Digital Transformation: How Ford is Transitioning to a Software Company

  • 4 May 2017
  • Disruptor Daily

You might not have noticed, but Ford Motor Company has made a major disruptive switch. The Detroit auto mainstay is getting some attention in Silicon Valley.

That’s right. Ford doesn’t just make cars anymore. Now they’re in the software business.

The cars Ford is producing nowadays have been hailed as smartphones on wheels. Ford CEO Mark Fields spoke at CES — a haven of digital disruption and innovation — in 2015, announcing ride-sharing systems and 25 other innovations bundled under the Smart Mobility initiative.

Instead of seeking more ways to simply sell more Fords, the company wants to enhance connection and produce smarter vehicles to meet tech-savvy demands.

Ford knows these 4 trends are coming, and would rather be ahead of the game than trying to catch up:

  • More people are moving to cities, leading to increased urbanization

  • A growing global middle class with more people yearning for mobility

  • Rising pollution leading to decreased health quality

  • Changing consumer priorities

So instead of try to go down the same path they have for decades, Ford saw an opportunity to change. Instead of being a car company that sold techno-friendly cars, why not become a technology company that sells cars? That thinking has spread throughout the company, leading Ford to become one of the automotive industry’s biggest disruptors.

Ford no longer sees Chevrolet as its chief competitor. Now, Ford is going after Tesla, Uber, Lyft and Google. The company even has a Research and Innovation Center in Palo Alto, Calif., where Facebook first gained a West Coast foothold. The move to Palo Alto has also helped Ford attract some of the brightest minds from Silicon Valley, looking for a new challenge and a new industry to disrupt.

Among Ford’s biggest experiments? Data driven insurance, car swap, rapid recharge & share and parking spotter.

Ford has refreshed one of its most popular vehicles — the F-150 truck — using human machine interaction. More than 130 researchers and engineers worked to integrate digital technology into the F-150, including instrument panels, lighting and sound design. They want to build today’s vehicle, not merely keep updating an old version.

To build a F-150 made for today’s drivers, Ford started gathering as much data as possible about the end consumer — who they are and what they want from a truck. By analyzing current market trends, Ford was able to get an accurate picture of exactly what people expected, wanted and needed from the F-150.

Listening to consumers led to Ford developing My View, a program that allows drivers to customize the content and order of dashboard metrics like fuel, heat and oil. This way, the end user can customize the screen the way they want, not the way manufacturers have deemed appropriate.

The end result is a truck that feels like the driver’s own, leading to greater consumer loyalty. It’s that kind of agility that is a hallmark of a technology company, not an auto manufacturer.

Ford has been using big data to improve its sensors and other information available to drivers, as well as putting IT at the heart of its production, making cars more connected. While self-driving cars are still a couple years away from true adoption, consumers can have useful technology at their fingertips, allowing them to see in their blind spots and become better informed drivers.

Ford still has a Detroit heartbeat, but now it’s fueled by the entrepreneurial spirit of Silicon Valley disruption.

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