BMW: AUTOMAKER COMPETES ON THE DIGITAL FRONT

Critical Thinking Questions:

1. Other than selling more cars, what potential benefits do connected-car technologies offer auto
makers such as BMW in terms of enhancing long-term customer relationships?

Connected-car technologies basically can capture every data allowed by user to be stored in the
local drive of the car or central server of BMW. By having data captured in terms of user
preference in drive settings, destination, travelling time and comfortability setting in a car, BMW
can use this information to further enhanced capability of its automation system in the car to be
more personalized. By understanding the user requirements through data mining from daily
usage of the car, BMW with the help of AI can personalize the setting for BMW drivers and
improved user experience of the driver. Owner of BMW cars will feel that the car understand
the requirements and helps the owner to adjust preference of drive settings based on
information captured earlier. By having a database of user experience, for the next car purchase
by the owner of BMW, the previously similar settings can be transferred to the new car and
makes it feel like the new car has been customized to suit the owner expectation.

Through connected-car technologies, BMW can use this data for research and development of
new product or improve current connected-car technologies. By having all the data BMW can
specify or prioritize which development or improvement required to make connected-car
technologies more user friendly or more intuitive. Data from connected-car technologies
provides BMW an empirical data which can be translated into AI technologies by assessing the
big data and find the correlation of the data for AI development. Supported by customer
experience survey, BMW can further design technology solutions needed by drivers of BMW
cars. This information is vital for BMW to be able to build connected-car technologies which best
suited for their customers. All updates or new features can be downloaded to the current BMW
car systems or for new BMW cars. This will ensure all BMW cars are up to date with latest
technologies and for those cars who doesn’t support the updates due to obsolete Operating
System of the car can kickstart the users need for new cars that support new technologies.

By having intuitive and customer centric connected-car technologies, it will ensure the
continuity of selling BMW cars to consumer and further enhancing long-term customer
relationship between owners of BMW and BMW.

2. What responsibilities does BMW have to its customers regarding the data it captures via the
various connected car technologies that it builds into its cars?

By collecting data from customers, BMW is subjected to secure all the information stored by
BMW to ensure the privacy of BMW customers. Customers data utilization should be informed
beforehand in order to ensure that data being used has been agreed by customers. BWM need
to ensure all the data server need to be protected from cyber attack as they hold vital
information of their customers such as name, contact number, addresses etc. Any customer
 data breach should be informed to the customers and authority to ensure the customer privacy
or security is being taken care of.

3. Of the primary components of an ERP system that were identified in this chapter, which
modules are likely to be of highest importance to BMW if it continues to focus on in-house
development of new technological features and services rather than partnering with an
established personal technology company, such as Google or Apple? Would those tools need to
change if BMW establishes a long-term partnership with a technology company?

The modules which are likely to be highest importance to BMW if it focusses on in-house
development of new technologies are:
I. Supply chain management – it is important for BMW to monitor their supply chain
management in order to ensure that all the material supplies should be reliable to
ensure customer satisfaction. Through this module, a maintenance integrated in
connected-car technologies will know what kind of services is due. It can send a
notification to BMW service center and it will be used to forecast the availability of the
required spares or consumable item in the service center. If the materials found to be
not available or enough, BMW can automatically start supply chain management to
restock the materials. This will ensure that the customer experience is at highest
satisfactory due to availability of the materials and at the same time save BMW in
holding large volume of stocks in warehouse.
II. Customer relationship management - Customer can pre-book their appointment
through BMW in car apps or connected-car technologies can send notification for
servicing to BMW service center for upcoming maintenance. This module will help to
save all the information related to the owner and any of BMW owned by the customer.
This will help BMW to assess their customer and further improving their sales strategy
or marketing strategy to ensure long-term relationship with their customers. Any
complaints by the customer can be logged and further being used to improve their
customer services.
III. Maintenance, repair and operations – BMW will require this module to overlook their
in-house system hardware reliability. This will ensure that data center or service center
are well maintained and there is no downtime that will make the data center to be at
risk of cyber-attack.
IV. Product lifecycle management – BMW requires this module to keep track with all
technologies developed for Connected-Cars. The historical data for every technology
can be used to further improve quality of product and to shorten the development
phase through learning from previous project. Some of the development can utilize a
platform that has been build in previous version in order to reduce development time.
Product manager can review the performance of each technologies based on the data
from SCM, CRM and MRO modules. It is important that all ERP module are fully
integrated to ensure all data can be stitched together and provide a holistic approach in
product development.
If BMW changes their policy to establish long term partnership with a technology company,
these tools will not require for BMW to change. BMW has two options as follows:

I. Allowing access to BMW ERP system to technology company partner. This approach will
give BMW the benefits to control the data to be in their data center or ERP system.
However, some controls need to be developed such as restriction to all access in ERP
system. BMW can allow their technology partner to assess only relevant ERP modules
and specific to their projects in order to ensure consumer data privacy is at BMW
highest priority.
II. Integration of BMW ERP system with Technology Partner ERP system. BMW can develop
a bridging tool or middle ware that allows BMW ERP system to communicate with their
technology partner ERP system. This approach will ensure BMW data privacy remains
untouched by non-BMW employees. However, integration tool can be expensive and
can add more cost towards the partnership. However, this cost can be viewed only as
initial cost which can be capitalize during the project phase under CAPEX cost. This will
ensure that BMW is committed in securing data privacy of the customer and willing to
spend to ensure their customer interest and privacy it as BMW highest priority. This
approach would be seemed as contributing factor towards long-term customer
relationship.