It’s been a decade since Brian Simmermon was brought in as a “make it happen” guy at Subaru America. That was a particularly rich time in the industry to be a problem-solver. Automotive sales in the United States were beginning to tumble with the economy, and an upheaval of a different sort—the Indian Ocean tsunami—had Japanese automakers’ suppliers at a standstill.
Simmermon’s first project as chief information officer was creating a five-year strategy to simplify the company’s labyrinthine IT systems. Plagued by duplication, they didn’t give dealers and suppliers the information they needed. To streamline things and better meet business goals, Simmermon replaced upwards of 90% of the company’s technology.
The plan succeeded: Sales increased from $4 billion to more than $10 billion in that five-year period, doubling market share and lifting profits.
IndustryWeek talked to Simmermon about Subaru’s IT transformation--and the changes in his role from behind the scenes to what’s under the dash as the auto industry increasingly focuses on vehicle connectivity.
What was Subaru America’s IT setup like when you arrived, and where did you start?
When I came here we had a mismatch of systems a lot of duplicity across our systems.
I spent some time looking at our overall systems, and also our overall business relationship between IT as service provider to the organization and partnership within the business units. Both areas needed help. When it came to the technology infrastructure, we had a lot of varying systems that had been put together with an attempt at best of breed, but as you build best of breed, you need to also maintain best of breed. And I think over the years, we may have had the best systems in places, but we didn’t keep up with the care and feeding and upgrades.
So we took a trek for the first three to four years, focusing on reducing the redundancy, focusing on core products and vendors, and creating a much simpler environment in the technology space. This gave us a better way to support the business as it went forward.
We went on a process to simplify and roll out a lot of different Oracle products. We had had pieces of them through the years. We bought Siebold before Oracle bought Siebold; we were an EBS customer but we had multiple versions of EBS. We spent a lot of time cleaning up our environment and migrating to a more customer-centric technology environment, utilizing Siebold CRM, and on the back end, Oracle EBS.
We also spent quite a bit of time understanding the business needs and prioritizing projects. Before I came here, we didn’t have a formal project prioritization process. I’m not sure that the business was getting what it needed, nor was the business communicating across the different lines. The way we were deploying our system was very siloed. So we spent a lot of time ensuring that if a change was made or a new system was added, that it was very integrated with the other lines of business vs. being in a siloed environment.
How long did all this take?
About four years total. We took probably the first six months to figure out what we had and lay out a plan. After that, we probably got 75% of the systems replaced or upgraded in about 24 to 36 months, and continued down the path to either replace or do major upgrades to 95% of our systems.
Did you come in with the full support of the company leaders knowing you were going to make some big changes?
I did. As you start to deliver small incremental business value, people start to realize that “Hey, maybe we have a guy here that we should be listening to.” I tell people, if you go into a new business and new role, don’t immediately take on a two-year ERP implementation. You’ll be very tired and the business will be very tired. Start off with some of the low-hanging fruit—show the value that you can proceed with. Yes, you still will have to take on that big ERP system, but you have to build some credibility first before you press the big buttons.
What did you start with?
I started really more around the parts and service functions and within the sales and marketing functions. But probably the biggest project we started early on was the creation of a data warehouse—taking all of the data within the business and starting to show value, show reports, show trends. The nice thing about taking on a project like a data warehouse is you can start off with just the sales pieces for vehicles in our case, and then add the parts pieces. And then add the security piece. We were able to take some of that and start to show value very early on.
You made some changes in the supply chain when you came in. What were those changes?
With the supply chain space, and distribution supply chain, we stepped back and looked at a few years back how we were distributing our cars. It was right around the time Oracle was buying G-Log, which is now Oracle’s transportation management product. We deployed that from the transportation management process for vehicle transportation. We also developed some systems internally as well, in support of not just the transportation of vehicles, but for the ability of our customers to get the right car. If the dealership or retailer doesn’t have the vehicle in stock, we’ve spent quite a bit of time and money giving them tools to be able to find the car from another local retailer trading vehicles. We’re launching some new technology in the next week or two to actually be able to do a trade before the car has been shipped to the dealership. So if we receive a vehicle at port in Vancouver, and a dealership on the West Coast wants to trade with another dealership on the West Coast, we can support that trade prior to that vehicle even being shipped to the dealership. This is all very focused on customer satisfaction. Give the customer what they want as quickly as they can get it.
How has the auto industry changed since you arrived at Subaru?
The technology has changed so drastically within vehicles. Ten years ago, the consumer was looking for what’s under the hood—horsepower, performance, handling. Now they expect that, but also it’s what’s under the dash. What’s the new technology? What’s the driver-aided technology?
Subaru IT had historically supported the business to back up its systems and direct-to-consumer communications. But now, our new telematics deployment has been launched—and we’ve just had our first sales to consumers of a telematics vehicle. The Subaru IT department, under my direction, has developed all of the technology in the car. So it’s taking it from the back office computer systems to content in vehicle. It’s a very exciting time for us.
How did you decide what to focus on with telematics?
The DNA of Subaru is that we are five-star crash test rating. We have the safest vehicles in the industry, and we want to afford that continual safety and security to our customer, in case they are in an accident where 911 services can be deployed. That will always be part of our focus. We all want to have the bells and whistles, but we wanted to focus on what is our brand, and how do we continue to support that brand in the industry.
So what’s ahead for the connected car at Subaru?
I think what’s ahead for the industry, not just Subaru, is a continual focus on driver aids. Aiding the driver to be cognizant of what’s happening around them. Everybody talks about the driverless car. That’s coming but it’s further out than some of the other technology that’s going to be deployed. For instance, vehicles recognizing vehicles. If it doesn’t look this car’s going to stop at a crossroad, we’d better help you to stop. These are the kinds of things that I see coming. It’s really focused on customer safety and assisted driving. It may be ten years out, but that’s where a lot of the focus in the technology space is.
How far away do you think we are from autonomous vehicle?
I would tell you that before you see any type of penetration, it’s 10 plus years. It might even be longer. The technology is coming along, but there are a lot of moving parts to get there. There’s infrastructure that has to support it too. Recognizing traffic lights and stop signs. So to get to a more autonomous vehicle, we need to think about what has to change on our streets--not just the cars. Driver-assisted driving is the first step. If you can help the driver really well, at some point you can take over for the driver.
