The changing relationships between OEMs and Agencies
Ten years ago, Conjure’s first ever mobile application was designed and built for Smart Car. A small tongue-in-cheek experience, it let the user paint, name and publish their own car design before submitting to a gallery and rating other user’s efforts. Since then, the size and scale of our automotive projects have grown in both depth and breadth, and to date, we’ve been involved in twenty-two mobile app and HMI programmes with seven global automotive OEMs.
As Conjure approaches it’s 10th birthday, I wanted to take stock of the nature of the relationships between OEMs and agencies and how they differ from clients in other sectors.
Agencies need to adapt their selling models, while OEMs need to streamline their purchasing routes.
Agile software development began growing in popularity around 2010, and in the decade since, has become a standard model for product design and app developers. Agile is at its best when the client and agency are clearly aligned on the overarching goal of a programme and while the size and shape of the work is flexible, the target outcome is clear. This can cause major headaches with OEM purchasing teams, who traditionally are used to forensically detailed parts lists, BOMs and JIT delivery plans. One manufacturer we worked with has an entire purchasing framework based solely on price and weight of goods. This, unsurprisingly made it tough for us to sell into. Confusion at the purchasing stage breeds mistrust from the OEM and frustration within the agency, potentially damaging a relationship before it has even begun.
And yet while some OEMs need to take steps in reforming their purchasing track, agencies also need to be more transparent in their workings. It’s not enough to show off awards and case studies, quote a sprint team and say it will all be Agile. Evidence of due process in both design and development is crucial in removing ambiguity and aiding in planning. Taking the extra time to reassure OEMs of the programme flow helps enormously when fostering new working relationships.
Two’s company…
Another area where automotive work frequently differs from product development in other sectors, is in the number of parties that need to work in synergy to create a successful product. Frequently, there are three or even four businesses working in unison. These can include the OEM, Agency, Tier 1, Tier 2 and software vendors — all with different roles, responsibilities and overlapping deliverables.
Diligent planning and product management becomes crucial and each party needs to be sympathetic to the other, especially when the program involves pushing the boundaries of a certain technology. Frequent and open dialogue is crucial in order to deal with unknowns as they appear and with in-vehicle technology changing at such a pace, there will always be unforeseen issues that arise. Siloed teams can be a recipe for disaster and while there may only be a commercial agreement between OEM and their engaged agency, all businesses involved need to be treated as equal partners.
Challenges of scale
Even the largest agency will be a minnow when compared to the size of your average OEM. Agencies pride themselves on big thinking, bringing fresh ideas and new technology to existing and future customers. In many sectors such as travel, tourism, sport and retail, rapid prototyping and launch to market times are not only possible but often essential in keeping ahead of the competition. Due to the sheer size of the OEMs, the automotive industry is slow by comparison and so agencies need to calibrate future thinking with the reality of OEM timelines and internal structure. It’s a delicate balance; fail to push boundaries and the agency risks holding back innovation. Go too far the other way and programmes are at risk of failing.
Another drawback of the sheer size of the OEMs is that there are often many internal teams in different locations who could be of great use to a programme or indeed be undertaking a near identical project and you simply wouldn’t know they exist. Marketing, planning and R&D teams are often so far removed from the product and manufacturing side that valuable input is often lost and friction occurs when they haven’t been included. Building bridges between internal OEM teams will be crucial in the coming years as agency and technology partners become an increasing part of the automotive production chain.
A bright future
Despite these challenges, the future of the OEM and agency partnership is sure to be a bright one. Fast moving, small agencies can bring new thinking and experience from other sectors to their automotive partners, while the OEMs can give agencies new platforms to build and nurture the next generation of interfaces and products.
