Post on 26-Jun-2020
HOW TO CREATE AND ENABLE A DATA CENTRIC STRATEGY AS TECHNOLOGY TSUNAMI HITS THE AUTO INDUSTRY
ALTEN
TO
Madhu S Naidu
CONNECTED CARS:
DATA DOLLAR$001111111000000000000000111111100110011001100110000000000
A L T E N CRESTTEK
REASON FOR WRITING THIS REPORT
I have been involved in many aspects of the automotive industry for
over 20 years and I believe we are at the turning point for the industry to
begin transitioning to completely digital – and, as a result, data centric.
Connected Cars, factories, dealers, suppliers and customers will be nodes in
the network of the internet world.
Resulting in a shared economy and extensive mobility, this is the
essential next step in making society truly connected and mobile.
This report is based on our thinking, research and comprehensive
experience providing solutions to numerous customers. We hope our high
level perspective to convert data to dollars will help companies develop their
competitive advantage from Connected Car data.
If you have any questions or comments please contact me at:
Madhu S. Naidu
ALTEN-CRESTTEK @ +1-248-602-2082
January, 2018
2© 2018
A L T E N CRESTTEK
ACRONYMS
ADAS Advanced Driver Assistance Systems
AD Autonomous Driving
AI Artificial Intelligence
CAN Controller Area Network
ECU Electronic Control Unit
GPU Graphics Processing Unit
HIL Hardware in Loop
IC Integrated Circuits
LIN Local Interconnect Network
LVDS Low Voltage Differential Signaling
MOST Media Orientated Systems Transport
ML Machine Learning
MVP Minimum Viable Product
MIL Model in Loop
OEM Original Equipment Manufacturer (e.g. automakers)
PCB Printed Circuit Boards
RKE Remote Keyless Entry
SIL Software in Loop
TCU Telematics Control Unit
TI Texas Instruments
UI User Interface
UX User Experience
1G First Generation of Analog Mobile Phone Network
5G Fifth Generation of User Centric Digital Mobile Network
3© 2018
A L T E N CRESTTEK
CONTENTS
1. Introduction
2. What is a Connected Car?
3. New Capabilities Needed to Play
4. Car to Cloud Transformation
5. Smart City Ecosystem
6. Using Artificial Intelligence
7. Structured Agile Innovation Process
Take-Away: Act on your data now!
Acknowledgment
Legal Notice
About Alten Group
4© 2018
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14
15
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A L T E N CRESTTEK
1. INTRODUCTION
In July 2001, I published an article called “Telematics Evolution will
Change the Automotive Landscape” in Telematics Update Magazine when I
was with IBM. At the time we were using a 1G analog mobile network as
opposed to digital, but it still seems so relevant today. Summary verbatim
from the article…
“Wireless and pervasive computing will play a major role in changing the
culture of the automotive industry through the development of advanced
safety features, in-vehicle personal services, and an improved customer
relationship model. There will not be a single killer app emerging that causes
this landscape change.
However, the effective use of terrestrial and satellite wireless relays; advanced
microchips and sensors; software applications and middleware; and open
standards will enable OEMs and Suppliers to make dramatic new innovations.
This will lead to low cost applications and services that can be rolled out
during the entire life of a vehicle (8-10 years), creating opportunities for OEMs,
Suppliers, and Telematics Service Providers (TSP) to increase their revenue
potential long after the vehicle has been sold. The OEM/TSP that delivers a
wide variety of services that appeals to customers may emerge as the winner,
but this is easier said than done in a complex automotive industry..”
5© 2018
A L T E N CRESTTEK
We have come a long way in terms of the evolution of technology,
including wireless communication that has progressed from 1G 17 years ago,
to 5G, which we will see in the near future. However, the elusive “killer app”
has evolved for the automotive industry in the form of DATA.
Data always existed in OEM, dealer and supplier databases. The key
was creating the tools and technologies to discover, identify, manipulate and
process this data in real-time, at a low cost using modern Cloud solutions.
Now powerful catalysts like Artificial Intelligence (AI) and Machine Learning
(ML) have been made available from the likes of Google and its Tensor
Processing Units (TPU) at a really low cost. It is so affordable even a small
startup can manipulate and create killer apps using data. Couple this with the
crowd sourcing of algorithms/predictive models by tapping into the brilliant
minds of global scientific talent, and it becomes priceless for any company;
providing them the opportunity to leapfrog the competition.
If you use Private Equity (PE) and Venture Capital (VC) investments as a
proxy for what could happen in the automotive space, it is clear that
Autonomous and In-Vehicle technologies have received about $45 billion of
investments in 2016/17 according to Brookings and Crunchbase. Less than
10% of these investments are from automakers. So who knows if new startup
bets could displace any major OEM in the next decade?
6© 2018
A L T E N CRESTTEK
2. WHAT IS A CONNECTED CAR?
Cars have evolved from mere metal on four wheels to sophisticated
connected, smart and soon autonomous cars. They can now also drive
themselves using the increasing electronics content (Exhibit-1). This journey
took over 100 years and Detroit (aka Car Capital of the world) was at the
center of it all. After the great recession of 2009, Detroit is being transformed
into a connected car technology hub. In this paper we are using “Connected
Cars” as an all encompassing word that could mean Autonomous, Internet of
Things, Telematics, etc.
The increasing electronics in cars has created challenges for OEMs in
managing and integrating new and advanced electronics. As shown in
Exhibit-2, the integration challenge increases up the pyramid. OEMs now
need technology suppliers to bring new products to the market faster and at
lower costs.
7© 2018
All other
Electronics 1530 40
8570 60
2001 2012 2020
Exhibit-1. Vehicle Electronics Content Growth
100% = $24K $26K $30K
Source: IHS, JD Power, Alten Analysis
A L T E N CRESTTEK 8© 2018
OEM
SYSTEMS
COMPONENTS
PARTS
Car, Truck
TCU/ECU + Software
Sensors, Screen,
Lidar, Camera, etc.
PCB, GPU, Chips
Inte
gra
tio
n
Take, for example, an OEM using an ECU for crash safety in-car. It
would need semiconductor chips from Samsung, ICs from TI and processors
from Intel, all assembled on a PC board by Flextronics. Along with that,
Autoliv may integrate the hardware with flashed software to meet OEM
requirements with months of testing. This means the ECU has to function in
extreme weather conditions, from -40 °C to over +125 °C. If you do not
believe how difficult it is to pass this environmental test, take your smart
phone and place it inside a car on a hot summer day. I guarantee you the
smart phone will not work until it cools down to about 50 °C. These
stringent requirements are necessary for automobiles due to the harsh
environments in which they operate while maintaining customer safety.
Exhibit-2. Automotive Electronics Industry Structure
Source: Alten Analysis
A L T E N CRESTTEK 9© 2018
What is a Connected Car? In simple terms, a Connected Car is an
automobile that is intelligent and connected to the internet – constantly
sending and receiving data just like any other smart device connected to the
internet. In the future, this could also mean using techniques like ‘fog
computing’ where processing happens closer to the edge of the network to
avoid bandwidth issues when going back and forth to the cloud. A simple
illustration of this is shown on Exhibit-3. This means the network becomes an
extension of the car, necessary for the vehicle to function efficiently and
optimally. Of course, for safety reasons the cloud is not necessary to do
manual driving.
In-Vehicle
All
Oth
er
Co
ntr
ols
ADAS
Controls
E-horizon
Provider
E-Logger
Sensor
Data
Camera
Data
Maps
OEM
Cloud
Application
Platform
Infrastructure
Remote
Driving
Traffic
Flow
ADAS
Function
Maps
Update
In-Car
Features
3rd Party
Cloud
Smart Hwy
Data
Exhibit-3. A Connected Car Architecture
Source: Alten Analysis
Fog
Network
A L T E N CRESTTEK 10© 2018
If you are not a car person it can be difficult to understand all the data
a car generates through its communication interfaces today, let alone a
Connected Car that could arrive in the next few years. Exhibit-4 is an
example of all the communication interfaces that are used to transmit data in
cars today. More data is also being generated by the driver/passengers’ daily
interactions with the car, its features, car dealers and other service providers.
Communication Interface
- CAN BUS
- CAN FD
- LIN
- LVDS
- FlexRay
- MOST
- Ethernet
Wireless Interface
- Bluetooth
- WiFi
- LE Bluetooth
- RKE
- LTE / 5G
Exhibit-4. Communication Interfaces in a Car
Exhibit-5 is an example of all the channels of data that are being
generated from numerous sensors in the car. This is just a sample to give you
an idea of the amount of data being generated. Now with all the
autonomous driver assistance features, data sets are growing exponentially.
Therefore, understanding data volume, variety and velocity is crucial.
Source: Alten Analysis
A L T E N CRESTTEK 11© 2018
CAN / CANFD
-Speed
-Steering angel
-Braking G
-Gear position
-Accelerator position
-Engine speed
-Torque
-Oil temp
-Oil pressure
-Turbo %
-Engine coolant T
-Exhaust T
-Brake signal
-Brake %
-Brake pressure
-Main shaft speed
-Air intake temp
-MAF temp
-Gear indicator
-Exterior temp
-MIL codes
-System codes
-TC active
-ABS sys pressure
- …
LIN
-Cabin Temp.
-Door switches
-Sunload
-Ignition status
-Battery data
-Cruise control
data
-Grill shutter status
- …
MOST / Ethernet
- Radio stations
- Driver Info
- Driver
preference
- Search history
- Voice search
- Climate setting
- Location data
- Map search
- Smartphone
usage
- Calling pattern
- Others
- …
Exhibit-5. Data Channels in a Communication BUS
LVDS
-Camera data
-Rear seat
entertainment
data
-Video data
- …
J1850
-OBD data
Source: Alten Analysis
This is just a sample; there
are 100’s of additional data
points available in a car
A L T E N CRESTTEK
3. NEW CAPABILITIES NEEDED TO PLAY
There are many capabilities needed to be a successful automaker.
Just like any capital intensive business, these capabilities include assets and
competencies. Exhibit-6 shows the key assets and competencies that were
required to play in the automotive industry for the last 100 years. The
question is, will these capabilities be enough to propel an automaker to the
Connected Car world?
12© 2018
Key
Assets
Physical assets (equipment)
Global / regional footprint
Brand / reputation
New Features / technology intro
Dealer Network
Key
Competencies
Styling / Design
Cross-functional coordination
Mass production / lean
Cost / efficiency management
Product roadmap for market needs
+
Exhibit-6. Capabilities to Play in the Auto Industry
Source: Alten Analysis
A L T E N CRESTTEK 13© 2018
We believe, the necessary capabilities to play in the Connected Car
market are evolving rapidly. At a minimum, it is driven by the agility and
speed to integrate and execute technology in a Connected Car. Below we
have shown how the same set of assets and competencies need to evolve to
play in the Connected Car “sandbox”.
Key
Assets
Key
Competencies
Physical assets + Cloud + Cyber Security
Global / regional footprint + Mobile footprint
Brand / reputation + Online reputation
New Features / technology + AD+AI+DATA
Dealer Network + Direct online + Social network
Styling / Design + UI + UX
Cross-functional + Consumer products integration
Lean + Agile Software (AI, Cloud, etc.)
Cost / efficiency management + Speed to market
Technology roadmap for market needs
+
Exhibit-7. Capabilities to Play in Connected Car Market
Source: Alten Analysis
A L T E N CRESTTEK
4. CAR TO CLOUD TRANSFORMATION
The car of the past was only connected to the world through local
radio stations for consuming music and news. The only way an automaker or
any dealer could get feedback was when the customer brought the car to the
dealership.
Now envision a future where the car is connected to the internet just
like your smartphone, and it could drive itself to your destination. While your
car drives you around, you could be productive: make video calls, social:
have a family gathering, or relax: get a motivational talk while you share the
ride with your personal advisor.
In this future scenario your car will be connected and aware of all the
devices, public information, local ecosystem and roadway issues. The cloud
will be the center of connectivity as shown below.
14© 2018
Industry
Public
Cloud Roadway
Cars
Local
Devices
Others
IoT
Exhibit-8. Data Centric Platform
Source: Alten Analysis
A L T E N CRESTTEK
5. SMARTCITY ECOSYSTEM
Smart city is an urban or suburban area connected by sensors to
supply information used to manage the area efficiently. This includes data
collected from devices, and assets that are analyzed to manage
traffic/transportation systems, law enforcement, information systems, schools,
hospitals, and other community services. Below Exhibit-9 shows sample
ecosystems from a Connected Car perspective.
15© 2018
OEM
Dealers
Supplier Customer
Local Ecosystem
DOT
OEM Ecosystem
OTHERS
Mobile Ecosystem4G
AppsSmart
Hwy
Smart
Phone
5G WiFi
Others
Retailer
Fast
Food
ClinicAuto
Repair
Mall
Oil
Change
Tire
Center
Others
Insurer
Gym
Exhibit-9. Smart City Ecosystems
Others
Source: Alten Analysis
A L T E N CRESTTEK
Smart city ecosystems provide huge monetization opportunities.
These opportunities are not just limited to cars. Of course, cars and
transportation (public, shared, multi-modal, etc.) are the focus of this report.
We have listed broad ideas below in Exhibit-10.
16© 2018
RationaleServicesCategory
Monetization Industry
Roadways
Cloud
Public
Vehicle
Smart City
Eco-Systems will
enable industry
players to monetize,
public to benefit and
government to
connect citizens.
- Safety& Security
- Intelligent Services
- Tele-diagnostics, Service alerts
- Connectivity
- Road conditions
- Traffic flow, signal info
- Others.
- Warranty
- Insurance
- Product / service offers
- Infotainment
- Replacement part monitor,
- Track service issue
- Business intelligence
- Personal data/preferences/privacy
- Consumers connect directly with
OEM & auto supplier
- Safety, Security, Service
$$$
Exhibit-10. Data Monetization Opportunities
Source: Alten Analysis
A L T E N CRESTTEK
6. USING ARTIFICIAL INTELLIGENCE
One does not have to be a math whiz to use AI and ML. Today these
are tools at your disposal to do predictive automation in the Cloud. This is
not to minimize the advanced work companies do in these areas but to make
a point that these tools will become commonplace just like using office
spreadsheets. So in the future, you can use Intelligence as a Service.
Connected Cars and Smart Cities will be pumping out enormous
amounts of data. What do we do with the data? How do we analyze and
make sense of the data? The data could be in the form of text, binary, video,
audio, images, etc. There are numerous AI models already available as a
service to build, train and deploy, including the following:
1. Location based pricing search
2. Context matching in conversation
3. Video analysis
4. Image processing
5. Speech processing
6. Language translation
7. Predictive analysis of driver/passenger needs
In the next section we discuss how we can use these tools during the
data discovery and analysis phase, to fine tune the application deployment
rapidly during the launch of a product or service from a data platform.
17© 2018
A L T E N CRESTTEK
An important caveat to keep in mind while developing and using
learning models is that they are like a black box with quirks. Despite all the
cloud tools that are available for AI, industry/domain expertise is necessary
for fine tuning the models. Primarily to correct and fix Type-1 (false-positive)
and Type-2 (false-negative) errors.
Based on our deep industry experience in working with leading
automotive companies, our methodology uses relevant Use Cases during the
“training” phase of model development. A process flow of this methodology
is illustrated in Exhibit-11 to give a high level concept for model selection.
There are many ideas and concepts published about how to reduce bias and
improve confidence. This requires understanding of both industry and the
ability to apply the appropriate training dataset, as no model is fool-proof for
every future scenario.
18© 2018
Training
Data
Use Cases
Simulation
MIL/SIL/HIL
Results /
Performance
Learning
AlgorithmModel
Test
Data ?
Exhibit-11. Machine Learning Process Flow
Source: Alten Analysis
A L T E N CRESTTEK
7. STRUCTURED AGILE INNOVATION PROCESS
How do we innovate and bring new ideas to the market? Every major
company asks this question but very few have been as successful as a
focused startup. The key difference is that a startup made up of a few
founders (usually 2 or 3) is an ideal number to create and launch something
fast without the typical organization inertia. This is difficult to replicate in
bigger organizations. Couple this with the technology disruption, and the
outcomes become unpredictable – especially non-linear outcomes.
Looking at a couple major ideas like “ the Google Search” and “the
iPod”, they were launched by connecting the dots using trial and error as
shown in Exhibit-12. Since it is difficult to connect the dots and force
intuition, we have developed a framework for that which has been proven in
many client situations.
19© 2018
● Altavista search ● Goto = Page Rank + Intuition = Google
● MP3 ● PortalPlayer + UI = Apple iPod
Exhibit-12. Connecting the Dots Launched New Products
Source: Alten Analysis
A L T E N CRESTTEK
We have worked with many clients in customizing a framework for
their needs. A typical framework is made up of a combination of ideation
and lean start-up approaches. This framework is a set of tools and principles
that will help our clients discover ideas in the Connected Car market. It will
also help them implement solutions and add value to their customers that
will generate new revenue streams. This process is lean by nature – go to
market fast or fail fast. We have shown a sample framework in Exhibit-13.
This is not a stand-alone framework, this will be combined with our ideation
funnel in Exhibit-14 to drive the ideas through a fast validation process.
20© 2018
Differentiation MonetizationThink
IdeateLean
Start-Up
Exhibit-13. Framework For Agile Innovation
Source: PCUBED, Alten
A L T E N CRESTTEK 21© 2018
Exhibit-14. Framework Driven Innovation Process Flow
Hardware
Embedded
Systems
Software
In-Car
Network
Sensors
Shared
Mobility
Wireless
Network
Battery
Big DataCan you
Predict
Future
Outcomes?
In
2020
2025
2040
Exhibit-15. Technology Roadmap to Connect the Dots to Outcomes
Furthermore, we use a technology roadmap to look for non-linear
outcomes as in Exhibit-15. When we combine multiple disruptive technologies
the outcomes become difficult to predict without an agile innovation process.
IDEATE
Funnel
ReviewMVP
Source: Alten Analysis
Source: Alten Analysis
A L T E N CRESTTEK 22© 2018
Below is our data discovery process (Exhibit-16). This is broad-based
and part of our agile framework to rapidly ideate and deploy revenue
generating ideas.
Time used
Work engagement
Texts
Mails
Messages
Contact Records
System/Chat Logs
Agents
Telemetry
Web service apps
IoT
Failures
Successes
Alerts
Events
Warnings
Clients
Dealers
Partners
IngestAnalyze Validate Deploy
Data
Discovery
Exhibit-16. Data Discovery-Deployment Process
Source: Alten Analysis
A L T E N CRESTTEK 23© 2018
Strategic “Focus Area”?
► Do we understand Data?
► Do we need a strategic review of
Data?
► What is the volume, variety and
velocity of data?
What?
► What data do we have/create?
► What new data should we create?
► What is the value of the data?
How?
► How do we harvest the data? Is it
easy? Is it secure?
► Are we harvesting it ourselves or
with partners?
► How do we analyze the data?
► What tools do we have or use?
A non-exhaustive sample of a “focus area” analysis list is shown below
that has been used successfully in the past.
Customer Value Proposition?
► Who is going to benefit?
► What is the value for them
(B2C/B2B)?
► Will they pay for this?
► What is the competitive
landscape or substitutes?
Cost – Benefit?
► What is our competitive
advantage?
► How long to launch and test?
► Degree of difficulty to execute?
► What is the cost?. ROI?
A L T E N CRESTTEK 24© 2018
The beauty about car data is that any player in the supply chain can
access it, with varying levels of difficulty. The natural owner, the OEM, has
absolute control of data and is in the best position to take advantage of
converting this data into dollars. However, this strategic advantage could be
squandered if OEMs are unable to deliver value-adding data-to-dollars
products and services in a timely manner. Many players are already starting
to access that data through smartphones and aftermarket products/services
by providing valuable services directly to the vehicle owners and their local
ecosystem.
It is our hope that this high level perspective on converting data to
dollars, and our proven framework for launching products and services faster
with less risk, will help your company develop a competitive advantage using
Connected Car data.
TAKE-AWAY: ACT ON YOUR DATA NOW!
A L T E N CRESTTEK
ACKNOWLEDGEMENT
I feel lucky to be part of the automotive industry and
witness the digital transformation of the automobile. I would
not be here without my customers and their trust in me to be
part of hundreds of technology, engineering and strategic
engagements.
Today I am part of Alten group – a global technology
and engineering services company – which acquired Cresttek,
a company I cofounded.
I thank our VP of Digital Transformation, Tom De Winne,
for providing valuable feedback on this report.
25© 2018
A L T E N CRESTTEK
LEGAL NOTICE
Opinions and estimates constitute judgment as of the date
of this material and are subject to change without notice. This is
not an investment advice. Any interpretations derived from this
document are the sole responsibility of the reader.
© 2018 ALTEN CRESTTEK. All rights reserved.
No reproduction is permitted in whole or part without written
permission.
Disclaimer: This content is for general purposes only, and should
not be used as a substitute for consultation with professional
advisors.
26© 2018
A L T E N CRESTTEK
ABOUT ALTEN
27© 2018
ALTEN is a global technology and engineering services
company that the world’s automakers come to for solutions.
Why us?
We sell solutions and not projects. We are more than an engineering
service provider. We bring answers to your difficult questions using our
extensive engineering, project management and technology solutions
experience.
For more information visit:
www.alten.com
www.cresttek.com