Research ..... by Jolito Ortizo Padilla: The Telematics of Toyota by Jolito Ortizo Padilla

1. Toyota Organizational Background

Vision:

The vision of Toyota Motors is through improvements of conventional technology, as well as pioneering efforts in the application of new technologies, Toyota is taking great steps to develop eco-cars which will help us become a low carbon society.

Mission for Technologies is a statement of activities relating to the development of key technologies.

Toyota creates vehicles that are popular with consumers and provide world-class safety to protect the lives of customers. It provides optimization of energy/infrastructure to local communities, putting high priority on safety and promotes product development with the ultimate goal of “completely eliminating traffic casualties”. It deliver cars that will stimulate and even inspiring and that will thereby earn smiles from customers, addressing employee’s education under “Genchi-genbutsu” philosophy, which is to go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed. Through true mutual trust with partners, contribute to development of new technology and improved expertise will contribute for economic development of local communities with R&D operations functioning effectively in each region.

2. Introduction:

Mobile commerce in the automotive industry could characterize in parallel and in conjunction with another term framed within the industry –telematics. The “ telematics” is an emerging business area that allows car manufacturers and aftermarket producers to provide innovative solutions for information services. These information services include automatic and manual emergency calls, roadside assistance services, GPS, traffic and dynamic route guidance, Internet communication and personal concierge services.

In a highly competitive automotive business, both product and quality and competitive pricing no longer provide sufficient differentiation to capture and retain consumer. Toyota provide each consumer with an attractive and desirable design, customer care, user experience and overall vehicle service package, which includes Toyota telematics. The extent to which the automobile manufacturer is successful in providing such package is becoming a differentiating factor in the consumer buying decision (Hogan, 2009). In fact , a firm’s ability to provide information technology capabilities in automobile may become as important as cargo capacity and mileage of an automobile for both retail customers and business service providers, i.e., leasing agencies, transportation and distribution companies. While there are already some mobile application

3. Case Description and Analysis

Toyota’s telematics technology is intended to streamline the information processing requirements of consumer driving a vehicle, has brought to surface the need for integrating the information technology architectures of various service providers with the manufacturing technologies of various automotive firms.

1. While system integration has always been an issue when multiple vendors are involved in providing enterprise wide solutions in business, this issue takes a greater prominence on:
What is the impact of” telematics” on the privacy and security of the driving public as a whole?

Toyota telematics marketplace is experiencing explosive growth in unit sale and user acceptance in the domestic market and abroad. The in vehicle information systems market for personal and commercial vehicles will rise from $15 billion in 2014 to $26 billion in 2016 (Greengard, 2013). In vehicle navigation has already seen acceptance overseas, and will account for a global market of $87 billion by the end of 2014. Several other studies also point to the anticipated explosive growth of this market. (Kalakota 2012; Thurston, 2012). This anticipated growth has created an extraordinary opportunity for the automotive industry and electronic marketplace. It has a significant automotive, marine and heavy truck OEM and aftermarket product sales, as well as alternative and additional revenue streams.

According to Larry Swasey, VP of Communications Research for Advanced Business Intelligence, a number of phenomenon are creating huge opportunities in this marketplace. Rising traffic levels, an increase in the amount of time spent in a vehicle and the technology savvy consumers behind the wheel are all driving the vehicle (Swasey, 2012) . Those who actually need to be in a vehicle for extended periods of time will be looking to take advantage of a plethora of services ported from the internet such as weather , traffic and location based information. This information will become available to the masses as GPS units fall in price. There is also a cultural shift and changing expectations of what is the norm of today, in terms of services offered in a vehicle, and in the future.

3.1.1 Core elements of Toyota Telematics

Recognizing these changes , one can already see a steady shift among automobile firms from manufacturing of goods to providing service in order to realize additional revenue and profit streams. Many firms will start providing value added technical and consumer support services, and the demand for such services is hastened by several other shifts in the North American and global economies in the recent decade, as evidenced by the following:

· Robust niche/ sub economies within the larger economy

· A technologically astute society

· Consumer thirst for wireless communications, computing and entertainment conveniences

· Consumer demand for convenience services accelerating technology and consumer services

· Personal safety

· Federal initiatives

· Automotive technology integrated with high tech industry

· Hardware/Software and service providers demonstrating a willingness to partner/develop creative business models

· Drive to develop effective consumer marketing programs to retain customers

· Business desire for capital and cost reductions

· Demand for efficiencies in the supply chain

· Reduction in human capital to execute transaction processing

· Immersive brand management

· “I have to invest now because my competitor has the technology

Figure 1: System Integration and implementation Activities

BRD and RPF	The Phase where Business requirements and Requirement Document and Request are formulated
HLD	Clarifying the planned solution by the specifications about the operation of the system
DS	The Development of the detailed design and specification phase
Configuration	System is programmed by using table with values as defined. System configuration, customization, and development is shown
Implementation	Implementation and operations are converted to the new system
Support and Maintenance	This is a post implementation phase where the system is supported and maintained.

3.1 Request for Proposal

This section is prepared by the Core Functional Group to comply with the standards recognized by the vendors. Toyota held a workshop to establish wireless networking technology. Since then new specifications have been introduced by industry alliances. Companies manufacture and sell products based on specifications. A standards group of Toyota examines the needs, technical problems , and solutions provided by the vendor. The standards group formulates a detailed specification and places it in public domain.

Wireless data network require radios that take in digital data, zeros-and ones, modulate and transmit data as radio waves, demodulate the signal, and convert back to zero and one. Coexistence is the ability to have many radios operating without interfering with each other. These capabilities must be explicitly defined in specification, confirmed by standard test procedures and adhered to by manufacturer.

4.0 Alternative Solutions

1. This evolving marketplace converge the interest of many industries such as technology, consumer electronics and internet content providers as they with the automotive industry in providing the vehicle package. For example, the convergence of voice and data technologies and services is reducing the barrier to designers and marketers within the automotive industry. Mobile communications equipment, cell phones, and palm computers are becoming cellular computing devices capable of GPS, navigation, cellular telephony and computing functions such as office telephones and e-mail.

The evolution is also creating cross industry dependencies, For example, wireless internet communications software, feature and functions are becoming standard for consumer hand- held, desktop and mobile devices. Such dependencies are causing entire business communities to cooperate in some ways never seen before. Standard setting organization, consumer electronics organizations, communications, technology and software vendors are all looking to develop standard locally, regionally and globally. This will inevitably cause a tremendous unrest within the automotive community due to its impact on the automotive product development. Toyota want to let high tech consumer and services sectors manage the dynamic rate of change, but work with them in developing a technologically independent, open standard for automotive connectivity that can be leveraged across its business community. While this may help Toyota focus on its product development cycle, the business opportunities afforded by this mobile technology on the product development itself can’t be ignored.

2. Toyota’s telematic marketplace will start to have a significant impact on many activities on the automotive value chain such as:

· Platform development and management

· Embedded systems engineering software and development

· Marketing and brand management

· Consumer services

· Repair and service parts operation

· Customer care

· Warranty services

In system evaluation, selection and implementation Toyota has the different level stages:

Figure 2 : System Implementation Life Cycle

Pre-Implementation Implementation Post-Implementation

5.0 Pre-Implementation (Pre-Sale)

5.1.1 During this phase several vendors were invited to join the bid. A demonstration is very favorable for Toyota in order to check the performance of the product.

5.1.2 The criteria are of the following:

- Platform development and management

- Embedded systems engineering software and development

- Marketing and brand management

- Consumer Services

- Repair and Service parts and operations

- Customer care

- Warranty Service

- For Radio Standards , the cost and power of radio hardware increases with frequency and date rate, so the items listed generally reflects ascending power consumption and cost moves down the list

- Bluetooth is designed primarily from mobile phones where power, cost and radio component size are at premium.

- - Open Air and Home RF are designed to deliver wireless internet, digital video and audio where cost and ease of installation are the determining factor. The office environment demands high data rates for many people, The 802.11 standards are optimized to deliver data packets (Internet traffic)

5.2.1 Vendor Selection (Choose the Best Solution)

The various vendors involved in WPAN and WLAN specifications and standards conform by Toyota standard group are:

1. Wireless Ethereal Compatibility Alliance (WECA)- is an industry alliance certify with interoperability of 802.11b WLAN products under the logo “WiFi” (Wireless Fidelity). Product that bears this label must pass a series or standardized inoperability test administered by Toyota. The endorsement assures customers that the wireless product will interoperate with all other Wi-Fi certified products. It requires networking knowledge, including familiarity with terms like IP address, DHHP, domain suffix , port and protocol.

2. Bluetooth Special Interest Group (SIG) by Ericsson which released the first Bluetooth product, a wireless headset for mobile phones.

3. HomeRF Working Group (HRFWG) primarily of radio manufacturer and promote a wireless standard for computer networking , cordless phones , multiplayer games and toys.

4. HiperLan Alliance that promotes the ETSI HiperLAN standard.

5. HiperLan2 promotes worldwide standards for corporate, public and home environments

6. European Telecommunications Standard Institute (ETSI) that develops standard for the telecommunication, broadcasting and information technology fields. The ETSI Broadband Radio Access Network (BRAN) develops specifications to insure interoperation of HipwerLan 2 products

6.0 Implementation

Toyota has to seek partnership and industry relationships with various technology providers to develop products and services and deliver these to customers in order to be successful in this marketplace. This will become a challenge given at which the technical environment is changing.

6.1.1 Contractual Implementation

The budget was over a Billion yen for this project with the help and support of the vendors.

The rapid change in the technology industry, as well as in the consumer and communications environment, has a significant impact on the success of the mobile environment. Automotive and other technology providers must work together in establishing a robust, stable, ongoing technology and communications environment that can incorporate both emerging as well as existing technologies. Some of the technology challenges include developing

· On board systems, displacing many off board systems

· Navigational systems as standard equipment

· Global open standard in product development

· Easy to use and flexible interfaces

· Strategies to ensure data and personal information security

6.2.1. Technical Specifications and Configurations

The technology environment supported by both Toyota and other technology and service providers should be transparent enough to allow consumer to configure the services they need with relative ease, if it is to generate significant acceptance among the consuming public and make the business model profitable for all involved. However, customer expectations on access to information are changing rapidly with each new technology, and are creating a volatile customer and business environment.

These are the general forces that are driving the use of mobile technologies in the automotive sector, and these will ultimately shape the industry’s future applications:

· Increasing consumer demand to have both computer and technology services at their finger tips

· Growing desire by consumers to access multi-media and communications while in their vehicles

· Growing business demand for the application of technology to gain operational excellence

· Growing need for storing and analyzing customer preference data( using data warehousing technologies) in order to develop strong customer loyalty.

· Growing concerns related to privacy and consumer protection by various public and private organizations.

6.3.1 User Acceptance Testing(UAT)

Global standards and regional pressures will have a significant impact on any successful telematics initiatives and service in Toyota. Recently federal agencies have determined that dialing a cell phone more distracting than talking to a voice recognition unit with the driver’s hands on wheel. A regulation to reduce this distraction will have a negative impact on the handheld communication devices and will be boon to the voice recognition software and hardware developers. This illustrates how a study/ research that deals with the safety of the driving public could deal a blow to certain technologies while promoting others in the blink of an eye.

Various regulatory bodies of the federal government have established policies impacting each component of the mobile commence of the federal government have established policies impacting each component of the mobile commence and vehicular telematics communities. Many of these agencies are engaged in providing development support, leadership and establishing policy and procedural standards:

· National Highway and Traffic Safety Administration (NHTSA)

· Federal Communications Commission ( FCC)

· National Traffic and Safety Board( NTSB)

· Ministry of Transportation

· Ministry of Defense

· National Institute of Standards and Technologies ( NIST)

Given that many of these agencies operate under different charter , reaching a consensus is quite complex. Also, these regulatory groups have to work with various business/industry interest groups , if this mobile industry is to support the development of the products and services in the telematics marketplace.

· Automotive Multimedia Interface Consortium (AMIC)

· Japan National Standard Institute ( JNSI)

· Intelligent Transportation Society ( ITS)

· Consumer Electronics Manufacturing Association ( CEMA)

· Bluetooth Consortium

· Japan Automobile Manufacturers Association

These groups have to play , as a watchdog for the automotive industry, not only to monitor and influence legislation that affect the product development cycle, but also support the collaborative effort among the various constituents of this telematics marketplace. For example Figure 1 illustrates the many individual players that have work together in support of providing telematics solution to the consumer. Besides Toyota, this marketplace includes many new players that continue to bring new and innovative products and services to the market at a rapid pace. Given the volatility of this technology market, creating standards and seeking consensus is obviously quite significant challenge for many of this industry groups.

Figure 3: Illustration of Individual players working together in support of providing telematics solution to the customer

7.0 Post- Implementation

Industries must work together at the macr0-level to create a technical environment that supports the amalgamation of business processes and services. Some of these industries include automotive , transportation, telecommunications , distribution, entertainment , technology, publishing and travel. Many of these industries have rarely or never worked together in the past. Each of these industries needs to understand that its business drivers will impact the decisions of others, and partnership is critical if telematics in the automotive environment is to flourish.

Also, each participants has to, with a varying degree allows his/her technology and service to be supported in an open environment. For example , the E-portal model shown in Figure 2 describes how several satellites , electronic and automotive component suppliers work with various Internet , content and other services providers to satisfy a consumer-directed content request, while the consumer in the automobile. To make this happen , several standards have to be agreed upon so that information can move from one technology provider to another , while technologically open standards has to be created to allow business models to co-exists.

Given the diverse players involved in the Toyota telematic marketplace , partnering plays a major role for business growth. In this multifaceted and multilayered marketplace, partnership and industry presence play the linchpin role for successful firms and these firms have to develop strategies that allow for multi-threaded competition. By offering hardware and services at various level to OEM’s revenue stream incrementally as opposed to the single thread “ if we build it, “they will” come model. A firm provide a “single specialized service” in one target market and act as a “ me to” provider in a different market segment within the same industry. The bottom line is that in this emerging marketplace. The consumer will define what is of value and what line of business will thrive. The participating firms must then determine which service lines to divest, invest, partner or purchase.

Figure 4: Illustrations of how satellite , electronic and automotive component suppliers work to satisfy a consumer related content request.

8.0 Conclusion and Recommendation:

With its variety and convenience related service programs, telematics has moved from the novelty phase to becoming an integral part of an overall consumer package. The dynamic technology environment and its influence on the private sector, federal, state and local government agencies ; and the consumer community has created an enormous complexity. This complexity calls for leveraged “business technology” processes never seen before in the automotive sector. New paradigm are being developed, business models are being created and consumers are thirsting for new services. It has yet to be determined if the three legs of the stool- industry, consumer and government-can get it right and work together to make Toyota telemetric applications flourish, or if they let the inherent complexities create an environment that makes the amalgamation of services, technology and M-commerce transaction difficult to manage in the short run and successful in the long run

Unfortunately, it is difficult to say who will lead or if they will be allowed to lead. However, given the history of Toyota and its fortitude towards developing innovative and reliable consumer products , our contention is that this industry will play a key role in creating standards in support of the telematics marketplace. These standards will then make the incorporation of such product within an automobile industry as transparent to the driving public as many of the other successfully embedded technologies that came before.

Reference”:

Greengard, S (2009) Going Mobile , Industry week , 249

Hogan, M (2009) Keynote, 2^nd Digital Detroit Conference November

Kalakota , R (2008) M-Business : Race to Mobility McGraw Hill, p456

Swasey, L (2009) Intelligent transportation system : In vehicle navigation and communications technologies , Global Markets and Forecasts. P213, 214

Thurston, C (2009) Management Information System , McGraw Hill, pp 213, 215

Index

Many of these impacts can be categorized as B2B (Business to Business), B2C (Business to Consumer) and B2Me (Business to Me). Note that B2Me is an individual centric portfolio of content and services controlled by consumer , as opposed to B2C , where the focus is on a mass/targeted message pushed out demographic groups. Stated differently , while B2C views services as being pushed by the firm to consumer. B2 Me views services as being pulled by the consumer from the firm.