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.
