In this interview, the Managing Directors Peter Ivanov and Andreas Peters explain in the direction in which Valtech is developing – and why business and product know-how, beside technical competence, is of an increasing importance for the success in the mobility market.
The setting-up of Valtech Mobility has been successfully completed. Any reactions from the market yet?
Peter Ivanov: Setting up our joint venture created great interest and curiosity. Over the last few months we have had many conversations with our customers, prospective customers and new players in the market. In our target market, the mobility market, things are moving.
How do you mean?
Andreas Peters: With their new products and offers, car makers are consistently advancing on the path to being mobility providers. Beyond that, they also put a lot of energy into pushing forward the building of an e-mobility ecosystem, autonomous driving and new business models.
Peter Ivanov: Furthermore, new players are making their move into the mobility market. Here not only the mobility of people but also services around the mobility of things play an ever increasing role. Imagine, for example, the delivery of packages using drones or a robot, the localizing of rental objects such as bicycles, building machinery etc. – in this context more and more complementary, digital business models are emerging; for example with insurances.
Andreas Peters: In all these offers, a secure and stable connection of vehicles and mobile devices via an intelligent central service and commerce platform take a central role. And that means areas where we already have 15 years of experience, where we developed our core competences and will continue to consistently improve our expertise.
Which factors are decisive? Still the technological competences of IT solution development?
Andreas Peters: Of course it is important to reliably develop software solutions of high quality but, from where we are sitting, these are not the only key competences that make us and our customers successful. Fact is: It is of existential importance to master the central complexities involved in dynamics and scaling regarding the life cycle. We have developed platforms that today support more than a dozen of brands with several millions of vehicles in more than 60 markets. More than 50 services that we have developed run on these platforms with almost 400 variants – that’s important for the customer-specific differentiations.
Peter Ivanov: This number is going up rapidly and will multiply many times over in the next few years. Platforms and services have to be developed in the upcoming vehicle and device generations and need to be kept compatible. So far, we have successfully achieved that with several hundreds of model starts and a double-digit number of device generations – meeting the deadline with high quality. In particular as a partner of the automotive industry, it is all about generating and reliably securing end-to-end quality at the start of a model – from the vehicle via the device to the content provider.
Andreas Peters: In this area, we have many years of experience and have been able to support our customers many times and ensure success. Still, these competencies alone won’t be enough in the future. The ever changing and growing market comes with new and more complex requirements for all players – while at the same time allowing design latitude for new offers and products.
So you have to build new competences, right?
Peter Ivanov: Absolutely. Apart from technical solutions, the new issues require more and more consulting services, also in the business area or process and change management.
That ranges from strategy consulting to support in the development and introduction of new business and process models regarding new offers into the existing organization. And goes all the way to assuming comprehensive responsibility for partial areas of the overall solution − and their organizational and contractual form and implementation.
Andreas Peters: There is a huge demand for comprehensive products and offers. This goes along with tying the customer into product development at an early stage, solid profitability deliberations and the decision making process. The new products have to be integrated into the organization and process landscape of the company – and at the same time you have to manage customer satisfaction, use and further development. Here, the customers are seeking out partners that can do these tasks and assume comprehensive responsibility. This, in addition to our current strengths, requires new competencies we have to develop to be able to exploit these opportunities.
What does “project“ and “product“ mean in this context?
Peter Ivanov: In the future, there will still be the need for finding individual solutions for our customers − either on the basis of our products or through an individual development. Both have project character. At the same we have to focus on finding specific product offers that help our market to test, implement and – with increasing success – scale the new ecosystems and business models faster and more efficiently. This leads us to product candidates.
And how does a product candidate become a product?
Andreas Peters: Typically, a product idea runs through a successive maturing process. Here, the candidate as a whole has to be made concrete from an internal point-of-view and the market’s point-of-view and then hardened. Together with the customers, we work on the details of its form and life cycle and check if it can be used in the market and if there is a demand for it. This allows the product and also the required process and services to become more concrete step-by-step from the viewpoint of the customer and the market – and thus harden the business aspects, such as pricing and the willingness to pay a certain price.
Peter Ivanov: The product candidate also has to be examined from an internal point-of-view as regards the necessary product value creation across the entire lifecycle, the required sourcing and partnering and the costs involved. If we master these fields, we can also offer our expertise to our customers as a consulting service and in this way meet an existing demand in the market.
And where do you find new ideas for products?
Peter Ivanov: There are several options. For example, the customer can be the initiator by approaching us with an idea or an enquiry. In the context of finding a solution, often a need for the comprehensive delivery, management and further development of a solution or solution component emerges. Sometimes you realize that the developed solution or a component is marketable in another context as well. Then we have to create the conditions and test and harden this option.
Andreas Peters: Our experience shows that in the context of existing mobility solutions, components are being used time and again. So these candidates constitute a building block system that is useful for creating or supplementing solutions for a business idea. Establishing a “building block system” for mobility solutions would make sense.
That means, there are already products available?
Andreas Peters: Yes, there are. In the past we have developed and built some assets with product character. For example, our ACON Box to faster realize a safe and series-capable connectivity of vehicles and devices in the retrofitting sector. Beyond that, some managed services were created that we run comprehensively and are responsible for.
Peter Ivanov: At the moment we are working on a concrete product in the area of smart electric charging that will offer customers in the growing e-vehicle market a significant added-value.
Andreas Peters: We are scanning our existing assets and solutions for potentially more product components. Again and again, these product components provide our customers with advantages in the fast realization of a prototype or a solution for a new business model or service offer – ergo: substantial advantages in the time-to-market situation. For us, these components offer advantages in profitability in the context of development.