Ashok Leyland: Using BI and AI in the Automotive Industry
| Case Code: ITSY119
Case Length: 17 Pages
Pub Date: 2021
Teaching Note: Available
| Price: Rs.400
Organization: Ashok Leyland Limited
Themes: Artificial Intelligence, Digital Marketplace, Business Intelligence Systems,Big Data Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
Winds of Change
It was in the early 2010s that Leyland began its digital transformation journey. Natarajan believed that Information Technology (IT) was redefining competitive rules in the automotive industry. He observed that previously, auto manufacturing companies had primarily derived revenues from the sale of a product or spare parts or by providing services, with only a small fraction being derived from offering solutions. He stated that the scenario was, however, changing fast and it would be completely different in the near future. Natarajan said, “We see this changing completely in the next 5-10 years where there will be more revenue coming for solutions rather than product and services.” ..
Leyland Built a Data-Driven Culture
Leyland’s IT journey was marked by three phases. In the first phase, it migrated to standard enterprise application platforms like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) from home grown software..
Leyland’s Digital Marketplace
Having implemented digital solutions for improving efficiencies and productivity in phase one, Leyland decided that it needed to start looking at how digital could play a role in generating new revenue models and profits in the next phase. Natarajan explained, “As part of this, we looked at digital not only to improve efficiencies but for building business models, generating additional revenues for us and then using digital for creating additional profit pools.” This decision was a major changeover for Leyland, as it went from doing digital to being digital..
The ‘Digital Nxt’ Platform
Analysts observed that Leyland’s key technology led internal initiatives had strengthened its technology capabilities, particularly in the digital space, which ultimately laid the foundation for it to build and launch the first of a kind Digital Marketplace in the Indian automotive sector..
The Customer Benefits
According to Leyland, these digital transformational initiatives had resulted in a reduction in the Total Cost of Operation (TCO). Leyland’s customers using these digital platforms had achieved substantial cost savings, and on an average, the commercial vehicle maker facilitated 15% overall savings, which included 5-10% of fuel savings and 15% improvement in fleet utilization . Vipin Sondhi, Leyland’s Managing Director and Chief Executive Officer, said, “As a leading player in the commercial vehicle space, our focus has always been to deliver the lowest total cost of operation (TCO) and thereby the highest profit to our customers. Our Digital Nxt Solutions consisting of iAlert 3.0, Uptime Solution Center & AL Care, helps us to deliver on this promise.” .
Natarajan believed that the outputs of using AI must be aligned with business objectives. He added, “This is a very important filter that we have so that we don’t take any digital or AI initiatives just for the sake of it and we have clear cut business goals which we have achieved through each of the use cases.” ..
Exhibit I: Details of the Technologies
Exhibit II: Timeline of Ashok Leyland
Exhibit III: Industry Firsts by Ashok Leyland, in India
Exhibit IV: Ashok Leyland Product Range and Services
Exhibit V: Key Financials of Ashok Leyland Limited
Exhibit VI: SMAC Technologies
Exhibit VII: Customer Benefits of i-Alert 3.0
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