The continuous growth of the automotive industry presents significant challenges for automotive manufacturing companies, particularly in terms of energy efficiency and supply chain optimization. Efficient systems play a crucial role in addressing these challenges by streamlining processes, enhancing operational effectiveness, and promoting sustainability.
In this context, the role of custom front-ends and expert collaboration becomes paramount. Integrating and leveraging systems such as Vehicle Management Systems (VMS) to facilitate seamless communication between importers, manufacturers, dealers, and direct customers is essential for developing responsive front-end solutions tailored to unique business needs. Understanding best practices for database creation in the automotive industry and harnessing VMS-supported processes are key components in this endeavor, enabling businesses to promote agility and competitiveness in the market.
Vehicle Management Systems (VMS) serve as a pivotal system for importers in the automotive industry, occupying a central role in the ordering and sales processes. For instance, companies utilize VMS to place orders for their cars and seamlessly manage the subsequent distribution to dealers and direct customers. The implementation of VMS introduces streamlined processes specific to the automotive sector, addressing complexities previously managed through extensive customizations within existing systems like SAP. As one of the world’s largest car manufacturers, adoption of VMS exemplifies the industry’s shift towards systems tailored to its unique requirements, marking a significant advancement in operational efficiency and adaptability.
The automotive industry’s demand for custom front-end systems arises from the limitations associated with off-the-shelf front-end solutions. These ready-made systems, while convenient, often lack the flexibility and tailored functionality required to drive business growth effectively. Custom front-ends are highly relevant, especially during the transition to the agency model and for online car sales. It is especially important in formulating the purchase path and creating user-friendly car configurators.
Ready-made front-end systems, although widely used, present several limitations:
#1 Generic User Experience: Off-the-shelf solutions may provide a generic user experience that fails to differentiate a brand from its competitors.
#2 Limited business adaptability: These systems may not adapt well to the unique operational requirements of individual businesses, leading to constraints in customization and integration with existing processes.
#3 Constraints on integration: Ready-made front-end systems might pose challenges when integrating with existing enterprise systems, potentially hampering operational efficiency.
Custom front-end development can address these limitations and propel business expansion by catering to specific business needs, integrating seamlessly with existing backend systems, and delivering a unique user experience that aligns with the brand’s identity. Here’s how custom frontend development proves to be a good idea in various scenarios:
#1 Unique User Experience (UX) required: Custom frontend development empowers businesses to create a distinctive and tailored user experience, setting them apart from competitors. This approach allows the design of interfaces exactly as envisioned, without being confined to the restrictions of pre-made templates.
#2 Specific business needs: Every business has unique operational requirements, and custom frontend development enables the construction of systems that fit the specific business model, seamlessly integrate with backend systems, and cater to distinct operational needs.
#3 Integration with existing systems: For businesses with established backend systems requiring seamless integration into the front-end, a custom solution provides a smoother integration process compared to ready-made systems.
#4 Brand consistency: Custom frontends uphold brand consistency across all user touchpoints by incorporating the brand’s color scheme, logo, typography, and other elements into the design, thus creating a cohesive brand image.
#5 Advanced features and functionality: In cases where websites or applications demand advanced features or complex functionality not available in standard platforms or templates, custom frontend development becomes indispensable.
When considering custom frontend development, it’s crucial to remember that it presents numerous benefits but also demands a substantial investment of time, resources, and budget. Therefore, it’s essential to thoroughly assess your business needs, growth plans, and budget constraints before committing to this approach. Careful consideration of these factors will help ensure that the decision aligns with your long-term business objectives and sets the stage for successful implementation.
The implementation of SAP Vehicle Management System (VMS) by one of the automotive industry companies represents a strategic initiative aimed at enhancing operational efficiency and standardization across its business processes. This endeavor is particularly noteworthy for several reasons, highlighting the transformative potential of integrating advanced ERP solutions within the automotive industry.
A leading automotive manufacturer’s adoption of SAP VMS highlights a strategic move towards embracing standardized SAP procedures and frameworks. The organization is intent on reducing customizations that stray from SAP’s established guidelines, thus ensuring system integrity and compatibility. By concentrating on “exits” – approved extensions of SAP – the company skillfully balances the need for business-specific customization with the necessity to adhere to SAP standards. This strategy helps in minimizing the risks linked to unauthorized modifications that could jeopardize system stability and the viability of future upgrades. Any automotive company can benefit from such a solution.
At the heart of VMS implementation is the “Car” object, a pivotal element that encapsulates the vehicle’s entire lifecycle – from configuration and purchase to sale. This object-oriented approach facilitates a cohesive and streamlined process, allowing for a consolidated view of the vehicle’s status across various logistical stages. Whether it’s tracking the progression from manufacturing to delivery or navigating the complex logistics of international transport, the “Car” object serves as a central reference point, ensuring clarity and control.
One of the key advantages of implementing SAP VMS is the ability to visualize the entire vehicle management process on a single screen. This enhanced visibility into the vehicle’s status at any given point in the transportation chain represents a significant leap forward in operational efficiency. Moreover, it addresses previous challenges associated with managing these processes through bespoke extensions, which often led to system clutter and inefficiency.
Perhaps the most ambitious aspect of the project is the synchronization of business processes across its brands and regions. By harmonizing these processes, the company aims to eliminate redundancies and inconsistencies, fostering a more unified and efficient operational framework. This strategic alignment not only enhances internal efficiencies but also ensures a consistent and high-quality customer experience across different markets and product lines.
A trend within the automotive industry towards digital transformation and process optimization is evident. The emphasis on standardization, process synchronization, and enhanced visibility has the potential to set new benchmarks for operational excellence. As other players in the industry observe automotive giants journey, it may inspire similar moves towards leveraging ERP solutions like SAP VMS to address complex logistical and operational challenges.
In today’s rapidly evolving automotive industry, efficiency and agility are paramount. Companies are increasingly turning to sophisticated Enterprise Resource Planning (ERP) systems such as SAP Vehicle Management System (VMS) and other components of the SAP ecosystem to streamline operations and enhance productivity. This shift towards digital transformation is not just about adopting new technologies; it’s about reimagining business processes to meet the demands of the future. In this context, third-party companies play a critical role in unlocking the full potential of these systems, offering specialized expertise and tailored solutions that drive meaningful results.
The strategic importance of SAP VMS
SAP VMS stands as a cornerstone technology for the automotive sector, offering an integrated solution designed to manage the entire lifecycle of a vehicle from manufacturing through sales and after-sales services. It addresses the unique challenges of vehicle management, including inventory, logistics, and customer service, providing a holistic view of operations that can significantly enhance efficiency and reduce costs. The benefits of implementing SAP VMS are clear: streamlined processes, improved visibility into operations, and enhanced decision-making capabilities.
The role of third-party companies
While the advantages of SAP VMS and other SAP systems are evident, maximizing their potential often requires specialized knowledge and skills. This is where third-party companies come into play. These organizations bring a wealth of experience in SAP implementations, offering services that range from initial setup and customization to ongoing support and training. They understand the nuances of SAP systems and can tailor them to fit the specific needs of businesses within the automotive industry and beyond.
We know VMS and all the processes inside to can use VMS as a backend to create custom applications. We offer certification programs in SAP VMS, ensuring that professionals have the skills required to navigate and optimize the system. You can read more about our expertise in this case study: here.
Beyond VMS: The SAP ecosystem
The value of SAP extends beyond VMS, encompassing a wide range of solutions tailored to various aspects of business operations. From SAP Ariba for procurement and supply chain collaboration to SAP HANA for advanced analytics, the SAP ecosystem offers tools that can transform every facet of a business. Third-party companies not only assist in implementing these individual solutions but also help integrate them into a cohesive system that maximizes efficiency and drives innovation.
For example, leveraging SAP Ariba Upstream can significantly enhance supplier discovery and onboarding processes, making procurement operations more efficient and cost-effective. Meanwhile, SAP’s cloud computing vision, powered by SAP HANA, enables businesses to scale and adapt to changing market conditions with agility and precision.
In an era where business complexities are on the rise, the selection of a third-party company for partnership becomes a strategic decision that can significantly impact the operational success and competitive edge of an organization. The competencies of these third-party companies are critical, as they determine the quality of services, the level of innovation, and the efficiency improvements they can bring to the table. This detailed look explores the essential competencies required of a third-party company and discusses the benefits of partnering with entities that possess deep industry knowledge and expertise.
#1 Proven track record and industry references: A third-party company should have a solid history of successful projects and satisfied clients. References from within the industry act as a testament to their reliability and the quality of their work.
#2 Scalability: The ability to scale services according to the growing needs of the business is crucial. A third-party that can grow with your business ensures continuity and supports long-term strategies.
#3 Specialized industry knowledge: Deep understanding of the specific industry allows a third-party to provide tailored solutions that are more effective. This knowledge includes not just the technical aspects but also regulatory compliance, market trends, and customer expectations.
#4 Technological expertise: In today’s digital age, a third-party company must be adept in leveraging technology to optimize processes, improve efficiency, and drive innovation.
#5 Cultural fit: Alignment in organizational culture and values facilitates smoother collaboration and communication, ensuring that projects progress seamlessly.
#6 Reputation and reliability: The reputation of a third-party speaks volumes about their competency and reliability. It’s important to consider feedback from past and current clients to gauge their dependability.
#7 Strategic problem-solving skills: Challenges will inevitably arise, and the ability of a third-party to think strategically and solve problems can make a significant difference in the outcomes of a partnership.
#8 Flexibility and sdaptability: The business environment is constantly evolving. A competent third-party company should be flexible and able to adapt their strategies and solutions as market conditions change.
Partnering with a third-party company that possesses the above competencies brings numerous benefits to an organization:
#1 Enhanced efficiency: With specialized knowledge and expertise, third-party companies can streamline operations, reducing costs and improving productivity.
#2 Access to innovation: Third-parties often bring fresh perspectives and innovative solutions that can give businesses a competitive advantage.
#3 Focus on core competencies: Outsourcing non-core activities allows an organization to focus on its core competencies, driving growth and excellence in areas that matter most.
#4 Risk mitigation: A competent third-party with industry knowledge can help navigate regulatory compliance issues and minimize risks associated with market volatility and technological changes.
#5 Time-to-market: Leveraging the expertise and resources of a third-party can accelerate project timelines, enabling faster product launches and quicker responses to market opportunities.
Choosing the right third-party company involves a careful evaluation of their competencies, particularly their industry knowledge and expertise. By partnering with a third-party that aligns with these criteria, organizations can unlock significant value, driving efficiency, innovation, and competitive advantage in their operations.
The automotive industry is undergoing a significant transformation as it shifts towards the agency model, a paradigm that emphasizes direct sales and customer-centric strategies. This model represents a departure from traditional dealership-driven sales, placing Original Equipment Manufacturers (OEMs) at the forefront of the customer sales process. Through this transition, OEMs aim to gain more control over pricing, enhance transparency, and streamline the purchasing experience for consumers. Sources such as Capgemini and McKinsey highlight the importance of customer centricity and personalization in this new landscape, underscoring the need for innovative approaches to attract and retain customers.
The agency model redefines how cars are sold, with manufacturers setting fixed prices and selling directly to consumers, bypassing traditional dealership markups and haggling processes. This shift, as outlined by sources like BCG and Sopra Banking, necessitates a reevaluation of the roles and revenue models for dealerships and distributors. They will need to adapt to a reality where their primary functions revolve around vehicle servicing, maintenance, and providing exceptional customer experiences, rather than sales margins.
In an era dominated by digital interactions, custom front-end systems emerge as vital tools for OEMs and distributors to engage with their customers effectively. These systems, which include websites, mobile apps, and digital showrooms, serve as the primary touchpoints between automotive brands and consumers. By offering personalized and user-friendly experiences, these platforms can significantly enhance customer satisfaction and loyalty.
Personalization at scale
Leveraging data analytics and AI, OEMs can offer personalized recommendations and services through their digital platforms. For example, a custom front-end system can suggest vehicles based on a customer’s browsing history or preferences, similar to the personalization strategies discussed by McKinsey.
Seamless customer journeys
Integrating various digital touchpoints, custom front-end systems can create a seamless journey for customers, from initial research to post-purchase support. This approach aligns with the emphasis on serving rather than selling, as highlighted by MSXI.
Direct feedback channels
Custom front-end platforms provide OEMs with direct channels to gather customer feedback, allowing for continuous improvement of products and services. This real-time interaction fosters a deeper connection between brands and consumers.
Enhanced transparency and trust
By controlling the sales process and information dissemination through their digital platforms, OEMs can ensure accuracy and transparency in pricing and product details, building trust with consumers.
Agility and adaptability
With decoupled front-end architectures, as mentioned by Inviqa, OEMs can rapidly update their digital interfaces to respond to market trends, regulatory changes, or consumer preferences without overhauling their entire IT infrastructure.
The shift towards the agency model in the automotive industry represents a fundamental change in how vehicles are sold and how OEMs interact with their customers. By investing in custom front-end systems, OEMs and distributors can not only navigate this transformation successfully but also create meaningful, lasting relationships with consumers in the digital age. This strategic focus on digital engagement and personalization is key to winning and retaining customers in a market that is increasingly competitive and customer-focused.
As we’ve explored, the automotive industry is at a pivotal juncture, with the shift towards an agency model and the increasing emphasis on digital engagement reshaping the landscape. Central to navigating this transformation successfully are custom front-end systems and expert collaboration. These elements are not just enhancements but fundamental components that can drive growth and sustainability in the evolving automotive market.
Custom front-end systems serve as the digital face of automotive brands, offering personalized, seamless experiences that cater to the modern consumer’s expectations. Their importance cannot be overstated; they are the vehicles through which customers interact with OEMs and distributors, making the first impressions, facilitating research and purchases, and fostering long-term loyalty. By leveraging data analytics, AI, and cutting-edge web technologies, these platforms can offer a level of personalization and convenience that traditional sales models cannot match.
Expert collaboration, on the other hand, brings together the technical, marketing, and industry-specific knowledge necessary to design, implement, and optimize these digital systems. It involves a synergy between automotive professionals, digital transformation experts, and customer experience specialists. This collaboration ensures that the implemented solutions are not only technologically advanced but also deeply aligned with the automotive industry’s unique challenges and opportunities.
The integration of custom front-end systems, powered by expert collaboration, is a potent formula for growth in the automotive industry. Whether companies are fully transitioning to an agency model or simply seeking to upgrade their existing digital infrastructure, custom front-end solutions remove the limitations that have traditionally constrained business expansion and customer engagement.
In an agency model, these platforms enable direct sales, transparent pricing, and enhanced customer relationships, aligning with the evolving expectations of consumers who prefer online shopping and personalized experiences. For businesses not fully transitioning but upgrading, custom front-ends still offer significant advantages, such as improved lead generation, conversion rates, and customer satisfaction.
Ultimately, the journey towards digital transformation and customer-centricity, facilitated by custom front-end systems and expert collaboration, is not just about keeping pace with industry trends. It’s about seizing the opportunity to redefine what it means to sell cars in the 21st century, creating a more transparent, efficient, and enjoyable buying process for consumers. In doing so, automotive companies can unlock new avenues for growth, resilience, and competitive advantage in an increasingly digital world.
Whether moving to an agency model or pursuing an upgrade, investing in a custom front-end system is a strategic decision that can dismantle the limitations of traditional business models. It paves the way for a future where growth is driven by an unwavering commitment to meeting and exceeding the digital-first expectations of today’s consumers.
After carefully evaluating suppliers, we decided to try a new approach and start working with a near-shore software house. Cooperation with Hicron Software House was something different, and it turned out to be a great success that brought added value to our company.
With HICRON’s creative ideas and fresh perspective, we reached a new level of our core platform and achieved our business goals.
Many thanks for what you did so far; we are looking forward to more in future!
Hicron is a partner who has provided excellent software development services. Their talented software engineers have a strong focus on collaboration and quality. They have helped us in achieving our goals across our cloud platforms at a good pace, without compromising on the quality of our services. Our partnership is professional and solution-focused!
The IT system supporting the work of retail outlets is the foundation of our business. The ability to optimize and adapt it to the needs of all entities in the PSA Group is of strategic importance and we consider it a step into the future. This project is a huge challenge: not only for us in terms of organization, but also for our partners – including Hicron – in terms of adapting the system to the needs and business models of PSA. Cooperation with Hicron consultants, taking into account their competences in the field of programming and processes specific to the automotive sector, gave us many reasons to be satisfied.
