BearingPoint helps Continental develop new business model for motorcyclists
Automotive suppliers Continental launched a brand new service for motorcyclists late last year, which helps them to ‘see’ around corners. Leveraging a new cloud-based digital solution, the tire and rubber specialist now provides drivers with advanced information on obstacles, road works and traffic, enabling the enhancement of driving experience as well as road safety. The project was delivered with the support of BearingPoint.
Founded in 1871, Continental is one of the globe’s five largest automotive suppliers today. The company is well-known for its tires for cars, trucks and motors. In addition, Continental develops intelligent technologies for the transport of people and goods for B2B and B2C customers. The Hannover-headquartered firm generates revenues of €39.2 billion, realised by over 212,000 people in 55 countries.
Continental’s Intelligent Transportation Systems (ITS) Business Unit, which connects wireless communication technologies with the Internet of Things (IoT) to create intelligent transport solutions, recently brought a new product to the market for the motorcycle segment. World-wide, motorbike riders face similar challenges when riding, particularly tackling blind bends at high speeds. This not only diminishes their riding experience, but also poses danger to the motorcyclist. Transport for London found that 514 riders were seriously injured, and 36 killed by motorbike accidents in the UK capital alone in 2015,. Motorcyclists often make use of satellite navigation solutions which, along with directional data, can also update on developments such as roadworks, debris and traffic jams – however, news can filter slowly, and does little for real-time riding advice.
Motorcyclists safer on the road
Enter ITS’s latest digital offering for motorcyclists. Building on ‘eHorizon’ – the firm’s already dynamic mapping system, which is already in operation for cars that updates digital maps in real-time – the company released a tailored version specifically for motor drivers. The system harnesses “swarm intelligence”, building on IoT and cloud technologies, to continuously supply the digital map of motorcyclists with accurate and up-to-date information.
The system of swarm intelligence sees data stored and collated before being made instantly available to all other motorcyclists. As a result, the eHorizon system informs bikers in advance of obstacles along their route such as construction zones, accidents, slippery conditions, or traffic jams; information that could enhance the safety, not only of motorcyclists, but also of other road users. After extensive testing, Continental finally launched the service in December 2016 at the annual Consumer Electronics Show in Las Vegas.
The solution was designed and developed with the support of BearingPoint, a rapidly expanding consulting firm aiming for revenues of €1 billion by 2020. The German based automotive company tapped the European consultancy at the very beginning of the transition, with a joint team of both parties working on the strategic contours of the new proposition. They kicked off with identifying the needs for digital services of end consumers – the motorcyclists. A bottom-up analysis was launched, with several Design Thinking workshops organised to glean insights from the motorcyclists themselves. This feedback was used to inform the development of various minimum viable products (a strategy for rapidly creating a prototype to get customer feedback).
Digital Innovation Generator
The outcome was a range of several safety warnings as well as community sharing aspects which motorcyclists desired. The input was subsequently translated into multiple potential services and products, and these were subsequently assessed against more than 150 criteria using BearingPoint’s proprietary Digital Innovation Generator (DIG). This tool uses a tailored, iterative methodology to tackle product service development and business model definition, and concludes with implementation support. Continental began using the DIG by prioritising their innovation efforts through trading-off technical, internal and external perspectives with customer and data aspects, enabling clients to narrow their portfolio down to the ‘best’ options. This helped to determine the five most suitable digital services for motorcyclists.
A Business Model Canvas approach was used to turn the initial ideas into a more structured business model, and following green light for the implementation phase, BearingPoint and Continental partnered to plan and drive execution. A launch strategy and market entry roadmap were developed, and internal resources (teams, budget, etc) were lined up to ensure smooth delivery. Looking back at the digital transformation, Arno Semmelroth, Director of Ideation at Continental, said he was happy. The process has, in his eyes, enabled the firm to bolster their customer experience, while simplifying the B2C process. Just as consumers expect seamless digital solutions from their banks and fashion retailers, they also have the same expectations from their road vehicles – something the eHorizon solution is aimed at giving them.
According to Semmelroth, these advances also had a broader benefit to the firm, “With BearingPoint’s help we were able to rapidly accelerate and professionalise the process of becoming a digital ecosystem.” Through the collaborative process, BearingPoint and Continental ITS laid groundwork for an entirely new, high-growth business model. The project demonstrated how an already supremely successful business can adopt platform technologies with innovative business models in a pragmatic way. Continental ITS was, meanwhile, able to leverage the internal expertise it had accrued over the years with external data sources, in order to serve a much larger group of customers.
Looking back at the successful transformation, Rene Körner, Senior Manager Strategy & Business Development at Continental, highlighted the key role the firm’s approach and tooling played. “BearingPoint’s Digital Innovation Generator considers all relevant facets of a service offering. In this way we were able to reduce learning curves and use a structured framework to convince all participants of our approach,” he said.
Besides adding to the driver experience and generating direct additional profits, this expertise provided the firm with the capabilities to capitalise on future growth opportunities more easily. The experience gained, including the mind-set and the technical know-how, enabled Continental to quickly identify and capture business opportunities in the future. Following the initial implementation of this digital service offering, Continental ITS is now empowered to build additional components onto its business model with minimum risk, for example, by using direct feedback from users for R&D and marketing/sales.
Stefan Penthin, a Partner at BearingPoint, added that he believes the transition could pave the way for a further push into ‘Smart Mobility’ space, dubbed one of the largest opportunities in the automotive space, stating, “As one of the biggest global players in the technology sector, Continental connects their products with impressive speed and will dominate the next generation field ‘Smart Mobility’ in the future.” According to a previous study by BearingPoint, as many as 80% of all vehicles could be digitally connected by 2020.
