Driven by Smart Data. The automotive industry and the cloud.

Transcription

1 Driven by Smart Data The automotive industry and the cloud. Cloud survey report: Industry experts explore the current and planned cloud adoption strategies of senior IT professionals. Researched by

2 2 Introduction. Disruption has come for the automotive industry. Electric vehicles and hybrid alternatives have already transformed the way we think about cars and fuel. Connected, autonomous vehicles powered by advanced data insights promise a more personalized driving experience. And increased sharing, hiring, and carpooling are reshaping the vehicle ownership model. This connected, autonomous, shared, and electric (CASE) future affects everything from supply chains and marketing to finance and human resources. This report is based on the responses of 80 senior IT leaders occupying a range of roles within the automotive industry. The research was conducted in late summer 2017, as part of a larger survey of 730 senior IT decision-makers in 13 countries and nine industries. In response, companies are rethinking their business models and setting up new divisions, while still working to meet their traditional month-on-month targets. Amid such sweeping change, the spotlight falls on senior IT decision-makers to provide a way to respond to these new business challenges. How is cloud helping them find the right answers?

3 3 Cloud on the cusp. Given the depth of technological disruption across the industry, automotive organizations are looking to develop cloud strategies over the next 12 to 24 months. A quarter have a cloud strategy fully in place and have either already or largely executed, and a further 45% have a fully developed strategy that is underway. All five of the industry s top areas for IT improvement cybersecurity; integration between systems; improving data storage, governance and management; business intelligence, analysis, and data visualization; and agility and scalability align with cloud services. However, the automotive industry is lagging behind the cross-industry average when it comes to strategy implementation. This could be a result of the scale of the challenges and opportunities that lie ahead. Automotive companies are carefully considering how to approach cloud as part of their broader innovation and software development strategies.

4 4 Which workloads go first? For businesses that have already moved to the cloud, or are planning to do so, the three top prerequisites are holistic security, fast processes, and choice of deployment model (private, public, or hybrid). With those conditions in place, the industry is most likely to prioritize its migration efforts on data-related workloads and applications. Databases (69%), big data and advanced analytics (60%), and data warehouses (57%) are the clear workload priorities and above the cross-industry average in all cases. Big data (49%) is by far the main priority for migration of applications. Priority applications Performance management systems Asset management applications Supply chain applications Software development and testing Internal collaboration platforms Sales/commercial applications Marketing/CRM applications Corporate financial software ERP systems Storage and disaster recovery Analytics Big data Customer-facing website Customer-facing mobile applications 0% 10% 20% 30% 40% 50% 60% These companies understand the importance of mastering their data not only to improve the efficiency and integration of their processes, but also to offer a more tailored and connected customer experience. Storage of data, and the ability to access and interrogate it, is critically important. For automotive companies that already conduct their data management in the cloud, or are planning to do so, the opportunity to reduce data storage costs and improve the way database maintenance is automated are key motivations. What were/are the key motivators driving you to conduct data management in the cloud? 1 Reduce data storage costs Automated database maintenance 2 3 Respondents chose up to three of 12 potential options. More effectively scale data storage up and down These priorities reflect the sheer volume and speed of data that is expected to be generated in the coming years. For example, autonomous cars could each produce 20 gigabytes per hour, which would total more than 340 exabytes per year for automotive companies to process and store. Cheaper storage and scalability would enable automotive firms to move away from manual processes, free IT staff from managing data on premises, and start providing the business with the innovative solutions that rapid transformation demands. Gains are already being reported. The majority of those conducting data management in the cloud have improved their ability to scale data storage up or down (56%), and to manage, maintain, and update data (52%).

5 5 Integration unlocks the value of data. 63% of automotive companies are adopting data as a service (DaaS), more than other industries in the research. They have also been quick to embrace PaaS (59% compared with 55% across all industries). Those that have already rolled out PaaS have seen the benefits. 62% say it enables them to better connect applications by integrating data streams to one database and platform. And 55% say their ability to add further functionality or services to applications is improved. Hyundai has tackled the problem of diminishing sales in the midsize sedan market by partnering with Oracle to develop a new, insight-driven marketing approach. In association with marketing agencies Canvas Worldwide and Innocean Worldwide, Hyundai used Oracle Data Cloud to analyze and better understand key audience behavior. Armed with knowledge from integrated sales and service data, salespeople can have more meaningful interactions with customers, and understand more about what they want across a range of service areas, including warranties, recalls, and maintenance. From service to sales history, automotive organizations want to consolidate many different areas of their business. To make this possible, data needs to flow through platforms and applications with ease. Firms need the ability to adjust marketing campaigns and tailor them to target audiences, and to track, nurture, and fulfill sales leads with a seamless lead management system. Automotive marketing departments are working hard to improve the personalization and targeting of their communications. On-premises technologies can support lead development and management, but the cloud is much better positioned to provide intelligence on which campaigns have been effective and why.

6 6 Data analysis: the big opportunity. Half of the companies researched are currently analyzing data in the cloud, with a further 38% planning to do so in the next one to three years. Those that are doing so cite integration of all data sources (33%), the ability to better visualize data (33%), and improvement of data accuracy (46%) as their prime motivators. Quality and governance of data are essential for automotive companies to make better decisions. This will be critical as artificial intelligence (AI), in areas such as machine learning, deep learning, and computer vision, are embedded into autonomous vehicles. Automotive companies are above the cross-industry average when it comes to their ability to analyze different types of data. But a smaller proportion are at the advanced stages of using automation and machine learning to streamline data analysis. This is an area of rich potential. The companies that can exploit and distribute analytics in real time via digital channels to offer, for example, predictive vehicle maintenance, will be able to provide a far more persuasive customer experience.

7 7 Security first. Concerns over data security and privacy were often given as a reason for businesses to opt out of cloud migration. The automotive industry, however, has turned that apprehension into growing confidence. The industry s trust in cloud goes beyond using it as an enabler for other services. A majority of automotive companies are either currently managing their IT security via the cloud (57%), or planning to do so in the next one to three years (36%). That s one of the highest industry proportions overall in the research. This kind of progressive stance will be important. Although the lowest proportion of any industry surveyed, 45% still agree that moving all their IT operations and data to the cloud raises major security issues. Concern not least among consumers about the potential for hacking of connected, data-rich vehicles means that the cloud will need to continue to underline its security credentials.

8 8 From migration to development. Of all the industries in the research, automotive has the highest proportion of applications running in the cloud but the lowest proportion of apps developed in the cloud from scratch. The industry is better at cloud migration than cloud development. Yet the majority of automotive businesses believe that developing applications in the cloud makes them more competitive, more innovative, and faster at releasing code. Release management on premises can be slow going, and this is one reason why IT leaders are likely to want to drive development in the cloud. What is stopping the automotive industry from developing more applications from scratch? A shortage of in-house developers and a struggle to find new talent were two of the main obstacles reported. What do you see as the key challenges to developing applications in the cloud? 1 2 Greater threat of cyberattack 3 4 Shortage of in-house developers Increase in application downtime Struggle to find new talent *Respondents chose up to three of 10 potential options. This skills gap could be the reason why many automotive companies have opened offices in Silicon Valley. A presence in the world s foremost tech center will help companies attract and hire more tech talent, progress their migration and development, and formulate new thinking on the industry s major trends.

9 9 Prepare to accelerate. Cloud can help automotive businesses reduce costs, integrate processes, and gain greater insights ultimately helping improve customer experiences. But those companies will have to be careful that, in their bid to seize those opportunities, they don t lose sight of their parallel strategies for connected and autonomous vehicles. As cloud-native startups disrupt the marketplace, established manufacturers are seeking ways to safeguard their futures. Migrating existing workloads and applications to the cloud is a start, but to compete with these new entrants, incumbents need to step up a gear and start developing applications in the cloud from scratch. That will give them the speed and flexibility to respond to every new digital development and keep at least one step ahead of growing customer expectations.

10 Making it happen. To migrate effectively to the cloud, companies need a strategy that encompasses multiple ingredients: from the underlying platform and applications to integration capability. Above all, they need flexibility to be able to build a custom migration plan that works for them. For further information, visit: oracle.com/industries/automotive Try Oracle Cloud today