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Is software sparking the automotive revolution?

The term ‘mobility’ has become synonymous with the automobiles of today. Mobility denotes a shift in the industry’s perspectives where the vehicles of today are acting more as experiential hubs. No longer are automobiles perceived as a means to an end.

This shift in perspective is being driven primarily by key trends that are shaping the future of the automobile sector. Foremost among them, is the increasing use of electronics, in the form of sensors and microchips. 

It is no secret that the blueprint for automobiles is undergoing a paradigm shift. Some of the biggest disruptions have occurred in recent years, from advanced driver assist systems to fully autonomous vehicles, connectivity,  electrification, and shared mobility (ACES).  The confluence of these major trends is undoubtedly software.

Here are some quick insights on how software is set to be an inflection point for automobiles, based on research by McKinsey.

Re-assess software approaches

With the accelerated adoption of technology, automobile manufacturers who do not develop adequate software capabilities shall face major challenges and risks, some of these include: start-of-production (SOP) delays as well as inflated budgets. Competitors and new entrants with better software and more innovative shall race ahead.  Further, software issues may even lead to mass recalls, increase customer-safety risks, hamper market-reputation and leave them vulnerable to cybersecurity attacks. 

Today, the divide between highly capable software organizations and its less capable counterparts is already significant.  In fact, already the top companies report quality and throughput that is as much as six times higher than that of the bottom performers. This divide is expected to become even more significant in the near future.

Re-thinking operating models

Many automotive players realize the benefits of strong software development and are taking major steps to enhance software development performance. Some of these players have taken drastic steps to ramp-up their software capabilities and many have hired thousands of software engineers. Whereas others are setting up strategic partnerships, reimagining their governance models, and also increasing the centers of excellence worldwide. 

These steps may prove to be inefficient. A sea change in outcomes shall only happen when automakers upgrade their core software development operating models.  Alarming statistics reveal that a mere 40 percent of leaders are ready to make the necessary operational shits as they understand that software is a major disruptor. 

Today, despite making certain changes in software engineering practices, the divide between the high performers and the rest of the automotive industry is large. Unless operating models are re-imagined with a software first approach, the divide is likely to increase further. Some of the key areas that automobile manufacturers must focus on are automated testing, agile practices, and continuous integration.

Automotive software complexity

The confluence of various technological trends in the automotive space has led to increased software complexity for automobiles.  While this complexity is rapidly rising on the architectural and functional levels of development but the development productivity is lagging behind. Research depicts that software complexity in the past decade grew by a factor of 4.0.  In stark contrast, the increase in productivity was only by 1 to 1.5.  Larger modules in software are becoming more complex, some of these advanced driver assistance systems (ADAS) and infotainment.  Productivity in the aforementioned modules is nearly 35 percent lower vis-a-vis deeply embedded software. 

The top-tier players have 3 times greater productivity vis-a-vis the bottom tier players and 3.5 times better throughput. 

Tackling complexity

To overcome the cesspool of software complexity,  the need to engineer elegant solutions becomes apparent.  To remedy the problem of software complexity before things get out of hand,  companies should focus on a modular approach to software  development with standardized approaches. This will keep software complexity in check.  A service-oriented design where the software is decoupled from the hardware by OEMs can help immensely. 

By using a decoupled architecture with a strong middle-ware layer,  design complexity can be decreased and there would be commonalities across platforms.  The need to re-develop software again for multiple platforms would also get reduced as standardized APIs would be used in upper layers.

Automotive companies today have had to adapt quickly to a paradigm shift in the approach towards automobile design.  Being aware of the disruptive forces in the automotive industry and being prepared delineates a mindset shift. Automotive manufacturers have to imbibe a software first approach as cars evolve into being experiential hubs. This requires ramping up software development capabilities, enhancing software productivity, and dealing with software complexity.  In many ways, a software first approach for automobile manufacturers is an opportunity to open up new vistas in the automotive space.

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