Insights on the Software-Defined Vehicle from Oliver Bahns

Oliver Bahns, SVP of Connected Mobility at T-Systems, delivered an insightful masterclass at the Learning Curves executive summit, sharing his expertise on the challenges and opportunities in the transition to software-defined vehicles (SDVs). His perspective sheds light on how software is redefining the automotive industry and outlines actionable strategies for companies navigating this shift. Below, we delve deeper into his key points and explore their broader implications for IT managers and executives.

A Revolutionary Era in Automotive History

Bahns compared the advent of the SDV to the revolutionary moment when Carl Benz first drove an automobile more than a century ago. The shift from hardware-centric vehicles to software-defined ones marks one of the most transformative changes in the industry. SDVs have the potential to redefine three critical pillars of the automotive business model:

1. Product Evolution: SDVs enable continuous updates, enhancements, and new functionalities throughout a vehicle's lifecycle, transforming the vehicle into a dynamic product.
2. New Revenue Streams: The ability to introduce software-driven services paves the way for subscription models, on-demand features, and other innovative monetization strategies.
3. Enhanced Customer Engagement: SDVs facilitate more personalized and interactive experiences, fundamentally reshaping how customers interact with vehicles.

For IT managers and executives, these transformations highlight the need to rethink the role of technology in product design, business strategy, and customer relationships.

The Four Strategic Initiatives for SDV Success

Bahns identified four foundational initiatives that companies must pursue to successfully transition to SDVs:

1. Decoupling Hardware and Software: Separating hardware development from software allows for greater flexibility and faster innovation cycles. IT leaders must adopt modular architectures and invest in middleware solutions that enable seamless integration across different platforms.
2. Unified Software Lifecycle Management: Standardizing tools and processes across domains ensures consistent development and maintenance practices. This shift demands robust lifecycle management platforms and a commitment to cross-functional collaboration.
3. Automating Development Pipelines: Implementing CI/CD pipelines and feedback loops helps accelerate development while enabling data-driven insights from real-world operations. Automation reduces manual intervention, improves quality, and supports scalability.
4. Service-Oriented Organizations and DevOps: Embracing service-oriented architectures and DevOps principles fosters agility and innovation. Organizations must align their culture, structure, and processes to support this transition.

Key Challenges and Opportunities

Bahns highlighted four critical challenges that IT leaders must address to implement these initiatives effectively:

• From Projects to Products
  Bahns emphasized the need for a product-oriented mindset, replacing traditional project-based approaches. In a product model, organizations focus on long-term roadmaps, iterative development, and adaptability to evolving customer needs.

This shift also requires empowering product teams with end-to-end ownership and decision-making authority. For executives, this means creating an environment where product teams can operate autonomously while aligning with the organization’s strategic goals.

• Productivity Over Capacity
  Simply increasing headcount or outsourcing tasks isn’t a sustainable solution for addressing the growing complexity of automotive software. Instead, organizations must focus on improving productivity through standardization, reuse of existing assets, and advanced productivity tools.

Bahns pointed to a widening gap between the complexity of in-car software and the productivity of development processes. IT managers must tackle this challenge by investing in platforms that enable efficient development, tracking, and continuous improvement.

• Operational Excellence in DevOps
  While DevOps is often discussed, the "Ops" side—ensuring robust operations—is frequently overlooked. Bahns underscored the unique operational demands of SDVs, including managing globally distributed fleets, adhering to regional regulations, and ensuring compatibility across diverse infrastructures.

Automation is key to achieving operational excellence. From deployment pipelines to fleet management systems, IT leaders must prioritize tools and processes that ensure scalability, reliability, and compliance.

• Strategic Sourcing and Partnering
  The decision between building in-house capabilities and partnering with external providers is critical. Bahns argued that most companies lack a clear “make-or-buy” strategy, leading to inefficiencies and complexities.

Executives must evaluate their sourcing strategies based on scalability, cost-efficiency, and alignment with long-term goals. Standardizing non-differentiating functions while focusing internal resources on core competencies can strike the right balance.

Expanding the Ecosystem Mindset

Bahns also highlighted the importance of collaboration within the automotive ecosystem. Developing SDVs requires partnerships across OEMs, suppliers, and tech providers. However, ensuring alignment on product vision and integration across a heterogeneous group of stakeholders remains a challenge.

This calls for:

• Clear Communication Channels: Establishing transparent processes for collaboration across teams and partners.
• Shared Standards: Adopting industry-wide standards to promote interoperability and efficiency.
• Joint Innovation Platforms: Creating environments where stakeholders can co-develop solutions and share insights.

For IT executives, this ecosystem approach provides an opportunity to leverage external expertise while maintaining control over strategic priorities.

The Future of Automotive Software

Bahns concluded by emphasizing the need to embrace existing standards and reusable components. Attempting to build every element from scratch is not only inefficient but also risks overburdening already stretched resources.

In the coming years, IT leaders must prioritize:

• Platform-Based Development: Leveraging modular architectures that allow for rapid customization and deployment.
• AI-Driven Insights: Using advanced analytics to optimize software performance and identify opportunities for improvement.
• Resilient Operations: Building systems that can adapt to evolving regulations, market demands, and technological advancements.

Conclusion

The journey to software-defined vehicles represents both a tremendous opportunity and a significant challenge for the automotive industry. Oliver Bahns' insights serve as a valuable roadmap for IT managers and executives navigating this transformation. By adopting a product-oriented mindset, focusing on productivity, embracing operational excellence, and forging strategic partnerships, companies can position themselves as leaders in this revolutionary era.

The road ahead may be complex, but with the right strategies and tools, the future of automotive software promises to be as exciting as its storied past.

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A Note to Our Readers

This article offers an overview of the key ideas presented by Oliver Bahns during his talk. While we’ve captured the main concepts and innovations he shared, the full scope of his insights and examples is best experienced by watching the entire session. To dive deeper and hear directly from the speaker, we invite you to view the complete presentation. For any questions or further information, feel free to reach out to us.