The road to the electric vehicles part 2: Powering the transition

Managing towards the new electric vehicle era brings opportunities as well as an urgency to re-examine, even to re-invent, each part of the business. The complex set of challenges automotive OEMs and suppliers are facing requires industry managers, planners and strategists to think carefully about each part of the business and to question assumptions about continuing business as usual.

The good news is that modern tools and solutions can play an important role in innovation and growth for OEMs and suppliers. In this post, we discussed the many challenges the industry faces during this transition from internal combustion engines (ICE) to electric vehicles (EV). In part 2, we highlight some of the tools and techniques that can stimulate thinking about business models and operations and help automotive companies navigate a path to success.

Cross-Functional Planning

Cross-functional planning connects financial and enterprise lines of business in the planning process—an approach that is becoming essential to mapping business transformation. Broadening the role of FP&A (financial planning and analysis) to xP&A (extended planning and analysis) combines sales and operations planning with advanced technologies (IoT, AI, and prescriptive analytics), and uses a unified data model to provide a single view, enabling end-to-end planning across multiple functions for manufacturing companies.

Scenario Modeling

Scenario modeling provides answers to “what-if” questions. It enables people to simulate long-term alternative strategies, develop contingent scenarios, and stress-test financial models, rather than build and continuously reconcile plans in spreadsheets. Companies can proactively respond to changing industry and economic dynamics—for example modeling ICE/EV program mix, profitability and capital allocation - and build business cases to support programs and initiatives.

Operational Efficiency

Operational efficiency based on modern cloud applications enables consistent business processes and a single source of truth across business functions including finance, procurement, supply chain management, field service, human capital management and customer experience. A common data platform is important for seamless execution of business processes like order to cash, procure to pay and source to deliver. It can also enable companies to quickly adapt and respond to business change with a single data alignment and governance model.

Workforce Management

Workforce (human capital) management tools and intelligence are critical in today’s environment of talent shortages at all levels in the industry. "A lot of the discussion that we've heard is around the reskilling and upskilling," Diana Páez, energy & mobility senior director at the William Davidson Institute, told Business Insider. “That means capitalizing on existing skill sets, bolstering workers with new ones, and fostering a brand-new workforce” that includes software engineers, mining and construction, and electrical infrastructure technicians. In addition to core human resources (HR) system capabilities, HR leaders need effective tools to recruit, acquire, train/reskill, diversify and protect health and safety.

Understanding the Digital Consumer

Understanding and connecting directly with consumers are enabled by technology but require new systems and skills to manage and monetize. New platforms are becoming available to unify and enrich customer, vehicle, and dealer data and to drive commerce throughout the customer lifecycle. AI is making it easier for organizations to use smart segmentation and deliver smart recommendations and personalized customer journeys. Organizations are increasingly able to do so in real time and at scale while applying world-class analytics.

ESG Planning and Reporting

Environmental, social, and corporate governance (ESG) planning and reporting capability helps integrate financial and non-financial data to provide performance management for management and transparency for ESG stakeholders and regulators. ESG data is sourced from many systems across the organization including ERP, HR, supply chain, and other operational systems, often in different standards and formats. An ESG solution converts all of the collected data collected into a common standard to meet the requirements for a consistent key performance indicator (KPI) framework.

Modern Analytics

Analytics provides insight into business performance, trends and potential outcomes, and unlocks value in the massive amount of internal and external data collected by automotive companies. Analytics leverages data to augment decisions and helps answer questions about performance and potential outcomes within and across finance, operations, HR, sales and marketing.

Summary

If you do not change direction, you may end up where you are heading.

Lao Tsu

Assessing the multi-dimensional magnitude of the transition to electric vehicles can be overwhelming. Running your business while rethinking it – if you will, building the car while driving it – places a new set of demands on your organization. But it’s likely that the electric genie has left the bottle and that leaves us facing the need to pivot towards opportunity while balancing the ongoing business.