Lakana Robert Howe

Robert Howe is an independent management consultant.

26 January

Automotive OEMs have woken up to the importance of software, but they haven’t yet understood the consequences for their systems engineering. The Brainport can help out.

In the time that I’ve been writing columns for Bits&Chips and making presentations for the High-Tech Software Cluster, I’ve repeatedly made the claim that many Dutch companies have world-class skills in software engineering, particularly in the realization of what have become known as cyber-physical systems (CPSs). For the last half year, I’ve been consulting in software engineering with a large automotive OEM, an experience that has been eye-opening, to say the least. My conclusion is that the automotive world has an awful lot to learn about innovating in software engineering and not much time in which to do it.

The roots of this problem lie in the very DNA of automotive OEMs. For many years, they’ve created value through vehicle systems engineering. At heart, they functioned as system integrators, composing together components outsourced to and produced by suppliers. For example, in terms of software, the OEM to which I refer currently develops just 10 percent of the software that goes into its vehicles. The rest is provided by tier-1 suppliers.

The result is that the systems engineering processes of this OEM are deterministic and optimized to decompose the design of a vehicle into components, to outsource the development of those components and finally to integrate them into a system. The shape of their organization and its mentality reflect these processes.

We’re all aware that the world of mobility is changing rapidly, and this hasn’t passed by the automotive OEMs. They’re fully conscious of the potential for new competition from the likes of software-centric companies such as Apple and Alphabet. The OEM with which I’m involved has set itself a range of extremely ambitious targets, including a goal to internally develop 60 percent of the software in its vehicles within the relatively near future. They’ve published a beautiful strategy that, cynic though I am, I find rather inspiring.

While today’s vehicles are merely complicated, the automotive CPSs of tomorrow will be complex. This difference has fundamental consequences. For example, complex (software) systems are difficult, if not impossible, to realize with hierarchical, deterministic systems engineering processes. Further, software systems engineering hasn’t been integrated into vehicle systems engineering. Software is still seen merely as a collection of components that contribute to the operation of a vehicle, rather than the overall intelligence that enables it to operate as a CPS.

Perhaps worse is that the engineering mentality must catch up with the times – I still see architectural decomposition process descriptions that end up at an ECU. In other words, while automotive OEMs have woken up to the importance of software, they haven’t yet understood the consequences for their systems engineering.

And this is where I believe we have an opportunity. Dutch companies have been building complex CPSs since before the term was invented. We have more than 30 years of experience in realizing systems engineering processes that embrace software and, in my opinion, we’re maybe 10 years ahead of the automotive OEMs. I’d like to try and build bridges between our leaders in software engineering and the automotive OEMs. Maybe we can contribute to ensuring that Europe retains a leading capability in the automotive market in the face of emerging fierce competition.