How Agile Supports Automotive Companies to Stay on Top of their Market

The automotive industry is one of the world’s fastest evolving industries and the way consumers consider their cars is vastly changing. The automotive sector is spending around €54 billion (or more than $61 billion) on research and development (R&D) each year. Learn how agile supports Automotive companies thrive in a constantly-changing market.

Cars are no longer just a way of taking people from A to B. These days, consumers expect driving their cars to be an experience, and the industry is responding with rapid development, particularly in the areas of electric cars and connectivity (which opens doors around self-driving cars). Consumers’ growing demand for smart, connected, and autonomous vehicles is only going to keep rising.

Working in an agile way is almost completely necessary here. If manufacturers expect to keep up with consumer demand and competitor development, they’re going to have to learn and respond quickly to an ever-changing landscape.

Car manufacturers will need to acknowledge that they are in the middle of a transformation: They have to change the way they build vehicles and depend on software as much as mechanics; because these days, connected vehicles will need software and code more than horsepower to ensure consumers are happy.

Three drivers for agile implementation include efficiency, effectiveness, and steering in the automotive sector. (source)



Why should automotive manufacturers embrace agile?

Applying Agile methods will help automotive manufacturers stay on top of their market and:

  • Build software based on consumer and market demands by incorporating frequent customer collaboration through the project lifecycle
  • It helps them to decrease the time to market
  • Improves cost efficiency
  • They not only decrease time to market, but can also handle complexity through cross-functional teams

Automotive companies will need to embrace digital in the age of connectivity. Especially companies that supply software to OEMs will be asked to pay attention to agile development in automotive R&D.

Being agile means remaining flexible and reacting to daily changes efficiently. An agile approach aids companies thrive in an uncertain and ever-changing world. When automotive companies employ a competent agile software company, they will see the process played out for their agile development as follows:

  • Shorter development iterations
  • Self-organised and cross-functional teams
  • Customer feedback loops through the workflow

Moving away from the traditional V Model

The traditional V-model is the go-to standard in automotive software development and break-ups the software development process into two key stages or verticals:

  • Requirements and change management
  • Data management

While the left side of the V model takes care of requirements analysis, architecture, software design and development, the right side looks at verification and validation of the product for every stage of the development cycle. (source)


The V-model is the most popular method because it is unpretentious, easy to use, and supports the key phases of software and product development. It allows manufacturers to concurrently develop vehicle parts via different supplies because the standard and specifications are set and frozen at the start of development. However, this is far from perfect.

The biggest problem with this model is efficiency is lacking – The time it takes to initiate through research to real product feedback can be months, or even years! This is why agile is the new way forward. It allows automotive companies to reduce waiting time and improves overall operational efficiency for automotive development.

 Goodbye to the waterfall approach, and hello to agile

The automotive industry is no stranger to agile, but as competition grows and the industry changes quicker than ever before, more companies are feeling the need to move away from traditional waterfall approaches to development and switching to a more agile approach.

This has many benefits, including the production of better products, reduced risk, faster time to market, and cost savings.

The benefits of agile for the automotive industry

There are many benefits to an agile way of working and these lend themselves well to an industry as fast-paced as the automotive industry. They include:

Better products through smaller feedback loops

Because one of the main principles of agile includes customer collaboration and smaller feedback loops, agile lends itself well to the rapidly growing and changing automotive industry. Here, it’s all about knowing what your customer wants – how their preferences are shifting and changing – and being able to provide it. Those who are are setting themselves up for success.

Anne Sandberg, Head of Continuous Improvement & Change at Product Creation, Volvo Cars, demonstrated agile perfectly when she said:

“When we were developing the speech functions in the car, we found that we had installed functions that people didn’t use as expected. That was partly embarrassing and partly very educational for us. We saw that we had to change our development approach.”

Through agile, Volvo quickly determined that their consumer did not use key functions of their vehicles in the way they had assumed they would, and were able to adapt their vehicles to better suit the needs of their consumer. Without agile, this process would have taken longer, and by then Volvo’s competition would almost certainly have adapted quicker.

Decrease time to market

Agile uses cross-functional teams and these helps to decrease time to market considerably through the stimulation of collaboration of team members with different expertise and the enhancement of communication. Time is also saved by reducing silos and the number of hand-offs.

In agile, these cross-functional teams are focused on using their resources to share knowledge and problem solve faster and more flexibly, which means they automatically decrease the time to market of products. And, since we know the automotive industry is fast-paced and ever-changing, that has never been more important. If automotive companies want to remain competitive, a decreased time to market is one way to do it, and cross-functioning teams are a key part of this.

Transform R&D operations

There’s a lot less hardware and a lot more software responsible for powering this generation’s vehicles. In fact, they’re like large super-computers. Like smart phones on wheels. Over 30% of vehicle content is predicted to consist of computers by the early 2020s (so around about now).

Automotive companies need to be ready to produce new software quickly if they don’t want to be left behind, and agile project management is a solid way to do this, helping teams to move away from rigid ways of working into more adaptive ones.

Here, short feedback loops are once more important, as short iterative bursts allow for incremental changes and quicker correction of errors. Project risk will be reduced, customer expectations will be met, and products will be defined at a quicker pace.

Automotive Companies adopting agile: Not if, but how?

The automotive industry is one of tradition and it is about to undergo its biggest change yet, away from rigid waterfall methods of production and towards agile. It is no longer a question of ‘if’ you should start the transition, but ‘when’ you will do it, and, most importantly, ‘how’.

Automotive is just one of the many industries that is totally changing under the impact of technological innovation.  Customers progressively see their vehicles as smartphones on wheels and constantly demand new features and upgrades. This calls for a new way of working and upgrading software seamlessly.

Digital DOM empowers organisations with the tools and processes they need for an enterprise-wide transformation to agile delivery. We’re experts in digital strategy, agile programme delivery, web and mobile development, micro services architecture, and fully automated pipelines. Through large scale and high performing systems, we’ll help you increase your speed of innovation and decrease time to market. If you are an automotive technical leader, engineer or software delivery manager, we’d love to work with you. Consult with us to learn how agile supports the automotive sector.

For more information on how we can help automotive companies with agile software development, speak to a dedicated member of our team by filling in the form on our ‘Let’s Talk’ page, or email hello@digitaldom.io.

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