Cars empower individuals with the freedom to travel at their convenience. The emerging era of electric mobility promises to maintain this independence while offering ecological advantages. Yet, this transition relies significantly on space technology, particularly in the realm of software connectivity.
“Space technology and the automotive sector have shared a close relationship for many years. Progress in space technology has played a pivotal role in driving enhancements in our terrestrial vehicles,” noted Ulrich Hermann, General Partner and Board Member at Einstein Industries Ventures, an affiliate of the European Space Agency (ESA), in a conversation with SAPVoice featured on Forbes.
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“Space presents formidable challenges, requiring the use of durable, lightweight materials like airbags, originally designed for space travel and now adapted for automotive use. The exploration of space has also given rise to groundbreaking technologies such as the Global Positioning System (GPS), transforming navigation on Earth.
After four decades of evolution, the space industry is poised to play a significant role in the automotive sector, arriving at a crucial moment. Ulrich Hermann emphasized, ‘The automotive industry, a $3 trillion enterprise supporting 13 million jobs in the EU, is currently facing considerable risks.’
The European automotive sector, responsible for one-fifth of global car production, has enjoyed sustained success, contributing €140 billion in annual revenue and €375 billion in taxes to EU governments. It stands as Europe’s leading investor in research and development, channeling €59 billion annually.
Despite these achievements, there is no time for complacency.
A Narrative of Change
“Europe Faces Urgent Response to Global Shifts: China Dominates Electric Vehicle Market, Calls for Industry Evolution. China currently holds a 60% market share in global passenger car electric vehicle sales, with a significant surge in greenfield investment, up by 53% to €4.2 billion in 2022. The nation’s ambitious five-year plan aims for complete Vehicle-to-Everything (V2X) communication coverage by 2025.
This global landscape is propelling the industry to swiftly transition towards a new model centered on delivering services related to mobility, autonomy, and connectivity, according to Hermann. He emphasizes the need for Europe to invest an additional $1 trillion to secure the industry’s future.
Hermann further outlines the stages of autonomy, ranging from no automation to partial and high automation, culminating in full automation where human involvement becomes obsolete. Describing this level as disruptive, he envisions cars with their own will, devoid of steering wheels or pedals, capable of performing tasks as proficiently as experienced human drivers. However, achieving full autonomy will take at least another 15 years and is contingent upon advancements in satellite technology.”
Progressing Toward Complete Autonomy
“Hermann emphasized, ‘Profitability in the future will be driven by software-based services.’ In the upcoming model, individuals and businesses will subscribe to services featuring fully automated vehicles readily available to transport them to their destinations. This allows users to utilize their time for work or entertainment.
The functionality of autonomous cars is facilitated by a combination of sensors, algorithms, machine learning systems, and robust processors, all governed by software. Sensors and radars map the vehicle’s surroundings, continuously monitoring nearby objects, while cameras provide a comprehensive view, potentially rendering traditional traffic signals and signs obsolete. Actuators assume control over acceleration, steering, and braking.
For software-defined vehicles to operate at full capacity, 100% connectivity is essential. To ensure complete safety and full autonomy, these vehicles cannot rely on a single point of connectivity; they necessitate a network. Unlike cellular or mobile networks, which may face limitations outside populated areas or be susceptible to congestion or outages, a connection to a satellite network guarantees continuous coverage, eliminating the risk of the vehicle being out of range.”
“The extensive process generates vast volumes of data, presenting a central challenge in the ongoing transformation. As SAP undergoes a transition to the cloud, it is establishing platforms to interconnect the digital twins of previously isolated analog entities and their processes. This initiative supports the shift from a mechanical, analog, and disjointed driving experience to a fully digital, connected one, underpinned by AI and an extensive ecosystem of applications.
Torsten Welte, Global VP for Aerospace & Defense at SAP, remarked, ‘This is a notable illustration of the transformation unfolding across nearly every sector.’ According to Welte, businesses are poised to leverage increased satellite data to enhance their operations and decision-making processes, particularly in logistics, manufacturing, and ESG reporting.
Welte emphasized the crucial role of integrating data and providing a unified data model for future AI models. Tools such as SAP Business Technology Platform and SAP Datasphere are specifically designed to empower IT organizations in efficiently expanding these capabilities for the benefit of the business.”
Navigating the Divide
Ulrich Hermann and the team at Einstein Industries Ventures emphasize that the emerging automotive industry is undeniably dependent on space technology. Hermann explains, “We are now entering a new era called the economy of things, which seamlessly integrates space technology, smart cities, clean energy, ecological cars, and software industries.”
The primary concern is that European players in both the space and automotive sectors have begun to evolve but still lack the essential core capabilities. In contrast, the US automotive and space ecosystem is already a decade ahead, benefiting from significant investments and the emergence of new, risk-taking entities.
Hermann concludes, “Space is a costly endeavor, and the EU needs a long-term vision to stimulate the development of its space industry.” The collaboration between European politics, the automotive industry, and the space ecosystem is crucial.
Once aligned, they stand to gain economic benefits across various sectors. Additionally, Europe will experience the advantages of decarbonization as clean, electrified modes of transportation replace outdated, fossil fuel-driven vehicles.
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With an emphasis on revenue growth identified as the primary goal in the research, 41% of midsize financial institutions surveyed are directing their efforts toward cultivating a workforce of “customer-centric employees” to establish a more competitive differentiation.
The findings from IDC highlight a wider industry trend, showcasing the financial sector’s inclination to adapt to the continuously changing economic landscape and align business strategies with the evolving dynamics of global markets. Notably, more successful banks are taking an additional step by reassessing their core technology framework to elevate the customer experience and ensure long-term resilience throughout their ecosystem.
Preparing Midsize Banks for the Future
In order to attract and retain customers, banks need to provide their employees with cutting-edge digital tools and a user experience that fosters engagement, growth, and satisfaction in every customer interaction. This enables employees to actively contribute to process improvement, make informed decisions, and deliver relevant products and services.
Banks that operate within a secure and agile cloud environment gain immediate access to transformative technologies, including generative, machine learning, and predictive analytics. This access empowers organizations to responsively develop new business models in the cloud, aligning with evolving banking requirements and expectations while avoiding disruptions, improving efficiency, funding innovation, transforming mission-critical systems, and mitigating risks.
Consider the example of AstroBank Public Company Limited, a midsize bank that recognized the opportunity to enhance its accounting system for better support of its growth. The bank successfully constructed a tightly integrated, next-generation ERP landscape in the cloud, marking a significant digital transformation. This initiative has enabled the bank’s workforce of approximately 450 employees to streamline accounting processes, ensure compliance, and elevate financial operations, resulting in improved productivity, speed, and innovation.
The ongoing transformation journey has yielded substantial structural improvements, including:
- A remarkable 3,000% reduction in financial closing time.
- A 30% decrease in the cost of managing financial operations.
- A 30% increase in productivity, with expectations for a 50% further boost.
According to IDC research, AstroBank is part of a broader trend in reframing core ERP systems in the cloud. Surveys indicate that over 98% of financial institutions globally have already adopted cloud technology for at least one or two workloads, with many aiming to adopt a “cloud-first” approach in the future. Notably, 39% of institutions currently using on-premise ERPs plan to transition these platforms to the cloud within the next 12 months.
The adoption of cloud ERP enables banks to fully meet customer needs and expectations by facilitating smoother connectivity, data-driven intelligence, operational effectiveness, financial insight, and risk control. This shift empowers growth-focused banks to establish a comprehensive platform offering banking and related nonbanking services – ranging from simple after-sales services to complex outcome-as-a-service models and data monetization.
Furthermore, critical workloads such as payments, core processes, and insurance systems are increasingly migrating to the cloud. This strategic approach enables banks to move beyond traditional financial reporting and profit-and-loss analyses, leveraging advanced data analytics to gain deeper insights and plan more strategically.
“The Onset of Enduring Customer Outcomes”
As indicated in IDC’s research and demonstrated by AstroBank’s journey, cloud technology is swiftly becoming an integral component of financial institutions’ strategies for 2024 and beyond. This widespread adoption signifies a collective acknowledgment of the technology’s capacity to fulfill customer expectations, enhance operational effectiveness, and open up new avenues for growth.
As the industry progressively embraces cloud-first approaches, the integration of the latest innovations and strategic planning emerges as a pivotal foundation for midsize banks. This holds particular significance for midsize banks aiming not only to withstand but also to flourish in an era characterized by continual change and escalating competition.
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