Meeting the challenges of the automotive industry with SAP and NTT DATA

The automotive industry is facing multiple threats that are transforming its business model. From environmental aspects to data, connectivity and ownership models, the cars of the future and their manufacturing processes will be very different from the ones we know today. However, in the midst of all these changes, there’s one constant: SAP remains the industry’s leading ERP solution.

The first episode of NTT DATA’s SAP Industry Trends podcast was dedicated to this strategic industry. Ricardo Langa, co-leader of the LEAP program at NTT DATA SAP Global, and Vadim Zimberg, NTT DATA’s global head of SAP automotive products, discussed the latest trends and challenges in the industry. In this article, we’ll explain some LEAP Program highlights.

Progress towards sustainability

Although not new, the principal trend seen in the sector is sustainability. Manufacturers have had to adapt to new regulatory measures and increased social awareness, which has led to the production of electric or hybrid ranges. However, these vehicles that promised to be a revolutionary solution to carbon emissions are not without their problems. Their biggest impact is in their lithium-ion batteries, which are already posing new sustainability and extraction issues. In addition, raw materials are increasingly expensive, which is ultimately reflected in the vehicles’ prices and consumers’ response to them. The industry has developed alternative options that use, for example, aluminium alloys. But they don’t offer the same performance.

It’s clear that we need to stop using fossil fuels, but even then it’s unlikely that we’ll reach a zero-emission model. This is the reality that the industry is facing, and technology plays a key role in this evolution and in the search for alternative proposals.

For example, new transport models and infrastructures are being explored in smart cities to optimise resources and reduce environmental impact. Moreover, leasing and rental car companies are currently exploring new models known as Transportation-as-a-Service (TaaS). These and other alternatives, such as short-term leasing platforms or flat rates, represent a new source of income for the sector.

SAP at the centre of a data-connected world

In the automotive industry, SAP is still the core solution for ERP systems, especially now that the transition to the SAP S/4HANA cloud is more widespread. This is coupled with a second trend in the SAP world: the shift to a Software-as-a-Service (SaaS) model. This dual transformation, which can be seen in most of the companies NTT DATA works with, involves implementing a cloud-first model that, in turn, is dependent on connectivity. We can therefore conclude that if SAP is the answer, 5G connectivity is the solution.

The concept of the modern car is being approached in a new way. Today’s cars are built around software. In turn, this software is developed using large volumes of data. In order for the data to be used, there must be a strong connection. Without 5G or fast internet connections, these solutions don’t work.

Moving all business processes to the cloud is not always possible, especially in logistics and production, where many critical operations are still taking place in physical environments. But at NTT DATA, we guide companies in the automotive industry through the entire process, allowing them to leverage the competitive advantages offered by SAP solutions. Three key components help us do that:

• Decades of industry experience. We have years of experience working with leading automotive companies. In addition to a proven track record in innovation, we have an in-depth understanding of the industry and its trends.
• Expertise in connectivity and telecommunications. Our high-capacity and resilient networking and infrastructure services make us much more than a consultancy.
• Industry advancement collaboration. For years we’ve been working together with manufacturers and SAP teams on joint innovation and solution development projects, helping them to develop new capabilities and skills in areas like sustainability.

At NTT DATA we place all this experience and knowledge at your disposal to help you in your digital transformation processes. Contact us today and find out what we can do for you.