How Does the Digital Community Affect the Car Industry and the Architecture Team?

Currently, there are many discussions with customers about digital strategies, the impact on business strategies and models and the role of enterprise architecture in the process. In these discussions, I keep seeing that the emphasis is mostly on things like mobile strategy, apps and digital platforms. Of course, these are all important issues that you have to tackle and implement. But what does a digital business and IT strategy look like and which additional value do IT and the architecture team provide at the end of the day?

Just recently I came across an automotive company which designs and develops cars they want to have right now or they want to have in the near future. Afterwards, a community member can go to a local factory and have the car printed with a 3D printer. A minor amount of assembly completes the whole process. The company itself “only” provides the framework, ensures strategic partnerships and initiates projects and design competitions for the community. So, is this what an automotive group looks like in the future?

Certainly, this company is currently not a big player in the automotive market but it definitely has the potential to become one. However, the influence of this concept on the traditional automotive industry is enormous. What do the readers of this blog think? Do we have long supply chains including complex dependencies and risks in this concept? I would say “no”. Do we need large car factories producing cars more or less centrally? Again, I would say “no”. By the way: decentralization does not seem to be only going on here. The energy sector also started a decentralized concept many years ago using intelligent smart home concepts.

When talking to representatives of the traditional automotive industry, we often discuss themes such as application modernization, digital target architectures and capabilities, cost transparency/reduction or connected car – just to name a few. At the same time, companies are trying to speak directly to the end customer which puts the dealer at a disadvantage. The displeasure of the dealers can be imagined and sometimes it can already be perceived.

Now, let us imagine a traditional car company going a similar way as the company I just came across. What would this mean for them?

The creative designers of the company could step more into the moderator and governance role as well as propose and go along with designs or also initiate competitions for the community. They will definitely play an active role. Nevertheless, large parts will have to be supported and decided by the community. Basically, this is the ideal platform to interact with the end customer directly, keeping the contact to them and getting feedback directly and promptly.

The development process for new models up to marketability – which nowadays takes many years and involves a bunch of engineers and designers – can be realized within weeks or months using this concept.

The engineers can continue playing an active role in this context as well. But, instead of focusing on the construction of cars, they mostly focus on providing standardized elements and building blocks so that the members of the community can simply assemble the cars they want to have. Additionally, they also need to allow the integration of completely external (spare) parts to work in a community car as well. Consequently, they step more into a moderator, standardization and governance role. A community member does not buy a car which was previously produced in a car factory via a dealer. The member can either have his/her own car, one of the project cars or a car of the car company “printed out and assembled” for a reasonable price using the local factory. Long supply and production chains barely exist in this scenario. The car dealer can now step into the role of a local factory and thus intensify contacts with customers and expand its business model. It is also quite possible that a local community is formed around these local factories, which in turn develop and implement independent models and concepts for the local community members.

In the after-sales area, the spare parts necessary for repairs can easily be printed out and assembled at a local factory. A long and cost intensive production, the storage of spare parts in central warehouses and supply chains are not necessary in such a process anymore. Even classic cars could still be provided with spare parts by simply printing them out. Try to imagine the positive customer experience with such an approach. It takes me right up to some other questions. Are we going to have classic cars in the future at all? Is it still necessary to buy new cars after a specific amount of time and does the age of a car play an important role? Basically, everyone in the community is able to print out (spare) parts and permanently renew or modify their cars according to their current or future needs. What would a Car Lifecycle Management look like, let alone guarantee, obligingness and the price of a car or of spare parts?

I could go into some more details here. But, let us stop here briefly and ask ourselves the following question. If we already have such major changes in the business environment, what does this mean from an architectural point of view and finally for the architecture team?

Without any doubt it should already be very clear that complex product development chains, production chains and supply chains and processes with dependencies hardly exist here, or not at all. Consequently, no complicated business and IT architectures must be developed and documented for these areas. If necessary at all, then they must be quite rudimentary and tailored to a community. I will not event mention the effect on the cost structure of the company and the IT.

Since I already spoke about a community, what do the terms “EA”, “Customer” and “Product” (currently a car) actually mean for the architecture team and for the company?

From this point of view, the architecture management is hardly going to only keep referring to the traditional company and its complex enterprise architecture. The community, meaning customers, partners, suppliers or even competitors, is part of the overall architectural observations and is actively involved in the development of the enterprise architecture. Thus, the architecture team needs to learn how to deal with and accept such a situation as well as to outsource tasks or even to offer a service catalog – the question then would be to whom.

Who is actually the “customer” for the architecture team? In this scenario, the architecture team suddenly stands in front of the door of the end customer, is part of the new Business Value Chain, offers services, plays an active role in the development of business models and also changes the necessary enterprise architecture with the community.

The focus of the IT organization, the architecture team, its skills and knowledge will change dramatically under these circumstances. It is much more a matter of acquiring business know-how, putting emphasize on the business value of their architecture and their tasks. Furthermore, they need to ensure that they can govern and control the overall enterprise architecture, the related activities and define standards that are valid for the whole community as well as to accompany the community to a specific level.

Lengthy modeling and documentation of complex enterprise architecture, or a “mass production” of artifacts (or call them data graves) will hardly play a role for the architecture team – they are taken over partly by the community as well. The architecture team must only make sure to keep an overview; governing accordingly and providing customizable analyses if they are required.

We still have the open issue about the “product”. If new cars are not needed anymore because we are able to renew or change them all the time, what does the term “product” practically mean for the automotive company and for the architecture team? Is it still a car in the traditional sense of meaning, or are we also talking about an Intellectual Property? If so, who is the owner of the intellectual property and its data and what is its price, if I am part of the development process?

Therefore, the architecture team is encouraged to define a comprehensive data strategy and model and they must also be able to manage, protect, provide and integrate the data and information of the entire community and make it available to the community anywhere and anytime as needed. Of course, this also has to work properly when millions of community members are using a bunch of different tools and standards to participate in the whole process.

Consequently, data and critical information will be an even more “valuable asset” for the company, than it is nowadays already. The one, who is in the leading role, providing a platform, an intelligent enterprise architecture management, standards and simultaneously defining and providing crucial bits and pieces for the business value chain holds the Holy Grail – Architecture Team.

This certainly is a small scenario and I also do not claim perfection or completeness. But everybody knows the term that is often used in the context of enterprise architecture: “Business and IT Alignment”. With this scenario as a basis, you can completely delete this sentence and replace it with: “IT is part of the business”. This fits much better under these circumstances.

Another example from the construction industry is Yingchuang.

What does a scenario look like, when in the near future you will be able to print a house and assembling it within a couple of days as it is already possible in China? I would be happy to discuss this scenario with you.

You are in the driver seat, Architecture Team!

 

About the author:

Danny Weinberger is the Lead for Enterprise Architecture Central & Eastern Europe and additionally is responsible for CSC’s global offering for Enterprise Architecture, EA Edge. He is working in the IT industry for 14 years and held various roles, such as Solution Architect, Business Architect and Enterprise Architect in different organizations.

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