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Case Study

Leading Global Auto OEM leverages IT Benchmarking Study for Business Transformation

 

TCS analyzed the IT landscape and business processes of a leading auto OEM, benchmarked them against industry best practices, and made recommendations that helped the company identify transformation initiatives to reduce costs and improve efficiency.

The Customer: TCS’ client, a global auto OEM, together with its subsidiaries, engages in the manufacture and sale of commercial and passenger vehicles. The company also provides engineering and automotive solutions; manufacture of automotive vehicle components; and supply chain activities, as well as vehicle financing, machine tools, and factory automation solutions. It offers its products and services through its dealership, sales, services, and spare parts networks, and has a wide marketing network covering 125+ countries.

Business Scenario:
The company embarked upon a journey to improve its market share and to bring out differentiated products to suit the rising customer needs. It launched a business transformation initiative to improve business and operational performance. Recognizing that superior IT capabilities would be crucial to support the business transformation, the company decided to evaluate the business value provided by IT and find out if it was well positioned among its peers on this score. The client also wanted to find ways to improve its current IT systems’ usage and effectiveness.

Why TCS?
TCS was chosen based on its in-depth domain knowledge, long association with the company and the consequent understanding of its systems and processes, as well as for its strong consulting capabilities.

TCS’ Solution: Using TCS’ Enterprise Process Model Framework, based on industry standards like APQC and ISA 95, and our experience in the automotive industry, we compared the company with its global peers. We selected five business functions for this IT benchmarking exercise:

  • Customer experience management
  • Quality
  • Warranty
  • Supply chain
  • Manufacturing

The assessment of IT enablement was scoped into the digitization of business process, process automation through IT, use of IT enabled analytics and the level of adoption of IT by business users.  

During this month-long engagement, our consultants interviewed various stakeholders to understand the current business processes and IT enablement in the company and organized several sessions to gauge what the company’s global automotive peers were doing. This helped us identify gaps and weaknesses in the company’s processes, along with opportunities for improvement.  

We submitted an IT benchmarking report that presented 37 improvement areas across the five functions, addressing various themes such as cost reduction, integrated measurement and control, process adherence and adopting emerging trends to benefit business.  

Some of our key recommendations included the following:

  • Increasing the level of automation and digitization
  • Encouraging better use of IT in an integrated fashion across the value chain, to bridge the quality gap and to track customer issues
  • Improving customer experience through optimal use of the company's CRM
  • Integrating lead sources in the CRM tool, automating campaign planning and introducing next generation solutions such as knowledge management and social media integration

Key Benefits:
Based on our recommendations, the OEM now has a foundation for strategic planning and improved performance. The potential benefits included the following:

  • Reduction in the use of alternative materials in production to one to two percent, aiming for complete elimination
  • Reduction in cost of quality by 10 percent
  • Improvement in supply chain planning and demand forecasting accuracy by 10 percent
  • Reduction of warranty cost by 5 percent
  • Improvement in supply chain visibility, translating into efficient production execution
  • Reduction in part shortage, line disruptions and inventory obsolescence
  • Improvement in lead management by effective tracking
  • Improvement in customer experience and number of repeat customers

The engagement was carried out in close association with the client’s CIO and IT team and received positive feedback from the management for the depth of analysis, speed of the engagement and the quality of our recommendations.