Why hybrid cloud works best for the automotive industry

Why hybrid cloud strategy works best for the automotive industry
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The automotive industry is being impacted by the convergence of several macro-economic factors and technology-driven innovations. Vehicles are being built differently as they become more autonomous and connected. Earlier, navigation systems were considered a standard automotive component and generally outsourced from third-party vendors, but not anymore, these systems now form part of the critical infotainment system that is responsible for elevating the user experience by making the automobile smart. As a result, OEMs are placing greater emphasis on standards that meet the best quality, usability, and performance criteria.

Interestingly, contemporary cars come with over 100 million lines of software code to deliver sophisticated features such as high fuel efficiency, performance, and emissions. As technology becomes mainstream, the lines between the automotive and technology industry are beginning to blur with companies such as Google making a foray into the automotive sector, bringing in greater competition. Increasing competition has also led to an emphasis on innovation with new models delivered in smaller timeframes.

Additionally, COVID-19 has accelerated the need for flexible and agile IT infrastructure which not only enables remote working of OEM’s office staff but also enable their dealership network to be smarter and more digitally enabled to engage users.

To support this new reality, automotive OEMs need a hybrid cloud strategy to deliver required flexibility and agility.

The case for a strong hybrid cloud backbone

As development cycles get shorter, the entire IT infrastructure needs to support new-age R&D practices such as simulation, open source/open standard software, API architecture, Agile processes, and cloud based infrastructure.

A robust technology backbone is an imperative for automotive companies who are striving for efficiency and high-speed innovation. The IT needs to run flawlessly, and be accessible from anywhere enabling manufacturing plants to run production on a 24x7 operations model. More importantly, it must keep their IPs and customer data secure. The IT infrastructure should allow the organization to focus on its core business and empower it to deliver on its business objectives. A cloud-based infrastructure helps meet several of these imperatives. As per the findings of the Infosys Cloud Survey for manufacturing firms, manufacturers expect outcomes such as a standardized and integrated technology landscape, reduced time to market, and enhanced enterprise wide mobility and collaboration from their cloud computing programs.

Given that differentiation and new features offer an important competitive advantage for automotive manufacturers, Intellectual Property (IP) plays a very important role. There were as many as 11,044 automotive sector patents filed at the European Patent Office in 2018. Not surprisingly, automotive manufacturers are extremely secretive about research and innovation efforts. Therefore, it is understandable that they might have certain reservations about storing their data over public cloud infrastructure. Interestingly, automotive manufacturing also requires a great deal of collaboration and exchange of data between suppliers, dealers, third party vendors, practically, across the whole supply chain. In most cases, public cloud infrastructure is best suited to achieve this.

Given these diverse requirements, a hybrid cloud strategy works best for this industry where they can move applications on-premise (private cloud) and on the public cloud based on different needs. Automotive companies can leverage a combination of global private cloud datacenters, edge systems for use in plants/manufacturing facilities, and public clouds that come combined with the power of a SMART Network to run the most optimal and efficient operations.

Besides, there are several advantages that a hybrid cloud infrastructure brings for automotive companies:

Better communication

Cloud infrastructure facilitates better communication across suppliers, manufacturers, and dealers to enable a better customer experience. For instance, it can capture dealer feedback in real-time and thereby enable effective sales planning and forecasting. It can also help align manufacturing, part exports, and delivery to ensure optimum delivery lead time for customers.

Simplified project management

Cloud allows for a single view version of the truth since the data is stored in only one location instead of different versions on different devices. Also, the data is accessible remotely across the globe through a secure channel. These features can facilitate superior project management since it eliminates redundancies and knowledge gaps. In turn, this can significantly increase productivity and speed up innovation.

Easier tracking for consistent product quality

Each automobile is made up of thousands of individual components. Tracking the quality of these parts through the manufacturing process is a tedious and time-consuming task when performed without any technology intervention. Smart manufacturing practices that leverage digital technologies can significantly simplify quality management by enabling easy tracking.

With Europe’s move towards zero-emission cars and electric vehicles, manufacturers are looking at introducing new models with innovative features. This is bound to drive cloud adoption as is evident from the latest Markets and Markets reports that found that the European cloud based solutions market for automotive is growing at a steady pace as most of the vehicles are equipped with high-end entertainment and safety features.

  • Umashankar Lakshmipathy, Senior Vice President and Regional Head of Infosys Limited.
Umashankar Lakshmipathy

Umashankar Lakshmipathy, Senior VP and Regional Head - EMEA, Cloud, Infrastructure and Security Services, Infosys Limited. Umashankar is a Global Executive with 28 years of I.T experience driving significant growth across global markets for a variety of industry segments in I.T outsourcing.