Financial Daily from THE HINDU group of publications
Thursday, Mar 28, 2002
Logistics - Information Technology
Enhancing the joy of use
M. J. Xavier
AFTER the quality revolution of the '80s, products are becoming increasingly similar, forcing companies to look for new avenues of potential differentiation. Most cars look alike as they are assembled from standard components sourced from the same set of vendors. Hence auto makers in the US have gone a step further in adopting technologies such as telematics to maximise the `Joy of Use' throughout the product use cycle.
In order to understand telematics, consider the following scenarios that are feasible in the not too distant future: You have more than a quarter-tank of fuel left, but your engine is nearly a quart low on oil. Your car checks on fuel prices at five gas stations within two miles of your present location. It reports the prices, reminds you that your engine needs oil right away, and presents a video display showing where each station is located. It also notes that one station is having a special on oil changes and could do the work immediately if you stop in now.
When it's time for a tune-up, your car contacts your dealership's service department automatically, checks for available times and, after comparing possible appointments with the personal schedule in your handheld organizer, offers you three dates.
It also canvasses other area dealerships and alerts you if one is offering a better rate. When you select a preferred date, your car downloads the information into your organiser and begins reminding you two days before the appointment.
Or, look at this scenario. You and several friends are driving separately to a dinner spot. But plans suddenly change and you need a new venue that can handle your group of 10 an hour from now. Your car checks availability at six restaurants within 10 miles, reports that two could handle your group, and lets you confirm the reservation.
Then it contacts your friends and supplies each with individualised audio driving instructions to the new meeting spot from each of their present locations.
The technology exists now to make these and many other conveniences a reality. Drivers whose cars are equipped with OnStar, the onboard information service launched by General Motors Corp., are getting a good taste of the potential of telematics with OnStar's new Virtual Advisor service.
It offers customers a growing menu of voice-activated services that includes the ability to trade stocks, get news bulletins, have e-mail messages read, and get updates on everything from tonight's TV listings to celebrity gossip. The typical services offered by On Star are given below.
Automatic Notification of Air Bag Deployment: If a vehicle's air bag deploys, an emergency signal automatically is sent to the OnStar Center. An advisor will attempt to communicate with the vehicle's occupants. If there is no response, or if the car's occupants report an emergency, the advisor will determine the exact location of the vehicle using GPS and will contact the appropriate nearest emergency services provider.
Emergency Services: In an emergency, the driver simply touches the emergency services button and an OnStar advisor locates the vehicle's position on a digital map and alerts the nearest emergency services provider.
Stolen Vehicle Tracking: If a subscriber calls the OnStar Center to report a vehicle stolen, the advisor can send a signal to the vehicle, get its location and begin tracking the vehicle. The advisor will give the location information to the nearest police authority.
Remote Diagnostics: If a warning light flashes on the vehicle's instrument panel, the driver can contact the OnStar Center and an advisor can send a signal to the vehicle asking for the status of the engine computer. The vehicle transmits any problem codes and, based on this information, the advisor recommends the required action, which could include turning off the car and waiting for roadside assistance, scheduling a service appointment as quickly as possible, or getting the problem checked during the next scheduled maintenance visit.
Remote Door Unlock: If the driver locks his or her keys in the vehicle, a call to a toll-free number connects the driver to the OnStar Center. After obtaining accurate security information from the caller, an advisor will send a cellular data call to the vehicle that instructs it to unlock itself at a specified time.
OnStar Med-Net: Personal information such as physician's name or important medical facts can be stored and provided to a hospital emergency room in the event of a serious accident.
AccidentAssist: An OnStar advisor can provide step-by-step guidance after a minor traffic incident. OnStar will notify an insurance company of an accident, as well as provide a checklist of what information is needed to file a police report, or to speed an insurance claim.
Routing and Location Assistance: When the driver places a call to the OnStar Center to request assistance, the advisor pinpoints the vehicle's location and provides voice routing navigation assistance, including helping to find an alternate route if the driver is caught in traffic.
Information/Convenience Services: An OnStar advisor can offer a wide range of information and convenience services, from suggesting a restaurant to making hotel reservations. The advisor, using a five-million listing database, can give location information, such as banks, movie theatres, shopping malls, museums, camp sites and so on to the driver.
Concierge Services: OnStar Concierge takes convenience to a new level, offering subscribers vacation planning, business assistance or tickets to hard-to-get events. A Concierge advisor is specially trained and connected to an organisation that is affiliated with hotels, restaurants, entertainment companies and other service providers around the world.
OnStar Personal Calling allows subscribers to use speech recognition technology to place hands-free, voice-activated calls on a nationwide wireless network in cooperation with Verizon Wireless. The microphone is embedded in the vehicle, and conversation is heard through the sound system speakers.
OnStar Virtual Advisor enables subscribers to access personalised Internet-based information such as e-mail, stock quotes, sports reports, news and weather in a hands-free, voice-activated manner while they are on the road. This information is delivered through the vehicle sound system speakers to help drivers keep their hands on the wheel and eyes on the road. OnStar uses the Global Positioning System (GPS) satellite network and cellular technology to link a driver and vehicle to the OnStar Center, where advisors can deliver real-time, personal help 24 hours a day, 365 days a year.
Telematics for cars
Other automakers are beginning to add similar capabilities to such telematics services as Ford's RESCU and Mercedes-Benz's Tele-Aid. Developed with Vodafone, Ford Telematics has been made available on Ford Focus and Ford Mondeo models from December 2001. Offering remote operator service, traffic information, emergency and roadside assistance, plus voice-activated cellular phone, Ford Telematics is available as a factory-fitted option and is integrated into each vehicle's audio unit. It can be combined with a range of audio and navigation systems on both Focus and Mondeo.
To activate the Ford Telematics services, drivers press the `menu' button on the radio, and then push the appropriate service button under the display. Ford Telematics services are then charged by the minute (with telephone calls charged as per the customer's chosen Vodafone price plan).
Ease of use and minimal distraction are key factors of Ford Telematics. There are four services, accessed via four simple function buttons incorporated into the audio system bezel:
Emergency (S0S) button: It connects the driver to the Emergency Services Operator who can summon help. Airbag deployment as the result of an accident automatically connects to the operator and if the driver is unable to respond, the operator will advise the Emergency Services of the activation and the vehicle's position. This service is free.
Operator (i) button: It connects to a remote operator for advice on places of interest or other useful destinations such as hotels, petrol stations or supermarkets. The driver can also be given personalised route and traffic advice, or be connected to roadside assistance services.
Traffic (T) button: It connects to `real time' local traffic information, spoken so the driver doesn't have to take his or her eyes off the road.
Communication button: This is for access to an integrated cellular phone for hands-free, voice activated phone calls. Drivers simply utter a name from their personal contacts book, where up to 100 names/numbers can be stored, or speak the number. Call costs depend on the customer's chosen Vodafone price plan.
IBM's Internet-based remote diagnostic and call centre solution for Peugeot is another good example of telematics used by auto companies. IBM France, IBM Germany and the global IBM Call Centre in Europe have joined forces to provide expert assistance in 20 languages to all Peugeot service centres worldwide, with systematic remote control of a vehicle in a Peugeot facility anywhere in the world. The solution's major advantage is the way it centralises the technician expertise and offers global IBM call centre services to all Peugeot service technicians worldwide in their native language.
All these point to the fact that the rules of the business game are getting re-written with the advent of new technologies like telematics. Traditionally companies had no role to play during the product usage phase. Companies that managed to offer quality products at reasonable prices had a fair chance of success in the market place. However, the expectation today is that companies hold the customer's hand and enhance the joy of its use.
The marketing implications are fairly large. First of all, it makes business sense to offer these post-purchase services as companies earn more money throughout the life cycle of the product apart from the profits earned through the sale of a product. The additional revenue earned through collaborative commerce with hotels, restaurants, entertainment companies and so on can be used to cross-subsidise the products and services offered by a firm.
Additionally, the valuable data that is generated by being in touch with the customers can be used to improve the quality, reliability and usefulness of the products and to develop new product and service offerings. Moreover, the same data can be used to customise the products when the customers come back for repeat purchase. For example, a driver habituated to keeping a leg on the clutch while driving may be given a car fitted with extra reinforcement on the clutch; a typical city driver may get modifications in his car very different from a highways' user; and so on. These technologies help companies build a closer relationship with the customers throughout the life cycle of the product and build loyalty and customer franchise.
This is something that the Tatas, Mahindras and the Marutis will have to adopt to retain their customer in the face of stiff competition from global companies. With the cost of technologies coming down, it may be possible to even track bicycles, refrigerators and a number of medium-priced consumer durables and offer proactive advice and service to the customers. Are these companies listening?
(The author is Dean, Academy for Management Excellence, Chennai.)
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