Ford Driven to Harness Big Data

Ford Motor is using a large volume of newly available information to improve its business processes. Michael Cavaretta, data scientist and manager at Ford, says the automaker is using new types of data analytics across the entire company to harness the data for clearer insight about the past, present and future.

Cavaretta says Big Data is putting a finer grain on what is happening in real time and making predictions more credible. “Deciding which factors in the past best inform the present is a challenge, but forecasting the future business environment is most difficult,” explains the Ford data scientist, adding, “We want to have as much data going against these decisions as possible, and use the data effectively. The selection of the highest-value business decisions with long time-lines provides both the greatest challenges and benefits.

For example, Ford used new analytic techniques to more accurately pinpoint what types of vehicles dealers should receive. Improved methods behind understanding sales across specific geographic locales are a key part of the company’s business process.

Another question for which the company wanted better data was whether flip glass or lift glass in the rear door was favored by consumers, so Ford targeted social media sites to get better answers about specific vehicle features.

Demographics are another area where new types of information are making an impact. The data can build a clearer story about trends and allows Ford to plan for a changing mobility picture, but bigger data means higher expectations in the boardroom.

“The C-suite has high expectations for decisions to be supported by data and needs company business processes backed up by analytics,” Cavaretta says. “Having the data is the way to get the C-suite on board, and it’s now necessary more than ever to answer the question ‘what data do we have to support that’? Ford sees consumers increasingly benefitting from data mined in real time directly from vehicles themselves.

One case in point: information about how much charge an electric vehicle typically has left, based on data from a large number of vehicles, provides useful information about consumer behavior. Real time data coming from vehicles about congestion will also become more important, as will the signals from vehicles communicating with infrastructure.

Ford’s Cavaretta sees Big Data’s most significant role in constructing a story about the place of their vehicles in consumers’ lives. This is turn helps the OEM better understand segments of their market.

Asked about a longer term future and Big Data, Eric Noble of the automotive consulting firm The CARLAB wonders if the OEMs have answered key questions about who will pay to transmit, and utilize, the data generated by increasingly connected vehicles: “Will the OEM’s have the resources to off-board, and the capacity to interpret, all of the data generated by every action of a vehicle? How would the companies change their business processes to accommodate all the data available?

Noble suggests that the consumer might absorb at least some of the cost of transmitting the data, while in other scenarios third parties might have a business case for moving and crunching the data. He raised the example of user-based insurance. The volume of data available now is small compared to the volume of data potentially soon available. These days the insurance consumer pays for the data to be transmitted, but that’s a much smaller amount of data than what will be generated by vehicles in the future. The industry, as it stands, currently has no way of paying for all the data from millions of vehicles, so a Big Data future could represent a major shift.

In Noble’s experience as consultant, auto makers already outsource data crunching produced by Engine Control Units. Even with its vast number of variables, the amount of data is much less than the quantity of data anticipated.

And of course, The CARLAB consultant says OEMs still face the billion dollar, Big Data question—the issue of privacy.

“Consumers might argue that it’s their car and their data, whereas automakers could say that the code, and therefore the data, is theirs,” says Noble, The CARLAB president.

Although even if the data belongs to the consumer, he or she could always agree to give it up if there is a benefit for them.

At a later date, perhaps sending data might become significantly more efficient, and cheaper. Because the data could be used to provide new consumer services, it might be worth it for people to pay for a car data plan.

The CARLAB’s Noble proposes an alternate solution, “The best outcome for both consumers and automakers might be to place the data in the domain of a third party that can make a business case to off-board it, crunch it, analyze it and repurpose it.”

To find out how automakers are tackling big data take a look at Telematics Berlin 2015 (11th-12th May). Its Europe's best event dedicated to how data is transforming the automotive industry.