Introduction

This report is intended to provide an overview of innovation management in a digital age with

respect to the automobile industry. An effort is being made to elaborate and comprehend the

various elements of digital transformation, and management of complex stakeholder mechanisms

while fostering change, analyzing and evaluating the current processes, and bringing new ones in

place. This report also includes a mock primary research instrument (survey questionnaire),

customer personas, and solution canvas that must be ensured to achieve digital transformation

goals. Lastly, the report concludes why the adopted digital transformation solution is the

appropriate approach and how companies can get the maximum of it.

Innovation Management in a Digital Age

Innovation is a term that is generally used to refer to “change”. According to a novel study by Dr.

Arthur D. Little, digital technologies that have emerged in the last decade have put the whole world

in an extremely competitive state. He states, three crucial concerns have revolutionized how

industries are responding to these digital disruptions; the adoption, perceived benefits, and

associated risks that the companies are encountering. Through his deep research, he concluded

nine building blocks are constantly shaping digital-enabled innovation (Fig 1).

The overall gain of his study is that companies need to embrace emerging technologies and to

adopt a more experimental mindset. This includes investing in new technologies such as artificial

intelligence, the Internet of Things (IoT), and blockchain as well as building partnerships with

startups and other innovative companies to gain access to cutting-edge technologies. He also

emphasizes that the role of leadership is equally important and relevant in order to understand the

various dynamics of innovation management (Michael and Mitsuya, 2017).

 Figure 1: Dr.Arthur.D Little Research Findings

The automotive industry is heavily influenced by ever-increasing competitive stress, dominant

technological advances, short product life cycles, and disruptive shifts in the political, and

sociocultural landscapes. Innovation management is thus considered a facilitator of process,

product, and business model innovation. As evident, competition is neck-breaking, and companies

need to invest more and more in innovation management to keep their competitive edge alive in

the market. This requires them to be more active and focus on curating new ideas and exploring

competitive business models to address the evolving demands of their customers and changing

dynamics of the market (Luke et al, 2019).

Innovation Management in Automobile Industry-BMW Digital Adoption

BMW is one of the largest vehicle manufacturers in the world. According to Forbes, as of 2021,

BMW is ranked #93 in the Forbes Global 2000 list of the world's largest public companies, with a

market capitalization of approximately $63.6 billion USD. Their annual report from 2020

concludes that the manufacturer has earned €98.99 Billion in revenues and a sum of 2,322,862

vehicles was sold in 2020, including all of their popular brand titles; BMW, MINI, and Rolls-

Royce) (BMW Annual Report, 2020).

BMW is a leading automobile manufacturer that is strongly focusing on leveraging the maximum

potential of digital technologies and is utilizing digitalization to optimize its production processes

as per its customer demands. One of the prominent features that BMW has incorporated into

vehicles is the development of IFTT solutions. This is the presentation of the BMW Labs portal

which allows the BMW Group to test new Connected Drive services during the processes and

developmental stages and get active feedback from their customers. This integration of IFTTT

services into BMW vehicles allows users to connect with more than 260 services which include

cloud services, messaging services, and smart-home features– for instance, automatic switch on

outdoor lights when the car arrives at the house premises (BMW Group, 2018).

BMW Labs launched one of the very first features IFTT which stands for “if this then that”, a

digital service that allowed users to enjoy integrated web services. With the associated data, drivers

of the car can utilize the triggering sensors for any sort of activity, for instance, if the petrol level

drops the IFTT service stores a reminder in the driver’s google calendar for refueling schedule.

This app has faced many challenges in terms of user ease and preferences. Another important

consideration that BMW faced with this app was the architecture development. To help combat
challenges associated with these types of apps, BMW and vehicle manufacturers need to pace up

their efforts if they want to keep and retain their customer’s delight (Weiss et al, 2021).

Some of the popular IFTT services of BMW include; climate control, navigation, travel alert,

remote locking and unlocking, restaurant or hotel reservation services, remote start that allows

users to restart their car using a smartphone, BMW-connected drive services, and BMW-connected

app services, and many more.

Radical or Incremental Change

Based on the available information, it is likely that this innovation in BMW's current IFTT services

would be considered an incremental innovation. Incremental innovation involves making small or

gradual improvements to an existing product or service. It builds upon an existing technology or

process and enhances it in some way. In this case, innovation is focused on improving BMW's

current IFTT services, which suggests that there is not an inception of a completely new technology

or service. The success of incremental innovation depends upon these factors; BMW’s resources,

BMW’s goals, and the market condition (Fredsall, 2015).

Formulation of Primary Research Instrument and Secondary Research Framework

To analyze and assess the customer perceptions of BMW’s existing IFTT services, there is a need

to develop a primary research instrument. The core purpose of developing and using a primary

research instrument is to facilitate researchers in finding the answers to specific research questions

and gathering reliable data that is valid for data analysis. Primary research instruments have many

forms, including surveys, questionnaires, interviews, observations, and experiments (Bryman,

2016).

In the case of BMW, a customer survey would be used as a primary research tool to gather

information from potential customers. The survey would focus on the following:
 • Awareness of IFTT services

• Usage of IFTT services

• Satisfaction level with IFTT services

• Suggestions for improvement

(the questionnaire is attached)

Secondary Research Framework for BMW’s IFFT Services

Secondary Research also known as desk research involves collecting and analyzing existing data

and information that is readily available and has already been published by other individuals. This

type of data comes from multiple sources, such as books, academic journals, online databases,

market reports, government publications, and industry studies. The purpose of secondary research

is to acquire a better knowledge and comprehension of the topic under investigation and to

supplement the findings of primary research (Creswell & Creswell, (2017).

In the case of BMW, the research would be based on the following sources:

• BMW website and annual reports

• Competitor analysis

• Industry reports and publications

• Academic Journals/Literature Review

Developing Customer Persona Profiles for BMW IFFT Services

The vehicle industry is a highly competitive manufacturing sector worth over €500 billion

annually, with more than 50 major manufacturers worldwide producing over 80 million vehicles

each year. Despite its lucrative nature, the automotive industry presents significant challenges to

companies operating within it (European Automobile Manufacturers Association, 2012).

The current practices of the global automotive industry are focused to transform their vehicle

development processes into a more user-centered approach to keep their place in the never-ending

race. There is a need to focus on increasing the connection between engineers and customers as it

will bring better results in terms of producing customer-focused solutions Buyer Persona

development comes in handy in getting closer to the specific targeted segments. The execution of

the engineering process decisions on the use of storytelling via customer personas can facilitate

engineers with the more tangible concept of vehicles that they are going to build for their

prospective customers. This proposed vehicle development process would enable engineering

decisions to be made based on the needs of the user, rather than relying solely on technical

specifications that may not be aligned with actual usage. By taking the user's perspective into

account, this process would lead to the creation of products that better meet their needs and

expectations. As a result, the key decision-maker would benefit from increased customer

satisfaction and potentially improved sales (Bryant and Wrigley, 2014).

Customer Persona for BMW and the Proposed Solutions

Creating Realistic Customer Journey Maps

Customers are the cornerstone of any business. Whether it is the automotive industry or any other,

a realistic customer journey map that accurately reflects the experience of the target customer can

help in identifying opportunities for improvement in current or existing offerings or services.

Customer journey maps are essential tools that aid in understanding the customer's perspective,

identifying pain points, optimizing the customer experience, and aligning teams. By creating

realistic and accurate customer journey maps, large or small, all kinds of enterprises can magnify

their customer’s satisfaction, loyalty, and retention, which will eventually lead to enhanced

business success and growth (Rosenbaum et al, 2017).

 Tentative Customer Persona for BMW:

Three potential customers identified are:

James, a tech-savvy 35-year-old Digital Entrepreneur

Mariana, a 28-year-old energetic working mother

Stewart, a retired 65-year-old man with a passion for traveling

Creating Realistic Customer Persona Canvas:

Customer Persona Profiles

Name: Mariana Name: James

Title: Accounts Officer Name: Stewart
Title: Digital Entrepreneur
Title: Retired, Travel Pro
She is a working mother and He is a Tech-Savvy Digital
recently bought her new BMW. He is expecting that new
Entrepreneur with a zest to IFTT Services will bring
She is unaware about using explore new features in his
IFTT Services joyable travel experiences
BMW.
for him.

JTBD JTBD JTBD

: : :
I want the IFTT services to be easy to use, simple,
I want to feel accomplished and satisfied I want to enjoy the IFTT services during
and quick (Functional).
after using smart services (emotional). my long journey (Functional).
I want to enjoy personalized services I want to feel accomplished and satisfied
I want that these IFTT Services help me in setting (Functional) after using these services during my long
my daily routine so that i can manage picking my journey that i am planning (Emotional)
I want that these IFTT Services to assist
child from school without any disturbance I want to enjoy personalized services
me in understanding the maximum
(functional)
benefits that a tech savvy individual can (Functional)
get.(Functional)
I want to feel accomplished and satisfied after
using smart services (emotional)

Customer Journey Map for Mariana

Step 1: Mariana signs up for the IFTT service through the BMW website or app and enters her child's contact information to set up
automatic text messages.
Pain Point: Mariana may have difficulty navigating the sign-up process, or may not feel comfortable sharing her child's contact
information.
Step 2: Mariana customizes the automatic text message that will be sent to her child before she picks him up from school, including
the message content and timing.
Pain Point: Mariana may find the customization options confusing or limited, or may have trouble setting the message timing
correctly.
Step 5: Testing
Mariana tests the automatic text message feature to ensure that it is working correctly and that her child is receiving the messages
as expected.
Pain Point: Mariana may have trouble testing the feature or may not be confident that it is working correctly.
Step 6: Use
Mariana begins using the automatic text message feature regularly to send messages to her child before picking him up from school
Pain Point: Mariana may experience technical issues or glitches with the feature, or may not find it as useful as she had hoped.
Step 7: Feedback
Mariana provides feedback to BMW about her experience using the automatic text sending IFTT service, including any pain points
she encountered or suggestions for improvement.
By identifying these pain points, BMW can work to address them and provide a better customer experience for Mariana and other
users of the automatic text sending IFTT service.
 Customer Journey Map for James
Step 1: Awareness -James becomes aware of BMW's new IFTT services and features through an advertisement on social media or a BMW
email newsletter.
Pain Point: James may not be aware of all the new IFTT services and features available or may not know where to find them.
Step 2: Research-James researches the new IFTT services and features to learn more about their functionality and how they can be used to
enhance his driving experience.
Pain Point: James may find it difficult to locate detailed information about the new services or may not know how to access them.
Step 3: Sign-up-James signs up for the new IFTT services and features through the BMW website or app and enters his information to set
up his account.
Pain Point: James may encounter difficulties during the sign-up process or may have concerns about sharing his personal information.
Step 4: Customization-James customizes the new IFTT services and features to fit his preferences and needs, such as setting up voice
commands, mapping his daily routes, or syncing his calendar with the vehicle.
Pain Point: James may have difficulty customizing the services or may not find the customization options to be extensive enough.
Step 5: Testing-James tests the new IFTT services and features to ensure that they are working properly and meeting his expectations.
Pain Point: James may encounter technical difficulties or bugs during testing that can cause frustration and delay.
Step 6: Use-James begins using the new IFTT services and features regularly to enhance his driving experience and make his day-to-day
life easier.
Pain Point: James may encounter issues with the services or features that can cause inconvenience or delay, such as incorrect routing or
difficulty accessing certain settings.
Step 7: Feedback
James provides feedback to BMW about his experience using the new IFTT services and features, including any pain points he encountered
or suggestions for improvement.
Pain Point: James may have difficulty providing feedback or may feel that his feedback is not being addressed or acted upon.

By identifying these pain points, BMW can work to address them and provide a better customer experience for James and other users of
the new IFTT services and features.

Customer Journey Map for Stewart

Step 1: Awareness
Stewart becomes aware of BMW's new IFTT Services through a BMW dealership or by reading about them online.
Pain Point: Stewart may not have complete information about the new IFTT Services, or may not know how they can specifically enhance his
travel experience.
Step 2: Research-Stewart conducts research to learn more about the new IFTT Services and how they can be used to enhance his driving and
travel experience.
Pain Point: Stewart may have difficulty finding detailed information about the new IFTT Services, or may not know where to look for them.
Step 3: Sign-up-Stewart signs up for the new IFTT Services through the BMW website or app and enters his information to set up his account.
Pain Point: Stewart may encounter difficulties during the sign-up process or may have concerns about sharing his personal information.
Step 4: Customization-Stewart customizes the new IFTT Services to fit his travel preferences and needs, such as setting up voice commands for
navigation or mapping his preferred routes.
Pain Point: Stewart may have difficulty customizing the services or may not find the customization options to be extensive enough.
Step 5: Testing-Stewart tests the new IFTT Services to ensure that they are working properly and meeting his expectations, such as ensuring
accurate route navigation or seamless music streaming.
Pain Point: Stewart may encounter technical difficulties or bugs during testing that can cause frustration and delay.
Step 6: Use-Stewart begins using the new IFTT Services on his long drives, enjoying the enhanced travel experience that the services provide.
Pain Point: Stewart may encounter issues with the services or features that can cause inconvenience or delay, such as incorrect route guidance
or trouble accessing certain settings.
Step 7: Feedback-Stewart provides feedback to BMW about his experience using the new IFTT Services, including any pain points he encountered
or suggestions for improvement.
Pain Point: Stewart may have difficulty providing feedback or may feel that his feedback is not being addressed or acted upon.
By identifying these pain points, BMW can work to address them and provide a better customer experience for Stewart and other users of the
new IFTT Services.
Solution for Three Personas

Possible solution for Mariana

• Customizable IFTT services with an easy-to-use interface

• Personalized customer Support

• idrive system,with thehelp of this technology Mariana cancommand and setup her customized

schedule for picking her son from school

Possible Solution for James

• Customizable IFTT services with an easy-to-use interface

• Personalized connected drive system such as i8,it enhances the driving experience to next

level

• Digital Menu Book loaded with upcoming IFTT attractions

Possible Solution for Stewart

• Personalized customer support

• Customizable IFTT services for example connected drive services as per Steward’s

specific needs with an easy— to-use interface.

• Digital Menu Book for Travel Lovers

Findings of the Secondary Research and the Preferred or Favorite Solution

As per the acquired secondary data and research, personalized customer support and customized

services are considered to be the favorite solutions for many customers in the automobile industry.

The obvious reason is that the customers can get spontaneous and accurate responses about the

problem they are facing. With direct communication and support, they feel more comfortable and

they are able to resolve their issues quickly. Their satisfaction level and loyalty increase with

personalized support. And with customized digital solutions they can satisfy their specific need

and want without any interruption or inconvenience. Customers prefer customized and

personalized services in digital innovation because it makes them feel more valued and inspires

greater brand loyalty. Companies provide personalized service by documenting customer data and

interactions, then leveraging that information to tailor experiences to individual needs and

preference (Mckinsey, 2020).

Assumptions about Chosen Solution

The major assumptions made about the chosen solution include; customers prefer customizable,

they wish that the interface is simple and user-friendly without any complexities, and they pre-

assume that the solution will boost customer satisfaction and loyalty.

Experiments about the above Assumptions

Experiments help manufacturers and decisions to understand what they are currently offering and

how they can mold it as per their customer requirements or assumption. The most uncertain and

important assumption is that customers prefer customizable IFTT services. Two experiments to

test this assumption are:

• A/B testing between customizable and non-customizable IFTT services

• Customer feedback surveys to measure satisfaction with the customizable IFTT services
As digitization has overwhelmed the automotive industry the need for testing has surged.

More automobile firms are now shifting towards software-based testing. Automotive Embedded

Software success requires continuous improvement and A/B testing is a very handy tool to run

tests and experiments for such embedded apps. A/B testing helps in determining the required

perceived customer value and it has helped hundreds of companies in delivering measurable

customer value

(Liu et al, 2021)

Benefits of Change Management:

The innovation will impact BMW's existing customers, employees, and stakeholders. The major

problems that can be envisaged are; resistance to change from existing customers, employee

training and skill development, and integration with existing systems and processes. Automobile

development encompasses complex developmental processes and requires frequent changes that

consistently necessitate redesigning or re-engineering the existing products. Research shows that

efficient change management is the subset of efficient knowledge management and collaboration

in engineering processes (Lee et al, 2006).

All the players in the automobile industry including BMW must understand that this is a highly

competitive and rapidly evolving sector and with the emergence and prevalence of new

technologies customer, preferences are constantly shaping the entire landscape. Moreover, the

automotive industry is having a complex cluster of various stakeholders (Govt, customers, and

suppliers) and any change or innovation can have a direct and adverse impact on them. Decision

makers must make sure that their decisions are aligned with the requirements and preferences of

all their involved stakeholders. An organization’s ability to understand the uncertainty in

innovation paradigms and dynamic competitions is the crucial element that is required to have an

agile enterprise (Teece et al, 2016).

Conclusion:

Innovation management in a digital age is critical for achieving the sustainable success of

companies. They need to embrace emerging technologies and adopt a more experimental mindset.

This includes putting efforts into investing in new, emerging technologies such as blockchain, big

data, artificial intelligence, and the Internet of Things (IoT), as well as developing long-term and

sustainable partnerships with startups and other innovative companies to obtain access to cutting-

edge technologies. By creating realistic buyer personas and mapping customer journeys, BMW

can innovate its existing IFTT services and offer customizable services with an easy-to-use

interface. Customer surveys and experiments can also help in testing assumptions and improving

the innovation process. BMW Management must acknowledge that change management is

essential to ensure a smooth transition to the new system, still, they need to cope with the ever-

evolving tech space in the automobile sector.

Business Model for BMW

 References

1. BMW Annual Report. (2020). Our responsibility-Our Future Available at:

2.