Migrating to SAP S/4 HANA to gain essential automotive insight

As automotive business models and customer expectations evolve, Bodo Philipp explains how SAP S/4HANA migration is giving manufacturers the insight and flexibility needed to shape their future, not just protect efficiency

Successful adoption of new ERP systems such as SAP S/4 HANA and digital transformation will not only enable automotive companies to respond to today’s challenges by improving efficiency and productivity but also provide the data required to better understand how to build a successful future.

Agile operations

Automotive manufacturers have long been lauded for highly efficient manufacturing and logistics processes. But in a fast-changing market, agility is now a priority. New market entrants, a changing sales model, and fundamental technology changes combine to create a new customer driven paradigm that demands faster, dynamic reaction.

While the priority for many organisations’ SAP S/4HANA migration strategy has been adding efficiency to manufacturing and logistics processes, the adoption of modern cloud-based ERP also provides the opportunity to drive additional value from customer data. Automotive is not alone is facing pressure on market share, changing customer perception, even core values, alongside agile and innovative new market entrants. Industries globally face changing customer demands and, in response, tailored customer experience is scaling new heights – from AI led engagement to real-time customised offers and the creation of new routes to market.

For successful brands, this level of personalisation and customer recognition must become part of the automotive buying and, critically, owning process. Customers expect car brands to reflect their needs, whether that is AI driven air conditioning that automatically adjusts to each different driver’s preferences, or seamless integration with social media accounts to enhance the entire journey experience.

Informing change

One of the most pressing issues to address is how to counter the rise in intended vehicle brand defection, up to 56% in the UK in 2025. In addition to understanding and responding to customers’ continually evolving attitudes towards ICE versus Electric Vehicles versus hybrid, the industry must also address changing perceptions of vehicle ownership. While attitudes vary globally, there is a marked shift towards Mobility as a Service (MaaS) over vehicle ownership amongst younger consumers.

The migration from legacy ERP to cloud-based SAP S4 HANA provides the foundation for automotive companies to respond to changing customer behaviours. With a single source of all operational data, automotive manufacturers can leverage powerful analytics to better understand customer expectations and experiences.

This insight can inform the transformation of customer engagement throughout the changing sales model. It can flag opportunities to safely use AI, both within vehicles and throughout the ownership experience. Critically, it can surface information to support complex decisions about future business models and brand direction – such as carving a niche in the luxury car market or being at the forefront of the self-driving market.

Conclusion

In an industry that is enduring change from every direction, future success will require a different approach at every level, from the way brands interact with and engage customers throughout a vehicle’s lifespan to the pace of innovation and the evolution of vehicle sales and finance models. The migration to SAP S/4 HANA is now pressing, given the deadline, but with the right approach, the shift to the cloud-based ERP solution presents an essential opportunity to redefine the automotive industry.

It will enable automotive manufacturers to gain enormous value from highly accurate predictions and forecasts; it will transform agility and offer the chance to drive rather than just respond to customer perceptions. It will introduce new opportunities to leverage AI both to support faster product iteration and improve customer engagement.

Improvements in efficiency and productivity will underpin the business case for migration; but it is the information held within an integrated, end to end ERP system that will play a vital role in creating the foundation for future automotive success.

Bodo Philipp is CEO, MHP Consulting UK.