Automobile Industry need for new performance indicators
The automotive industry and OEM’s is on the journey of digital transformation and aiming to set new goals and metrics to assess the industry performance and their success in terms of digitalization. So the automotive industry and OEM’s will witness a new performance indicator to measure the effectiveness of their efforts towards digital transformation.
There is a need for the digital performance indicator across the value chain. These indicators will also be required on different stages such as for the management of supply chain, vehicle to life cycle management and sales and marketing.
The most important performance indicator for the auto OEM’s is the customer, from past the automakers was finding it difficult to measure the driver or vehicle owner performance. The automakers are on the verge of setting up a metric to assess customer satisfaction. So multiple customer performance indicators will be the key to achieve accurate and more granular insights on customer loyalty and their spend structure.
In addition, the goals for setting up the performance indicator need to be aligned with the industry vision. The performance indicator should clearly reflect the performance based on the changing landscape. The performance indicator should take into account digital services offered by the automakers to the car as a service and mobility as a service. Based on the business model, the vehicle will become the part of multimodal transport solution i.e. it will become part of a much larger transportation concept. Initially, the car should reflect the connected living solutions and should include parameters such as inside vehicle media access, managing energy, and connectivity to other smart devices.
Initially, in the automotive industry, there will be two forms of performance indicator: the first will highlight the current business practices and their optimization with the help of digital integration. This process will extract the performance indicators from existing business and finance metrics. The second will be focused on the new businesses and services created with the help of digital functions. Online sales, leads, and conversion ratio will be the key parameter to deduce the performance of online vehicle sales.
Sometimes, businesses find it difficult to identify the difference between enterprise performance indicators and business performance indicators. The profit margin and revenue are the measuring parameters for an organization but to measure the real effectiveness of these parameters, there will be a need for pre-defined metric.
The performance indicator for the leadership and management team is also important. The efforts of the management team will be easily quantified with the help of digital metric this will further facilitate the correction if required within time.
The digital transformation is opening up the new revenue streams for the automakers. The trends are highlighting the requirement for the new metric to measure the industry performance in a more accurate and efficient way. The best way to learn and implement these KPI is by looking at different industries such as telecommunication ARPU model is used to measure average revenue per user. The automotive industry is also expected to use a similar kind of model in the future.