Mitch Javidi, Ph.D.

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Automotive Data Vision Update MIS 2006 FALL
CONFERENCE
Mitch Javidi, Ph.D. CEO President
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Todays Agenda

• Part 1 This Morning
• Aftermarket Data Vision Update
• QA/Discussion
• Part 2 This Afternoon
• MIS 2006 Participants Survey Results
• Focus Discussions
• QA/Discussion

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Aftermarket Data Vision Update
Research Summary
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Background

• In 2005, Aftermarket Data Vision (ADV)
  commissioned The Catevo Group (previously Digiton
  Corporation) to
• Undertake a feasibility study to determine the
  standards and requirements for creating an
  industry product data repository and distribution
  system.

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Report Purpose

• Results and findings of an industry wide survey,
  along with synopsis of interviews, and focus
  group sessions with key industry stake holders to
  assess the needs and feasibility for this
  initiative.
• An overview of similar endeavors and adopted
  solutions by organization in other industries.
• A proposed set of strategies with financial
  benchmarks to serve as a possible guideline for
  ADV post this study.

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Top 3 Findings

• The aftermarket industry needs conduit for
  dissemination of timely, standardized, complete,
  accurate, synchronized data that is easy to use.
• There is no shared vision for a solution within
  the aftermarket industry.
• The data standardization issues must be resolved
  first before adopting any technologies.

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Highlights Vision
When defining a vision for data in the
aftermarket industry, the key shaping factor was
thought to be a need for timely, standardized,
complete, accurate, synchronized data that is
easy to use
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Highlights Needs
While the group determined a variety of needs
that would justify a unified data solution,
affordability and the need to be able to make
informed decisions were the most highly ranked
key elements
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Highlights Key Issues
Top Three Industry Issues Cited Slow/Anemic
Sales Competitive Pressures Gross margin
compression Parts Proliferation requires
higher business investment/working capital
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Highlights Key Trends

• Supply Chain inefficiencies
• The effects of globalization
• Consolidation within the industry
• Raw material cost increases
• Transportation costs
• Margin erosion
• Competitive pressures
• Imports and overseas sourcing

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Highlights Online Research Sample
Conclusion Responses are more likely to be from
a manufacturers perspective
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Highlights Data Management Complexity
Conclusion In recent years, data has become more
complex, creating the need for a way to deal with
it in an organized fashion
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Highlights Other Observations

• There is still some skepticism about the charter
  and purpose of this
• Initiative. Some of this is rooted in
  history, while a great deal of this is based on
  lack of information and pre-conceived notions
  about the intent of this endeavor. There were
  still segments within our sample that distinctly
  exhibited lack of clarity on the purpose and
  benefits of this initiative.
• From our vantage point, it would be important to
  this initiatives success that we
• address these concerns through education,
  transparency, objectivity and open
• communications.
• Several comments and suggestions were shared as
  it related to the selection of an objective, cost
  effective and competent technical team for this
  project. It will be important that a partnership
  is developed with a technical entity that also
  has a financial stake in the success of the
  initiative.

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Barriers Lessons Learned (Other Industries)

• Barriers
• The availability of funding and capital for
  successful technology implementation
• It is a major cultural change for
  organizations to be comfortable with electronic
  sharing
• of data and by trusting their partners with
  access to their systems.
• There was also a perception that
  standardization meant loss of local autonomy for
• providers.
• Lessons Learned
• Build a collaborative culture. By definition
  data standards development and adoption
• require collaboration. A standard has no
  value unless there is broad commitment
• among stakeholders to use it.
• Be informed leaders. Establishing standards
  requires leaders from all sectors of the
• industry to understand the benefits of
  standards and can promote a common vision
• for their use.
• Use incentives to drive adoption.
• Acquire adequate capital financing.
• Cultivate staff skills and knowledge.

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Recommendations

• The leadership of the three sponsoring
  associations should first align their views on a
  go forward strategy after the conclusion of
  this study vis-à-vis development of this
  solution.
• If the consensus is to proceed with the
  initiative
• Form a project steering committee (5 10
  individuals) comprising of industry leaders to
  guide and oversee
• The scope of the initiative based on business
  objectives
• Raise required funds and capital for the project
  (It is highly recommended that the budget
  estimates provided in this study be used as a
  guideline)
• The selection of consultant/s and vendor/s for
  the project
• Approval of the project plan
• The progress and timely completion of major
  milestones
• The appropriations and approval of funds based on
  completion of deliverables
• Industry communication and training strategies
• Frequent Communication and Transparency during
  the development phase

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Recommendations (Continued)

• The vendor selection process should be
  transparent and be based on merit and fiscal
  considerations
• Compensation should be based on timely
  completion of deliverables and major
  milestones
• The solution should be
• Based on Open Platform standards
• Built with provisions to interface with major
  legacy systems currently deployed within
• the aftermarket
• Scalable and Modular in Design
• Should not be dependent on one specific vendor
  for support and maintenance
• Should be designed with specific business
  objectives and goals
• User Friendly and Easy to Use
• Secure and Reliable
• Designed with incremental implementation and
  modular rollout provisions