The document outlines three key success factors for automotive CIOs to develop a future-proof IT organization, focusing on digital strategy and innovation, future IT operating models, and IT cost efficiency. It emphasizes the importance of adapting to automotive megatrends, such as the rise of autonomous vehicles and digitalization, while also addressing challenges posed by the COVID-19 pandemic. The document suggests that CIOs must balance rapid innovation with operational efficiency to support their company's overarching business strategy.

1. August 2020
Automotive IT Strategy
Three Major Success Factors for Automotive CIOs to
Shape a Future-Proof IT Organization

2. Automotive IT Strategy 20202020 Deloitte 2
Faced with the current crisis, automotive CIOs need to focus on 3 central success factors: digital strategy & innovation,
future IT operating models and IT cost efficiency.
Three focus areas for future automotive CIOs
Automotive megatrends &
macro technology forces
IT Cost Efficiency
Reducing costs while investing in
promising technologies
Digital Strategy & Innovation
Deploying the right mix of technologies
Future IT Operating Model
Finding the best way to organize,
operate and behave
Success levers
for the future IT
COVID-19
impacts
Automotive megatrends
• Investment in autonomous driving urgently
needed for transport of people and contactless
delivery of goods
• Digitalization critical for production, supply
chain and delivery networks
Macro technology forces
• Rapid realization of fully digital sales
• Digital twin/supply chain increasingly important
• Cloud services to enable business continuity
COVID-19
• Automotive companies suffer from severe
revenue declines
• They reduce operations and make generating
cash flow their main short-term goal
• Automotive CIOs face infrastructure
breakdowns, license limitations, traffic overload
and cyber attacks
• IT departments have to establish long-term
remote working systems & settings
• Automotive CIOs need to serve as resilient
leaders through the crisis

3. Automotive IT Strategy 20202020 Deloitte 3
Transitioning towards an automotive future that is connected, electric, autonomous, and smart.
Automotive megatrends
Connected world
Most people communicate and interact digitally every day, but many
interfaces are unable to facilitate the smooth transmission of
information, e.g., when users switch between apps or portals looking
for mobility solutions. Seamless transitions that provide a more
convenient user experience are the key to leveraging system
compound effects in the near future. The goal is interoperability
across the physical, digital and rules-based layers of a mobility
system.
Autonomous everything
A significant share of consumers still say they are uncertain to
frightened about autonomous driving technology. At the same
time, developers are finding it extremely challenging to achieve
level 5 autonomy, and the legal landscape remains ambiguous. That
doesn’t mean autonomous vehicles (AVs) don’t offer advantages,
though only in certain scenarios. The autonomous features already
deployed in vehicles combined with smart infrastructure are having a
positive impact on safety, the environment, convenience and
societal buy-in.
Smart sharing/owning
Some studies suggest that traditional car sharing is not a proper
long-term solution from an ecological perspective, as it increases
the total number of vehicles on our streets. That is why we need new
ownership and usage models, e.g., flexible rental models or
solutions addressing the first-mile/last-mile problem via
micromobility. In addition, public transport is likely to become more
compelling and competitive when cities start making it free.
Electricity first
As today’s consumers still favor gas or diesel engines (e.g., by 49% in
Germany in 2020) and engine efficiency keeps improving, we expect
OEMs to continue producing combustion engines for 2 to 3 decades
at least. That said, the triumphant advance of the electric engine
seems unstoppable. Fuel cell and synthetic fuels may rise as relevant
alternatives in the future. However, the focus will likely remain on
electrification, electric drives and battery development for the next
few years.
Source: Deloitte Analysis

4. Automotive IT Strategy 20202020 Deloitte 4
Digital
reality
Cognitive
Blockchain
Business of
technology
RiskAnalytics
Cloud
Digital
experience
Deloitte has identified nine macro technology forces that are closely interlinked with current automotive trends.
Macro technology forces & examples from the automotive industry
Enablers Disruptors Foundation
Companies can use AI, e.g., voice
stress analysis, to make interactions
more human-centric for
everyone from customers to
employees & partners
Example: Passenger attention
assistant, digital showroom & sales
The approach to data management,
data governance, and the supporting
architecture is shifting thanks to
solutions such as cloud, core
modernization, cognitive, etc.
Example: Service purchase
recommendations, autonomous
driving algorithms
Cloud investments expected to
double as a percentage of IT budget
over the next three years1, paving
the way for everything-as-a-service
Example: Cloudification of vehicle/
driving information
Trends like AR/VR, voice interfaces,
speech recognition, etc. promote
more natural user engagement and
enable new commercial applications
Example: Voice/gesture vehicle
control
Sharp increase in demand for
technologies from machine learning
and neural networks to robotic
process automation and bots, raising
ethical concerns in the tech space
Example: Chatbots, automation in
vehicle production
In addition to the financial industry,
healthcare, the public sector and
other industries are also using
blockchain today. Use cases in the
automotive industry are still vague
Example: Future sales,
digital supply chain
From delivering operational
excellence to partnering with
business units to proactively drive
innovation, IT must make business
agility a priority
Example: DevOps, agile product
organization, cost reduction
Besides conventional cyber or
regulatory risks, new disruptive
technologies expose companies to
risks that are hard to assess,
even as trust becomes a more
critical success factor
Example: Vehicle security, CO²
reduction
Pressure in key areas, e.g., real-time
supply chains, global CRM
interaction platforms, etc., is
relentless, but legacy systems often
lack the agility to innovate and scale
Example: Mobility platforms, API
architecture
Core
modernization
Legend: Digital Strategy & Innovation Future IT Operating Model IT Cost-EfficiencySource: Deloitte Analysis

5. Automotive IT Strategy 20202020 Deloitte 5
We have identified three major success factors that can help CIOs make the right decisions and successfully navigate the
challenging transition to a future-proof IT organization.
Summary
• Innovation and a carefully considered cloud
strategy are crucial building blocks for
automotive companies striving to succeed
with their digital agenda.
• IT plays a critical role in both, taking a
proactive approach to tech-enabled
business transformation, while also focusing
on delivering emerging tech to drive top-line
revenue in line with the business strategy.
• Digital target operating models (TOM) call
for a shift in roles, interaction and structures
within the organization model.
• In the distant future, IT will fade into the
“teal” organization, embracing cross-
functionality and centralizing rather than
segregating support activities.
• Automotive IT organizations need to master
the balance between rapid innovation and
efficient operations in a way that does not
conflict with the overall strategy.
• In other words, automotive companies must
pursue cost reduction and efficiency
improvement, but not at the expense of
further IT innovations that support the core
business.
Digital Strategy & Innovation IT Cost EfficiencyFuture IT Operating Model

6. Automotive IT Strategy 20202020 Deloitte 6
We encourage you to reach out to us on how to position your IT organization and strategic agenda in a way that best
addresses today’s macro technological forces and automotive megatrends as well as COVID-19 mitigation actions.
Contacts
Contacts
Christian Pfeifer
Consultant
Technology Strategy&
Transformation
Thomas Demel
Senior Consultant
Technology Strategy&
Transformation
David Haslach
SeniorConsultant
Technology Strategy&
Transformation
Jonas Glade
SeniorConsultant
TechnologyStrategy&
Transformation
With the contribution of:
Markus Schmidthuysen
SeniorManager
Tech Strategy& Transformation
mschmidthuysen@deloitte.de
Uwe Strauss
Partner
Tech Strategy& Transformation
ustrauss@deloitte.de
Director
Tech Strategy& Transformation
anklein@deloitte.de
Andreas Klein

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