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The ability to leverage Big Data to enhance business operations is having a major impact on every vertical in both the public and private sectors. One industry where Big Data appears poised to have a profound effect is the automotive industry. Frost & Sullivan asserts that automotive industry strategies driven (or at least informed) by Big Data and analytics will deliver approximate annual financial benefit—combining cost-savings and incremental revenue—of up to $800 per vehicle.
Stratecast assessed the global market for Big Data and analytics at $ billion in 2014; and forecast it to grow to $ billion by 2019—representing a five-year cumulative average growth rate (CAGR) of %. Big Data—or, more to the point, the ability to leverage Big Data to enhance business operations—is having a major impact on every vertical in both the public and private sectors. One industry where Big Data appears poised to have a profound effect is the automotive industry.
By the year 2020, tens of millions of vehicles, across all world regions, will make relevant data sets available for OEMs—automakers, and other automotive manufacturers—to assimilate and convert into actionable insights. Big Data will bring about differentiation based on metrics such as brand awareness, level of digital engagement of customers, response times for various automotive processes, and vehicle configurability preferences. Frost & Sullivan asserts that automotive industry strategies driven (or at least informed) by Big Data and analytics will deliver approximate annual financial benefit—combining cost-savings and incremental revenue—of up to $ per vehicle.
A bit further into our discussion, we will describe in detail where those savings will emanate from; but a good starting point is an overview of how things are changing in the automotive industry, and areas where Big Data can help support those positive changes. Automakers Must Shift Resources and Strategies to Address a Changing World
Dramatic changes are occurring in the way consumers view the driving experience, and, more broadly, the automotive ownership and operation experience. This is changing the way automakers interact with customers; and new approaches are required to maximize profitability and revenue. Automakers seek to rapidly launch sustainable, connected vehicles; to sell services to networks of intelligent connected vehicles; and optimize the global value chain.
An interesting parallel in another industry vertical, which will be addressed in an upcoming article, illustrates some of the value inherent in leveraging Big Data in the automotive industry. That vertical is retail. Data disconnects are haunting retailers’ operations: products that are marketed and orders that are taken for products that do not actually exist; inventory that is not being exposed to buyers, either in-store or online. Retailers often drive customers away by promoting irrelevant products, failing to build customer relationships through intelligent follow-up, and ignoring consumer preferences on end-to-end tracking when items are ordered. These issues are only worsening as
commerce becomes increasingly complex; and retailers must solve these issues in order to answer customers’ ever-growing expectations—as well as to fundamentally survive.
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