As part of the launch of the Business as Unusual book (click on badge on left to get to the Amazon page) by Thomas Saueressig and Peter Maier that we helped conduct interviews and research for, we will share excerpts from each of the 10 chapters/300 pages, and also give you a “behind the scenes” view by sharing snippets of some of the over 100 SAP, customer and partner video interviews that ended up in the book.
Here are some excerpts from the second Megatrend – Integrated Mobility. Includes quotes from executives at MHP, a Porsche unit, Stadtwerke Augsburg, Gebr. Heinemann, SAP and others.
“I’m a Traveler of Both Time and Space” - Paul Salopek embodies the lyrics from Led Zeppelin’s epic tune “Kashmir.” Since 2013, Salopek’s “Out of Eden” walk for National Geographic is scheduled to take him more than 37,000 kilometers from Africa to the tip of South America… Mimicking both Japan and the US, China has added on average 10 airports a year in the last few decades. From zero high-speed rails in the year 2000, it now has over 40,000 kilometers of it. Other countries have evolved differently. Netherlands is known for its bicycle culture, and Indonesia for its motorbikes. Norway has the highest electric vehicle adoption rate in the world. In Saudi Arabia, nomads can be spotted ferrying camels with pickup trucks. By the time Salopek finishes his journey, he will have witnessed the extremely wide spectrum of mobility available to modern humans. New choices keep growing as old ones persist—it’s and, not or.
In 2018, the German automotive conglomerate Volkswagen announced talks to form a joint venture with Didi Chuxing, China’s biggest ride-hailing service. The partnership would include Volkswagen managing a fleet of around 100,000 cars for Didi, some two-thirds of which would be Volkswagen models. At first glance, this announcement might sound like a major fleet sale for Volkswagen. But Marcus Willand, a partner at MHP, a consulting firm that is part of Porsche (itself part of Volkswagen), saw it differently: “Actually, you could read this transaction as a signal that Volkswagen was slipping back one link in the mobility supply chain, going from major OEM [original equipment manufacturer] to tier-1 supplier.”
Hagen Heubach, global vice president of SAP’s automotive industry business unit, is responsible for leading the entire end-to-end solution portfolio for automotive customers at SAP. His department is responsible for formulating a central strategy and pushing strategic engagements in the automotive space and the future of mobility. Through his customer engagements, he has observed a profound change in attitude: “All our customers—OEMs, truck manufacturers, bike manufacturers, suppliers, national sales companies, mobility providers—are facing a run-and-disrupt scenario. They say ‘Hey, I need to run a very profitable and traditional business, and, at the same time, I need to disrupt myself into this new, sustainable mobility world.’
In the last few years, CASE has become a rallying cry for rapid change in the automotive sector. In this framework, vehicles and mobility are connected, autonomous, shared, and electric. In the discussions for this book, both Willand and Heubach made the case for CASE.
Even if the car manufacturers carefully choose a focus in the CASE space, they must still keep up with evolving regulations and with changes in consumer demand. Electric vehicle sales represented just 9% of all passenger car sales in 2021, so even with rapidly increasing market share, especially in China and Europe, there’s a long way to go fore-mobility. Stellantis CEO Carlos Tavares has lamented that policymakers, in their publicly announced timelines, appear to “not care” whether automakers have enough raw materials (or time) to support the shift to electric vehicles. ExxonMobil CEO Darren Woods said in an interview that their internal scenarios show that every car in the world will be electric by 2040, interestingly without being concerned that Exxon- Mobil’s overall business would suffer significantly. We’re a still long way off from this scenario. One consequence of this slow-motion shift in mobility is that SAP has had to support automotive customers and their business models in multiple dimensions as they gradually transition.
Jörg Ferchow, chief solution manager at SAP, provides an overview of SAP E-Mobility to build, run, and manage such networks. In this model, vendor-independent charging devices would connect to a cloud solution that uses the Open Charge Point Protocol (OCPP) that has become predominantin the market.
In this young but fast-growing market, SAP expects a wide range of partners who build, service, resell, and operate charge points. Even though electric vehicles only make up about 5% of total vehicles on the road in 2022, already a complex ecosystem of players and processes must be navigated and integrated.
Steffen Krautwasser manages SAP’s impressive global vehicle fleet of 27,000 cars, 17,000 of which are in Germany. He explained how the fleet has evolved and how he has been one of the early adopters of the SAP E-Mobility solution… For a single corporate campus, 600 charge points is a quite significant number. Krautwasser assumes he will need 1 charging station for every 5 cars, which means that he has to plan for a setup of 3,500 charging points in 2030. Already this estimate has required elaborate planning and coordination between SAP’s facilities group and its local electric utility. Bolting charge points to garage walls is the smallest issue. Getting the necessary power infrastructure up and running requires detailed planning and sophisticated agreements with utility providers.
As shown in Figure 3.2, making batteries and pushing their performance to new levels involves a wide range of industries such as mining, chemicals, utilities, mill products, and high tech involved in the lifecycle of developing, producing, servicing, and recycling batteries for electric vehicles.
Shared mobility is definitely not a new concept. In some communities, geographic and spatial limitations, coupled with population trends, have resulted in a long history of shared mobility….Augsburg in Bavaria is a university and tourist town an hour’s drive west of Munich. Augsburg is famous for the Fuggerei, the world’s oldest public housing complex still in use, founded in 1521 by the rich Fugger family of merchants. The municipal utility company Stadtwerke Augsburg (swa) supplies electricity, natural gas, district heating (the next generation of “steam heating”), and drinking water for 350,000 people, and it has also expanded into the mobility space, pioneering a flat rate mobility package in 2019. Isabella von Aspern leads digital transformation at swa and spoke about matching mobility offerings with the services demanded by citizens in her community.
(SAP’s Senta Belay) painted the vision for urban mobility scenarios to include the following:
- Car sharing, in which multiple consumers access a single vehicle
- Ride sharing, in which contracted drivers provide rides to individual consumers
- Ride pooling, in which multiple individuals might share a single vehicle in a trip—a more public version of carpooling
- Ride hailing, in which pooling and sharing services are initiated through mobile devices
- Corporate mobility and mobility budgets, in which organizations co-fund their employees’ travel
- Subscription mobility, in which individual consumers pay to access a multi-vehicle fleet that could contain, for example, different types and sizes of vehicles
- Micro-mobility, in which smaller vehicles, such as bicycles and scooters, are available
Roland Vorderwülbecke, director of IT at Gebr. Heinemann, a global operator of the Duty Free & Travel Value shops at airports, described how 2020 delivered shocks to the travel industry due to reduced flight schedules, airport closures, and international travel bans. In 2021, some travel resumed, but waves of reinfections bogged down the business. Even a surge in travel in 2022 brought continued challenges, such as staffing problems at airlines, security, airport baggage, and other operations.
Enter Catena-X, a network specific to the automotive industry designed to create a single uniform data exchange standard along the entire automotive value chain. SAP, BMW, and a number of other major German companies are founders of this partner network. Heubach summarized its goals: “With Catena-X, we’re getting rid of blockages where the players cannot (or don’t want to) talk to each other on the network. We are building an industry business network where SAP can connect to Siemens, SupplyOn, etc., using the same standards. We are opening up rather than trying to be the dominant player, but in exchange we’re getting so much more interaction, so much more traction with the market with these value cases.
A twin of this post will include video excerpts from conversations with many of these executives so you can put a face and voice to those in the book.
Other posts on the other chapters to come.
Book speedwriting?
I asked followers on LinkedIn how they would use 4 months of sabbatical credits like I have accumulated over two decades at Deal Architect. I got plenty of suggestions including this from Andre Blumberg, CIO at Hong Kong based CLP who I have profiled in earlier books
“Four months? You’d write two books, easily.”
Andre is an ultra-marathoner so I am flattered by his standard of speed, but my style of book writing depends on a large number of conversations with executives. I have said often if my voice is more than 10% of a book, I have failed. My blogs, Instagram and other social media is where I share plenty of my voice. In our advisory work, clients get plenty of my voice. But books that I help write are for story telling by innovative executives. And arranging such conversations takes plenty of time.
But surely, having 7 earlier books helps shorten writing time? It does, up to a point.
I recently shared details of two books my team has helped with in the last 18 months – Moment of Service by Darren Roos, CEO of IFS and Business as Unusual by Thomas Saueressig and Peter Maier of SAP.
Moment of Service involved about 50 conversations with IFS, customer and partner executives resulting in 1,000 pages of transcripts, slides and research material and took my team about 4 months. We delivered a draft of 300 pages. The IFS team added their voice and trimmed that total content down to a very readable 200 pages.
Business as Unusual involved about 150 conversations resulting in 2,500 pages of transcripts and other materials and we delivered a first draft of 400 pages. Took us roughly 6 months. SAP and Rheinwerk Publishing added material, trimmed other and ended up with a 300-page book dripping with innovation stories.
So could we have done either much quicker?
Firstly, it absolutely helps to start with a premise and a pool of potential interviewees. Darren Roos had a pretty crisp definition of the Moment of Service theme. IFS had gone through a branding exercise a few months earlier. Most of his customers and partners were comfortable with the concept. Still the logistics of identifying who to interview, arranging the recordings , transcribing them, getting approvals is a labor-intensive process.
The SAP book subject matter was much more complex. It covers 8 “megatrends” - Resilient supply networks, Future of capital and risk, Integrated mobility, Everything-as-a-service, Sustainable energy, Lifelong health, New customer pathways and Circular economy. We were looking for very innovative customers who were pushing the boundaries of low-carbon energy, breakthrough medicine, new financial instruments, differentiated store experiences, new business models etc. We were looking to interview a broad range of specialty research firms and partners beyond SIs. We ended up with strategy firms, Bain and Co and Accenture Strategy, the mobility services firm, MHP which is part of Volkswagen, the industrial robotics firm, Beckhoff, the Advanced Services Group at Aston U and the energy research firm, Det Norske Veritas among others. Frankly, without SAP’s amazing industry and global reach we would have not got that variety with other vendors even if had taken 3x the time.
But hasn’t technology and automation helped make the process speedier? Absolutely, in the data collection process. No way could I have traveled to 35 countries to meet with interviewees especially with pandemic travel restrictions. Zoom and Teams were a massive help. So was being able to listen to the digital files of interviews as if they were podcasts on my walks and via Bluetooth in the car. Helped me decide what to excerpt from each.
Tech has also helped make easier the graphics that IFS and SAP developed for their books. Printing and Distribution has similarly become more efficient. SAP Press is offering the Business as Unusual book through many more booksellers around the world and in more eBook formats
Given all the advances in AI, voice recognition and transcription technology has surprisingly not improved much. We have so many accents, acronyms and jargon in tech world that machines just cannot keep up with Tina, who has transcribed most of my book interviews for the last 5 years. And the SAP book in particular has whole bunch of chemistry, geology. medicine, automotive, banking and other lingo in addition.
Same thing with editing. I like to cite the experience from the Godfather movie. Coppola shot 90 hours of film and delivered a 2-hour version to the studio. The studio asked him for more and the released version was about 3 hours long – still less than 5% of what was filmed! Two of the 6 editors won Oscars for their work. 50 years later, I find editing is still an art form. Good editors are worth their weight in gold.
So 2 books in 4 months? Sorry Andre, like I told you if I was to use 4 months of sabbatical time to write another book, it would be fiction. About an analyst who is in the middle of international intrigue and chaos and saves the world. Jack Ryan if he had stayed an analyst.
If the Mrs. would allow me to spend 4 months looking like this nerd 😊
November 22, 2022 in Industry Commentary | Permalink | Comments (0)