Auto Electronics

Rethinking Traditional Telematics Delivery

Vehicle manufacturers have offered telematics services for more than a decade, with indifferent success. While the range and sophistication of these services vary, they typically depend on a vehicle-embedded device, use centralized call centers to provide customer service, and are available only by subscription.

Current market drivers are challenging that model. Mobile phones and portable navigation devices (PNDs) are everywhere. Our “connected society” is asking for the same information and convenience services in the vehicle as at home or work. Many people believe that safety-related services should be provided to consumers so that they are always available throughout the service life of the vehicle — not dependent on subscription renewals.

Innovations in technology and business models can support vehicle manufacturers in addressing these challenges, while keeping costs under control and improving service quality.

One agent for change is the ability to distribute services across multiple devices. Consumer-centered services will likely be delivered using the customer's mobile device or another external communications link, separate from the communications for vehicle-centered services. The mobile device will use the vehicle's display and sound system to interact with the driver. Most service delivery chain “intelligence” will reside in the mobile device, or a land-based system, not in the vehicle. This will allow several generations of increasingly sophisticated services to be provided in the vehicle with few, if any, changes to the vehicle itself.

Some vehicle-centered services, such as stolen vehicle tracking, will still require vehicle-embedded communication devices, but these can be reconfigured remotely with firmware upgrades. Linking vehicle sensors to the driver's mobile phone can provide other services, like automatic crash notification. This increased flexibility will provide vehicle manufacturers and consumers more choice in the services and content they get, delivered by the providers they choose.

Call center operations are evolving, as well. For telematics to have widespread success, costs must be reduced and quality improved. Speech recognition cuts call times (and thus costs), but high-quality services are a challenge in this environment. One approach for responding effectively to location requests is to have operators intervene if the speech-recognition system cannot determine an answer. This approach can provide customers with a hassle-free response that is faster for 90% of requests.

Another strategy for improving call center services while lowering costs is to use distributed call centers. Operators in traditional call centers are rarely familiar with the location related to a request, increasing call times and reducing customer satisfaction with the service. VoIP call routing makes networks of local micro call centers possible, moving these services economically out of large centralized operations. For high-volume, location-based services, such a network increases the likelihood that the operator is familiar with the customer's location and can quickly understand the request and respond effectively.

Pricing models will also evolve. Eliminating subscriptions and the safety risks associated with service termination will lower administrative costs and improve customer satisfaction. Costs for safety services are low enough to allow manufacturers to include them in the vehicle's sales price. A baseline number of requests for other services, such as restaurant information or door unlock, could also be included in the vehicle's price, with additional requests charged directly to the driver's mobile phone bill.

The rapid evolution of the telematics ecosystem will continue to create challenges, but using innovative technology and more flexible business models to raise quality while lowering costs will help vehicle manufacturers compete — and even grow the market.


T. Russell Shields is founder and chair of Ygomi LLC. He has a 38-year track record of successfully building companies that define new industries. He is a recipient of the SAE-Delco Electronics ITS Award for distinguished service to the intelligent transportation services industry, and he is an SAE fellow. Shields is currently convener of the ISO/TC204 Working Group developing international standards for Wide Area Communications for ITS.

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