ISSUE 03 2014
CONNECTED CARS
15
A car OEM like BMW obviously has huge resources in IT and manufacturing, but they might also want to extend their service and value chain into the customer’s home
Kfir Dan-Ari, director at AmDocs
So where do CSPs sit in the value chain? All this activity presents a potentially bewildering set of opportunities – and threats – for CSPs as they seek to explore these new service and revenue chains. As Sanat Joshi, vice president at Oracle, comments: “CSPs have a fear of being excluded from the IoT world and, as the automotive sector grows out of the first generation of fairly basic telematics – concierge services, navigation and so on – many are now seeing the car as a connected device and a device where they can make a number of contributions to improve the user experience. On one hand, this focus on customer experience involves enhancing the delivery of infotainment services and content to the vehicle’s occupants – a classic B2C model. On the other, there’s the B2B angle involving a broad range of telematics functions which is about far, far more and is still currently a relatively ill-defined space.
“One key concept here,” Oracle’s Joshi adds, “is the growing interest in service transformation and servitisation. In the old days, the business model was ‘we’ll sell you an engine’. Now, it’s moving into a space where it’s about selling you an hour’s engine time and using telematics to improve things like maintenance or offer pay-as-you-drive insurance. Supporting these kinds of business models is going to force CSPs to move out of their comfort zones and has big implications for billing systems and policy management, with requirements like split billing. What were ‘nice to have’ functions in the old world of telecoms will swiftly move to become critical assets.”
This perspective is amplified by Kfir Dan-Ari, director at AmDocs: “It’s a very fragmented marketplace out there and most of the systems involved won’t be ‘owned’ by the CSPs. Despite that, with the right systems in place and the right
organisational structures, CSPs can leverage their retail and customer relationship experience in a number of ways to support other parts of the value chain – such as providing billing services for application service providers (ASPs) while also providing one bill and one call centre support. This naturally creates an environment as well that can be used for cross-selling and up-selling other products and services. That said, ASPs and OEMs often don’t want any more than connectivity as they want to own the customer – though this obviously depends on how expert and well resourced they are themselves. A car OEM like BMW obviously has huge resources in IT and manufacturing, but they might also want to extend their service and value chain into the customer’s home.
“Alternatively” expands Dan-Ari, “an insurer might want to offer pay-as-you-drive insurance – a good opportunity for a CSP to employ their billing functions. We’re finding that a number of CSPs are now approaching us for consultancy services to help them understand these new business models and use their APIs to build solutions. Needless to say, Cloud architectures are an essential part of this whole solutions hosting model and some are using our own offering here.”
A springboard to new services and revenues? There is a wide range of possibilities here to be explored, believes Warren Tucker, managing director of network practice at Accenture: “Different models will exist; however, the real opportunity for the telco is created via the trusted billing relationship. The ability to purchase items ‘in-car’ and create an open ecosystem that removes obsolescence issues will be important. However, telcos need to move quickly with the mega-platform likely to see value in a market with significant
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