automotive it strategy


Automotive IT Strategy

Deloitte’s latest thinking on challenges of automotive CIOs and Tech leaders

Geopolitical Shifts, climate change, a global pandemic and related supply chain issues form the new reality that the automotive sector finds itself in. Automotive CIOs and Tech Leaders need to navigate through this new reality. Our latest thinking helps automotive CIOs and Tech Leaders to find the road ahead and navigate successfully through these challenging times.

The Tech Strategy & Transformation practice at Deloitte publishes a yearly insight on Automotive IT Strategy addressing one specific key question for automotive CIOs and Tech leaders. Accordingly, this page underlies a constant evolution from year to year with the newest insights of the already seventh "Automotive IT Strategy" publication on top.

Driving Sustainable Change: Unleashing the Potential of IT Sustainability in the Automotive Sector (2023, Edition 7)

In pursuing a more sustainable world, the automotive industry is at the crucial intersection of innovation and environmental responsibility. In this 7th edition, we present a comprehensive outlook on sustainability initiatives in the automotive industry, featuring greenhouse gas emissions management and the adoption of low-carbon economy principles. One of the most captivating revelations centers around the evolving role of green IT as a driver for a holistic sustainability transformation.

In particular, CIOs are playing a central role in sustainability transformations, acknowledging the impact of IT on an organization’s environmental footprint as CIOs are increasingly becoming environmental champions. These visionary leaders are strategically aligning IT strategies with eco-friendly objectives, directing organizations toward a greener tomorrow.

Moreover, the operational domain of IT offers an enticing glimpse into various levers for implementing sustainability. By focusing on quick wins that produce instant reductions in energy use and CO2 emissions, this effort sparks enthusiasm for transformative action. Going beyond strategies and systems, it captures the essence of organizational culture in fostering sustainability. With unwavering passion, it emphasizes the significance of engaging every individual in cultivating an eco-conscious culture, ultimately shaping an efficient and sustainable technology landscape.

Please find an excerpt of our publication subsequently. For more details, please get in touch with our contacts.

Achieving Business Agility with SAFe: An automotive Case Study (2022, Edition 6)

In the 6th edition of the Automotive IT Strategy insight publication we examine business agility and its implications for the OEM operating model leveraging a client example.  

Current automotive trends are strongly driven by the idea of sustainability and digitalization. The car is moving away from a classic means of transport and is increasingly becoming the focus of the user's own software and service platform. As a result, automotive software capabilities become a key enabler and differentiator in the industry.

Business Agility is essential to be able to adapt quickly and efficiently to these changing market conditions. We see the CIO in the leading role to respond to the change and improve the organization’s agility as a business co-creator and change instigator. He should act as a role model for the entire company and move the business from a project-driven to a product-oriented organization. 

The Scaled Agile Framework (SAFe) methodology helps the delivery organization to translate this approach into action and to organize around products and value resulting in increased speed of innovation. However, the methodology only provides guidance to a certain extent. In our client example - a German automotive OEM - we showcase how to bring the SAFe dual operating model to life by implementing a new business and IT operating model. 

Please find subsequently an excerpt of our publication. For more details, please get in touch with our contacts.

Automotive IT Sourcing: Speed up your Cost Efficiency Initiatives (2021, Edition 5)

Today’s IT leaders are faced with numerous internal as well as external structural challenges: a lack of efficiency in the multi-layered IT service structure of globally distributed suppliers and a limited transparency within the self-built IT service landscape of subsidiaries, to name just two. Rather than just accepting these challenges as a fact of life, we believe OEMs should see them as an opportunity to create a truly resilient IT supply chain.

New automotive IT sourcing trends are emerging, which also help OEMs to address common outsourcing goals. In this Automotive IT Strategy Paper, we provide an overview of levers in four IT sourcing dimensions that will help OEMs to respond to this market dynamic with smart, streamlined IT sourcing and a pioneering IT sourcing 3.0 strategy.

In order to leverage the full potential of IT sourcing, we recommend a comprehensive, end-to-end strategic approach.

Deloitte’s strategic IT sourcing methodology offers a comprehensive, integrated set of methods, content and tools to support IT sourcing projects.

Please find subsequently an excerpt of our publication. For more details, please get in touch with our contacts.

The 3 Major Success Factors: Steering Automotive IT in Challenging Times (2020, Edition 4)

IT leaders have, by all accounts, already overcome the infrastructure breakdowns, license limitations and traffic overload of the initial phase of the COVID-19 crisis. Yet automotive companies and suppliers are still suffering from severe revenue declines and the drastic reduction in shifts and working hours that many players were compelled to introduce.

There are also other challenges facing automotive companies above and beyond those related to the crisis. They still have to contend with macro technology forces that came into play long before the crisis and are now more important than ever. Various long-term megatrends in the global automotive trade are adding to the whirlwind of change and keeping automotive industry leaders on their toes, particularly IT department heads. To name a few examples: the rapid ramp-up of digital sales could be a make-or-break factor for the survival for automotive companies; investing in cloud technology could serve as an enabler of business continuity and future growth; and core automotive innovations such as autonomous driving are in urgent need these days to transport people and facilitate contactless delivery.

We advise automotive CIOs to focus on three success factors in their future IT systems to master macro technology and automotive megatrends like those mentioned above as well as the current global pandemic. This automotive IT strategy paper outlines all three: Digital Strategy & Innovation, Future IT Operating Models and IT Cost Efficiency.

Success factor 1: Focus on Digital Strategy & Innovation to enable growth 

In our experience working with CIOs from various automotive companies, we have identified ten core areas to focus on when developing digital strategy & innovation pipelines – two of which are more important than ever before. Our article provides an overview of these two key areas, namely a robust innovation funnel process and a sound cloud strategy that allows for instant scalability. You can learn more about the most important aspects of these two innovation areas – for example, how crucial it is to establish a well thought-out, agile innovation funnel along the R&D timeline from ideation to a market ready product – as well as other areas designed to ensure business growth.

Success factor 2: Take your Digital Operating Models to the next level

From an organizational perspective, automotive IT needs to shift towards an agile product-centered structure, putting both internal and external customers at the heart of their mission and tearing down the barriers between business and IT. Our presentation offers insight into the structural and behavioral adjustments required and the key things to consider when creating a promising Target Operating Model. One example would be a shift toward providing high-performance platforms that ensure a seamless and efficient automotive value chain. This goes hand in hand with a change in mindset from the predominant time-and-material-based approach to a softer, more value-based posture.

Success factor 3: Speed up your Cost Efficiency initiatives

With the widespread uncertainty of the current COVID-19 crisis, automotive IT organizations have prioritized securing cash flow at the expense of several important innovation programs. This could prove to be fatal if long-term goals are sacrificed for short-term cost reductions. That said, costs must still decrease, making it even more urgent for CIOs to balance rapid innovations on the one hand with efficiency improvements in IT operations on the other.

When it comes to adapting the IT department’s cost reduction strategy, CIOs can deploy three major strategic alternatives: rather harsh cost-cutting (tactical strategy), securing the company’s survival with a balanced strategy, or taking a transformational approach to prosper in the long run. Assessing a company’s circumstances and needs based on several cornerstones, such as time pressure to achieve savings and overall corporate strategy, can help identify the right approach to reducing IT costs. Our article provides more detailed information about these three strategies and their particular features.

Automotive CIOs need to get the balance right between all three major success factors to shape a future-proof IT organization

To successfully reposition their IT organizations, automotive CIOs should focus their IT strategy on these three major success factors. This will require investment in digital innovation capabilities, a number of organizational adjustments and a sound cost strategy that does not neglect innovative advances or critical investments in the future.

Please find subsequently an excerpt of our publication. For more details, please get in touch with our contacts.