BMW is bringing software back in-house so it can deliver seamless digital experiences for its customers - something more valued than horsepower or engines in today's market, its digital business models lead said.
It has turned its focus to clawing back crucial customer data that has previously been left behind with dealerships, partners and dashboard infotainment system manufacturers in a bid to learn more about its drivers and prevent churn.
“Our competitor is not Audi, Jaguar Land Rover or Mercedes but the space of consumer electronics players. This is a big big shift for car industries: to have that attention to detail in digital car experiences in a seamless way”, said Dieter May, BMW’s digital business models senior vice president.
This means that BMW needs to apply a certain criteria to each product it releases like integration, security, predictive capabilities, personalisation, whether it is smart, and lastly, “delightful", he added.
Shunning an outsourcing model for in-house products built on cloud platforms like Microsoft Azure and Amazon are key for turning around software builds from “year cycles to daily cycles” so an internal development team have a better control over change requests and other processes when iterating.
Speaking at Cloud World Forum this morning, May revealed that the firm is moving from a Waterfall to Agile methodology to help grasp this insight: “We [BMW] are coming from a traditional world which is high tech, but super complex. Now it is all about the dramatic, disruptive changes that are coming and we really need to engage with the consumer and build ‘know how’ there. To do that you need new competences and internally restructure.”
‘We are the biggest data collectors in the industry’
Further, providing brand loyalty in the same way Apple does through digital is key to preventing churn, May said. But this means, like many firms across all industries, BMW will “need to massively change our culture to a customer centric model.”
He added: “Only 4 percent of installed car base in the world is used at any time - this is probably the biggest waste of capital in the world.”
Yet the car industry is in a privileged position due to the role it plays in the Internet of Things; BMW models have “100 different sensors” that have yet to be exploited, May said.
The firm recently pledge not to sell driver data to third parties like insurers or local authorities despite the new revenue stream it could provide.
May said that many car firms are still figuring out whether to purchase or produce their own satellite mapping capabilities - a key feature to connected and increasingly driverless cars.
“There is Google maps - if you want to surrender you can do it and there are only around three other assets around.”