross-industrypractices and innovations. Evaluation of your digital presence including web, Capabilitiesmobile and social leveraging our assessment tool that features an extensive Frameworkdatabase of online capabilities and leading practices. Evaluation © 2011 IBM Corporation
  21. 21. IBM Global Business ServicesBesides our operating business, IBM is aggressively investing infurther developing intellectual property and shaping the development offuture-oriented mobility services New mobility concepts Intellectual property Strategy and education “Electric taxis in „Global CEO Strategy Workshops China‟s mega-cities” for new mobility solutions“ “Advancing Mobility Study 2010” IBM E-Mobility and the impact on “Automotive Management” Captive Finance Companies Navigating the “Project Edison” next decade of European research project for the automotive Thesis set-up of intelligent e-vehicle Industry transformation infrastructure „CEO Study 2010“ “Truck 2020 IBM Study 2009” © 2011 IBM Corporation
  22. 22. IBM Global Business ServicesAgenda 1 Key Market Trends and Issues Challenging Captive Finance Executives 2 Key Findings of IBM„s 2010 Global Advance Mobility Study 3 Navigating through the Complexity of Advanced Mobility © 2011 IBM Corporation
  23. 23. IBM Global Business ServicesTogether with IBM Institute for Business Value (IBV),the Automotive Banking Team launched a global study on future-orientedmobility by looking outside the traditional automotive value chain Interviews by Industry Segment 3% 7% Ind. Groups Government 27% 12% OEMs Others 7% Energy 3% Car Share 5% 17% EV Mfg Captive 10% Finance  123 executive interviews Telematics 10%  18 countries Suppliers  Others (outside of OEM) include: academia, government, service integrators, venture capitalists, mobility consultants and fleet operators Traditional Auto New Mobility Influencers © 2011 IBM Corporation
  24. 24. IBM Global Business ServicesThe most important findings can be summarized as follows: Transforming how people move about is among the most complex Rethinking mobility struggles for cities, businesses and citizens. The economic, social and environmental concerns of mobility are forcing new ideas on providers. Although automotive companies will need to develop mobility solutions, Auto companies make they cannot lose sight of the need to develop technology-packed, vehicles intelligent vehicles at competitive prices. New packages need to be developed for all major customer segments Thinking outside the that establish automakers‘ stake in providing mobility solutions. vehicle Automakers have assets that can be leveraged to protect their interests. Who are partners and who are competitors? More often these will be Partners, competitors the same. The partners needed to assemble innovative solutions will and alliances also be positioning themselves to control customers and their wallet. Mobility solutions require that finance companies become the core Finance becomes the enabler to simplifying the way that consumers want to move. The new core integrating feature across partnerships will be homogenous transactions. © 2011 IBM Corporation
  25. 25. IBM Global Business ServicesAutomakers will have to reinvent their business models to cater to anew market segment of consumers who are not tied to individual vehicles How many consumers would be willing to give up their personal vehicles? provided sufficient subscription mobility services exist More than 50% 14% It is expected that future customers will demanding more flexible mobility solutions Subscription mobility could provide that About 25% 50% flexibility: –Consumer may give up vehicles altogether –They could choose to have less vehicles as Very few 36% they pursue an ownership model based on their everyday needs Not an attractive business model 0% “The most important step is to enable consumers to move from ownership of vehicles to selling a subscription to them as needed” –European Auto OEMSource: Advance Mobility Global Interviews (n=42), IBV Analysis, © 2011 IBM Corporation
  26. 26. IBM Global Business ServicesPeople across age groups are finding it difficult to own a car and choosingto drive less for a number of reasons, with ‗Millennials‘ topping the list In today‘s economy, it In the past year, I have With access to social I want to protect the can be difficult to own consciously reduced networking sites, I environment, so I drive a car because of the how much I drive, and choose to spend time less. high cost of gas, instead took alternative online with friends parking and transportation instead of driving to maintenance meet them 18-34 years old 35% 80% 16% 45% 23% 54% 16% 45% 35-44 years old 71% 40% 46% 39% 45-54 years old 76% 31% 34% 37%55 years or older 68% 24% 18% 42% Strongly Agree Somewhat AgreeSource: Zipcar Millenials Survey (n=1025), 2010 Alternative Transportation defined as carpooling, public transportation or bicycle © 2011 IBM Corporation
  27. 27. IBM Global Business ServicesFor automakers to exploit new business opportunities,they have to think outside the vehicle in order to cater consumerswho are moving away from owning a car to using mobility solutions “Auto companies often view mobility through the lens of just the vehicle, not the consumer" –US Automotive OEM Vehicles Multi-modal Transportation Cashless Packaging  Insurance  Security  Tolls  Connectivity  Parking  Other in-vehicle  Electricity purchases Daily Subscription vehicles vehicles Service Integration  Solutions beyond the vehicle such as location-based services or event services  Optimization and guidance across modes  Integrated cashless process © 2011 IBM Corporation
  28. 28. IBM Global Business Services The alliances to enable mobility solutions must start between the OEMs and their finance companies OEM View Captive Finance View “We’ve spoken to several finance “Financial services do not drive companies, but have neglected to change but have to be ready when consider our own ” Brand Partners require them” – US Automotive OEM – European Captive FinanceMany OEMs are seeking partners to pilot Captive finance companies are waitingnew ideas, but have not approached their to take direction from the OEM andown finance companies don‘t feel in a position to lead “There is no clear decision-making structure in the company that brings us together” – European Captive Finance Executive …Automotive finance companies should be natural partners for enabling mobility solutions © 2011 IBM Corporation
  29. 29. IBM Global Business ServicesThe changing environment will require enhancements in the existingcustomer interaction to leverage the benefitsIn our recent CEO study we asked… To what extent will the new economic environment be different? How will the future mobility consumer change the ownership model? Structurally 61% 16% different Sustained change How can access and simplicity be provided to consumers of new mobility To a large/very large extent solutions despite increasing complexity in To some extent enabling mobility? What kind of financing models are required to meet the challenge of bundling "In the next 10 years we will have mobility solutions into attractive consumer services and enabling its deployment across more change than in the 50 years partners? before" –European Automotive OEM, 2008 How and to which degree will today‘s vehicle IBM Automotive 2020 Study market structure change in face of increasing acceptance of new mobility solutions?Source:2010 Global CEO Study/ Automotive, 2010., Advance Mobility Global Interviews (n=55), IBV Analysis © 2011 IBM Corporation
  30. 30. IBM Global Business ServicesaAdvancing mobility demands new ways of operating and calls forIBM‘s Smarter Planet SolutionsInstrumented Interconnected IntelligentMonitoring and maintaining the Applying sophisticated Transforming raw dataintegrity of the automotive supply devices to connect consumers into critical insight for quicklychain while creating vehicles that and vehicles to a broader and accurately responding tocan measure their own health transportation system that changes and achieve betterand sense their surroundings. encompasses roadways, energy results through prediction sources, governments and more. and optimizationCar sharing Car on demand eMobility Fleet Management Intermodal travel IBM Advanced Mobility Services is an integral part of IBM‟s Smarter Planet Strategy © 2011 IBM Corporation
  31. 31. IBM Global Business ServicesWatson represents out latest groundbreaking innovation inIBM‘s Business Analytics and Optimization solutions Watson is a computing system that rivals a human‘s ability to answer questions posed in natural language, interpreting meaning and context and retrieving, analyzing and understanding vast amounts of information in real-time Watson represents a culmination of IBM‘s century-long dedication to research and innovation. This same investment in research is driving the creation of new Business Analytics and Optimization capabilities, allowing the innovations from Watson to be applied to solve business and societal problems – for example, diagnosing disease, handling online technical support questions, and parsing vast tracts of legal documents - and to drive progress across many industries. © 2011 IBM Corporation
  32. 32. IBM Global Business ServicesAgenda 1 Key Market Trends and Issues Challenging Captive Finance Executives 2 Key Findings of IBM‗s 2010 Global Advance Mobility Study 3 Navigating through the Complexity of Advanced Mobility © 2011 IBM Corporation
  33. 33. IBM Global Business ServicesAs an enabler, IBM is capable of turning the vision of smarter mobilityconcepts into reality by means of business analytics and optimization OEMs & Insurance Service Fleet Utilities Government Stakeholder Suppliers Provider Operator Mobility-as-a Service Car Sharing Car on Pay as you Intermodal Concierge Demand Use travel Services IBM Advanced Mobility Service Hub Usage based Remote Car Sharing Value EV Services Services Insurance Diagnostics System Integration Added Fleet Mgmt Vehicle Modality Location based Infrastructure Services Services Tracking Services services Road Side User Devices Devices Vehicle 3rd Party Data Master Data Data Analytics Management Core Data Collection Integration Services B2B Service Device Security & Management Management Privacy Mgmt EV Charging Backend Stations Systems „Always On― Vehicle Connectivity Connected Vehicle Marketplace P © 2011 IBM Corporation
  34. 34. IBM Global Business ServicesA 360° view of consumers has increasingly become a preconditionin successfully targeting today‘s interconnected consumers Consumers are globally connected Customer data management becomes essential in achieving: 360° customer view OEM„s app © 2011 IBM Corporation
  35. 35. IBM Global Business ServicesToday‘s sophisticated consumers demand new mobility solutionswhich replace or extend the use of their personal vehicle Mobilität Mobility Multi-modal Transport Parking Travel Service Location-based Subscription fleet Services Event Service © 2011 IBM Corporation
  36. 36. IBM Global Business ServicesBlind spots need to be removed for delivering new value and improvedlifestyle experience meeting consumers‘ ever-evolving mobility needs andwants Predict Analyze all forms Recommend the of data to provide most appropriate insight and action to take predict the future Leverage the power of Business Capture Analytics and Act information by Optimization applying business Customers Surveys  Attract ―best‖ customers analytics and Sales Data Transactions  Target customers: optimization to customer Suppliers cross-sell, up-sell, retention Web Logs  New product releases, data management 360 ° product adoption  Grow customer value  Retain profitable customers People & Business & Enterprise Data Sources Store new data on Decision Optimization & customers, sales, etc. Automation for continuous improvement © 2011 IBM Corporation
  37. 37. IBM Global Business ServicesWe have only just begun to uncover what is possibleon a smarter planet The main question remains to be answered: Who will be the first to drive and thrive on the new avenue for growth in a smarter mobility industry © 2011 IBM Corporation
  38. 38. Thank youfor your attention © 2011 IBM Corporation
  39. 39. Q&A
  40. 40. Thank YouThis webinar will be available on-demand in a few days at registrants will receive an e-mail notification when it is available