3.1 What is not working in the ecosystem? Defusing friction between Previous roundtables have highlighted involved were unable to bridge from stakeholders in the the need for increased cooperation (or OEMs’ hardwired part-buying systems to “co-opetition”) across the ecosystem, subscriptions with multi-year contracts. connectivity ecosystem is with an emphasis on creating a “win-win” Service providers of telematics are also essential. For the moment, environment for all stakeholders — from finding it hard to adapt to this scenario. OEMs to end customers. This roundtable Having grown used to selling connectivity OEMs remain challenged was no different. Discussions included to subscribers, with ROI achieved within by how best to “sell” the new models for relationships, based on one-year windows, they now need to build mutual benefit, whether through revenue- connectivity into products and invest for benefits of connectivity to sharing or closer collaboration between the long term. their dealership networks, suppliers and OEMs at the design and while other value-chain development phase. The objective should The introduction of any connectivity be collaborative creation of embedded program demands huge investment, participants are frustrated hardware that can perform and scale first by OEMs in terms of designing and by OEMs’ unwillingness to across the lifespan of vehicles as well as developing new platforms and integrating from a software perspective and be easily this with their business as well as share customer data. refreshed. developing new services. It also needs OEMs must align their IT operations to substantial investment from telecom the accelerated cycles demanded by app service providers and other providers developers and other suppliers. New throughout the value chain. contractual arrangements are urgently What are the sources of revenues to justify required. For example, insurers could this investment? In a complex, multi-player secure cost-effective access to customer ecosystem, there are multiple answers. data needed to improve pricing and Consumers’ contributions through claims processing by undertaking to subscriptions have yet to take off and channel repairs back to OEMs’ workshops/ relationships with dealership networks dealership networks. need to be reassessed. Insurers can obtain Other barriers to a more effective payback for their investments in data, but connectivity ecosystem include the they need to rethink the basis on which incompatibility of business models they obtain it from OEMs. Above all else, between potential partners. For example, with greater collaboration set to transform participants complained of months being the market, more flexible revenue-sharing wasted in execution because the parties models are urgently needed. “We see a lot of similarities between ecosystems “That’s where you have to tell dealerships to belly up to in the home, in the car and all these other places. the bar now, because we’re giving you all these service And I think what’s going to be needed is fluidity and leads and they are not free.” simplicity.” “It’s a challenge for us, to go in there and do it right “When you’re integrating apps on six-week cycles, and with embedded modules, to cover that cost and keep the IT departments in OEMs are saying we’ll get to the organization patient enough to say, we see the that in four or five months, then you wind up with a long-term benefit.” backlog of apps.” 8 | The quest for telematics 4.0