The global automotive industry is barely prepared strategically for digital transformation. Organisations lack a clear and revolutionary vision that recognises the importance of new digital partnerships.
This conclusion is drawn by KPMG and Egon Zehnder based on the 'Digital Gravity' survey, in which 500 managers in the automotive sector participated. The survey shows that 90% of companies are aware of the need to change both strategically and in corporate culture. At the same time, over half of the organisations have not yet taken any steps to this end at the strategic level, while over 45% have not yet initiated the process of achieving a new corporate culture.
"A majority of the companies in this survey believe that a different culture is necessary to survive in the digital world," says Loek Kramer, partner at KPMG and segment leader Automotive. "This requires collaboration with true digital players and has profound implications for corporate culture. Yet most companies think they can achieve a transformation entirely on their own."
Moving target
92% of respondents say they have a good understanding of digitalisation. KPMG points out that digitalisation is a "moving target", and therefore companies cannot work towards a definitive end goal. Almost 80% of respondents agree with the statement that the final outcome of digitisation is the result of several intermediate phases, not all of which are known at the moment.
In practice, this means that companies need to digitise dynamically. In doing so, according to KPMG, they need toolkits and methodologies that will give them a better grip on digitalisation and make digitalisation more tangible.
Functions of digitalisation
Asked about the function that digitalisation should fulfil, 44% mentioned designing and managing the development of new business models. 40% prefer to see digitalisation fulfilling a support and design function. Only 15% mention supporting existing business. From this, according to KPMG, it can be deduced that the majority of managers associate digitisation with new business and digitising existing business is less of a priority.
With this in mind, it is striking that almost 80% of respondents said they have a unified digital strategy. Kramer: "This is typical of the old thinking in the sector. To deal adequately with digitalisation, different approaches and strategies are necessary. However, no more than 10% indicate that they follow different strategies in the organisation."
The absolute belief that digitalisation should be fully embraced is lacking among surveyed companies, KPMG argues. However, digitisation is not only about a top-down strategy, but also about a complete mindset and culture change across the entire organisation. Central to this is exploring both new partnerships and networks, and gaining trust in the new kind of partners.
Digitalisation: evolution or disruption
Respondents were also asked in the survey whether they see digitalisation as a disruption or evolution. In a disruption, according to KPMG, completely new business models and products are created, replacing their older counterparts. In an evolution, new business models and products are initially juxtaposed with their traditional counterparts, with the aim of merging them over time. 34% of respondents in the survey said they see digitalisation as a disruption, a statement also endorsed by KPMG.
KPMG points out the big differences in how different functions view this statement. For example, 51% of managers in digital business units see digitalisation as a disruption rather than evolution. In contrast, HR and IT departments are very conservative and generally see digitalisation as an evolution. This is striking, especially since, according to KPMG, these two departments will actually be most affected by digitalisation.
Ecosystem
"The future is best defined by the development of chains that are not isolated, but focus on the entire ecosystem rather than solely multifunctional enhancement of a product. This ecosystem can cover energy, mobility, insurance, internet, urban planning and more, and each individual player must explicitly define its own role in this ecosystem," KPMG writes in the report.
More information can be found in the interactive research report by KPMG and Egon Zehnder. This report contains all the results of the study, including figures by country and function.
Author: Wouter Hoeffnagel
Source: KPMG
