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    Software in the Automotive Industry: Main Types and Their Features

    Software for the automotive industry is a key tool that car manufacturers and dealers use to outpace their competitors. The quality of automotive industry software is crucial in enhancing customer experience and improving management efficiency.

    With significant experience in automotive software development services, our company has partnered with industry giants like Kia, Hyundai, and Mazda. This article will share our insights and introduce you to the main types of software in the automotive industry, along with their unique features.

    Basic types of software for the automotive industry

    software in automotive industry

     

    The umbrella term software in the automotive industry includes a variety of product types. This diversity is a necessity, as businesses in the automotive world require different information systems tailored to various aspects of their operations. Moreover, the journey a vehicle takes from its manufacture to reaching the buyer involves several distinct players. This path begins at the auto plant and can include direct delivery to dealerships or distribution via wholesalers. Additionally, the automotive sector broadly encompasses car service stations and auto parts stores, all of which maintain close ties with car manufacturers.

    Each step in the vehicle supply chain calls for its own set of specific automotive industry software solutions, and our company has specialist experience of providing such automotive software development services, particularly the crafting of web-based systems for automotive companies. In this discussion on automotive software development, I’ll be leaning on our team’s rich experience and established industry best practices

    Let’s take a look at the main types of software in the automotive industry:

    1. MES (Manufacturing Execution System) Software: Monitors and controls manufacturing processes on the shop floor, helping management optimize production efficiency and quality. MES tracks manufacturing data, processes, and outcomes, providing a comprehensive «as-built» record of the car’s production journey.
    2. PLM (Product Lifecycle Management) Software: This software (see here for an example) manages the entire lifecycle of automotive products from concept to end-of-life. It facilitates collaboration and data management, giving stakeholders a complete overview of the product at every stage.
    3. Quality Management System (QMS) Software: Ensures adherence to quality standards, manages audits, and tracks any deviations.
    4. Production Planning & Scheduling Software: Optimizes production plans and schedules, balancing demand with resource limitations.
    5. SCM (Supply Chain Management) Software: Essential in the automotive industry, characterized by complex logistics and massive component ranges, this software streamlines the flow of materials, information, and finances. It ensures smooth production and prevents delays and bottlenecks.
      By the way, it’s common in the automotive sector to develop specialized tools for large-scale operations. For instance, some car manufacturers or wholesale distributors handle substantial transportation volumes, delivering vehicles using their own platforms. In such scenarios, automating the management of these transportations becomes essential. This is where Fleet Management Software comes into play, designed to track and manage a company’s vehicle fleet, overseeing aspects like maintenance and fuel consumption.
    6. WMS (Warehouse Management System) Software: Manages inventory and order fulfillment processes within warehouses.
    7. ERP (Enterprise Resource Planning) Software: Integrates various business processes, such as finance, human resources, and inventory management. ERP systems are examples of complex automotive industry software solutions that cover all aspects of the company’s activities and management of all types of resources.
    8. Predictive Maintenance Software: Utilizes data analysis to predict equipment failures and schedule maintenance, minimizing downtime. With the help of such software for the automotive industry, you can create and monitor equipment maintenance and repair schedules, and plan the necessary resources for this.
    9. EAM Software (Enterprise Asset Management): Manages the maintenance and lifecycle of assets, including machinery and equipment.
    10. DMS (Dealer Management System) Software: This software, which our company frequently develops, aids in managing sales, inventory, and customer data for automotive dealerships. It facilitates a two-way information exchange between manufacturers and dealers. The system helps to collect and consolidate important information from dealers for the automaker, and dealers, in turn, receive data necessary for ordering and receiving new cars, training employees, and informing customers.
    11. CRM (Customer Relationship Management) Software: Essential for managing customer interactions, sales, and support services, significantly enhancing customer satisfaction. While CRM systems are used across various sectors of the economy, they are increasingly vital in the automotive industry. This importance is due to the careful consideration consumers give to purchasing vehicles and the wide range of factors influencing their decisions. Advanced CRM systems facilitate high-quality, omnichannel interactions between businesses and clients, effectively managing the customer experience. Leading companies are increasingly adopting the principle of the Golden Customer Record (also known as Single Customer View) in their CRMs and other information systems. This principle involves verifying and consolidating all available client information into a single, comprehensive record. A Golden Record serves as a unified and reliable source of customer data, eliminating confusion and the need to gather fragmented information from various sources.
    12. Master Data Management (MDM) Software: Plays a pivotal role in gathering, storing, and maintaining up-to-date business-critical data. Its data compilation principle mirrors that of the Golden Record concept mentioned earlier, focusing on the aggregation of the most crucial, verified data about an individual or an item. However, unlike CRM, MDM software in the automotive industry can store data not only about customers but also about personnel, contractors, products, services, components, and more. Such Master Records offer a complete and detailed view of the subject or object in question. They are designed to prevent confusion, duplication, and dispersion, thereby eliminating the need for extensive searches for scattered information.
    13. Document Workflow Management System (DWMS): Efficiently organizes and controls documents, drawings, and manuals, ensuring their easy retrieval. Key features of a modern DWMS include electronic digital signatures, allowing parallel processing of the same document by multiple specialists to enhance efficiency, and the continuous movement of documents within the system. These capabilities significantly streamline office work, optimizing document handling and management processes.
    14. Sales Forecasting Software: Predicts future demand and sales trends to aid in production planning and inventory management. Sales forecasting is typically part of the functionality of CRM systems, but in the automotive business, a separate software product is often built for this.
    15. Warranty Management Software: Manages warranty claims and tracking for automotive manufacturers and suppliers, and contains data on recovery and return costs.
    16. HRM Software (Human Resource Management): Automates HR tasks, including recruitment, performance management, and payroll, planning of working hours and holidays. Comprehensive HRM software for the automotive industry also supports all personnel-related document flow.
    17. EHS Management Software (Environment, Health, and Safety): Tracks and manages safety protocols and regulatory compliance within automotive plants.

    The automotive industry software types I’ve described cover key operational areas of companies in this sector. In custom automotive software development, there’s room to craft either derivative systems or more complex ones that merge functionalities from various standalone systems.

    It’s crucial for automobile company software systems to be interconnected and work in tandem, rather than in silos. Often, addressing a single business need might involve several software solutions and databases. Ensuring smooth data flow between these different corporate software systems is key to optimizing everyday tasks for both management and staff. As such, rolling out a new software product typically involves numerous integrations.

    Take, for example, our work on the Dealer Management System (DMS) for Kia. We completed over 20 integrations, each meticulously planned and executed based on extensive, detailed requirements that often stretched over dozens of A4 pages. These integrations varied in duration, taking anywhere from a few days to several months. I talked about this in one of my articles.

    Our skill in seamlessly integrating software within the automotive industry, ensuring that various corporate systems work effectively together, is a key aspect of our expertise at SECL Group. This skill not only sets us apart but also brings additional value to our clients. Our engineers are adept at handling the integration of large and complex software systems, achieving various levels of integration with real skill. 

    Key points of automotive software development

    Having provided a list of the main types of software for the automotive industry, I will share my thoughts and experience regarding the main aspects of such projects. 

    Automotive industry software solutions: custom development or out-of-the-box product?

    automotive software development

     

    Deciding between custom automotive software development and off-the-shelf software is a common dilemma in the automotive industry, each option presenting its unique challenges. Let me illustrate this with a real-world example.

    One of our top-tier automaker clients faced this very decision regarding their Dealer Management System (DMS). Opting for an off-the-shelf product, they anticipated that additional customizations would bridge any gaps between the software’s capabilities and their needs. Unfortunately, this approach fell short. After six months and a significant investment, the client ended up with a system that fulfilled less than half of their required functionality.

    While ready-made software offers immediate deployment and standard features, and often includes an API for easier integration with other systems. However, in scenarios involving complex integrations, this standard approach might prove inadequate.

    It’s important to note that the initial cost of off-the-shelf software can be misleading. Remember that this price is just a starting point – any customization comes with additional, often substantial, expenses. In our client’s case, the software’s initial availability advantage quickly diminished when pricing in their customization efforts.

    Off-the-shelf solutions rarely align perfectly with specific business processes. Their generic design usually results in inefficiencies and necessitates workarounds for unique operational workflows. Customization options are typically limited, restricting the software’s adaptability to particular processes and branding needs. Furthermore, being dependent on the vendor’s update schedule can lead to unwanted features or delays in crucial updates.

    Regarding the critical aspect of security, it relies entirely on the out-of-the-box software’s developer, and there’s a significant risk that the vendor might not offer adequate security for their product, either as a cost-saving measure or due to a lack of expertise. Statistically, most corporate system breaches today occur through insecurely protected off-the-shelf solutions.

    And what about technical support for these products? It depends. Similar to car manufacturers, software vendors offer different levels of technical support. Some provide exceptional service, while others leave much to be desired.

    In contrast, custom software development for the automotive sector offers the necessary flexibility and control. Every feature is tailor-made to align with the customer’s specific business and technical processes. This approach allows for complete customization of branding and user experience, crafting a unique and integrated digital environment for both customers and employees. Custom development ensures that software not only meets current needs but is also adaptable for future requirements, providing a solution that truly resonates with the unique dynamics of the automotive sector.

    Custom software development often provides significant benefits in the automotive industry, a sector where innovation and differentiation are crucial. Here are some of the key benefits:

    • Enhanced Efficiency and Productivity: Custom software can streamline workflows, automate processes, and provide data-driven insights, leading to substantial improvements in operational efficiency and employee productivity.
    • Competitive Advantage: By offering unique features and a tailored user experience, custom software can distinguish your brand from competitors, helping to attract and retain customers.
    • Data Ownership and Security: With a custom solution, you have complete control over your data. This not only minimizes security risks but also ensures compliance with industry regulations.
    • Improved Scalability and Flexibility: Custom software is designed to evolve alongside your business, easily adapting to new technologies and shifts in market demands.

    The importance of scalability deserves special emphasis. Many of our clients aim for business growth and succeed in achieving it. Software systems should be capable of supporting this expansion. The potential for scaling should be a consideration when choosing the project’s architecture and technology stack. Occasionally, a seemingly simpler solution from an off-the-shelf software vendor can lead to future scaling issues. In this respect, custom software development has clear advantages.

    When deciding if an off-the-shelf product is suitable for you, consider how much you are willing to accept its limitations and standardized functionality. For instance, the drawbacks of an ERP system are offset by its ability to cover all aspects of a company’s operations, replacing multiple software packages. Also, CRM (Customer Relationship Management) systems, with their routine operations and standardized processes, are well-suited to off-the-shelf solutions in the automotive industry.

    However, in most other scenarios, automotive software development from scratch is more advantageous. Choosing the right development team with relevant automotive industry expertise is key for such projects. At SECL Group, our experiences working with KIA, Mazda, and Hyundai have shown that a development team’s knowledge of the industry’s specifics can save clients significant time and money.

    Automotive software development project technologies

    Selecting the right technologies is a crucial step in software development projects within the fast-paced automotive sector. Misjudging technology choices can lead to delayed updates and compromised software reliability, a costly mistake for systems handling sensitive data and critical business processes.

    I typically advise clients that the tech stack should be chosen based on the project’s nature and specifics. Are there exceptions? Certainly, as business requires flexibility. An example from our experience in the development of software for the automotive industry highlights this. Large enterprises operating multiple software systems aim to avoid a ‘tech zoo’, as I’ve discussed in a previous article. For this reason, corporations establish technology sets that can be used in their projects.

    In the early stages of our collaboration with Kia, we were informed about their tech stack preferences of PHP/Yii and JS/Vue. Our team includes PHP experts, so aligning with the client’s preference was straightforward. However, if given the autonomy to select technologies for building a software product from scratch – a common scenario – we would lean towards Python/Django or Python/FastAPI for the backend, and JavaScript/React for the frontend. Nonetheless, the freedom to choose technologies independently is not always available, and as a client-centric company, we respect and adhere to our clients’ preferences.

    This approach is also relevant when projects involve upgrading existing software systems. Transitioning software to different programming languages is a complex task, not always feasible at the desired time. Hence, if a client’s applications are built with .NET or Java, for instance, developers must be prepared to work within these established parameters.

    If a client has no specific technology constraints, the project’s tech stack should be tailored to its unique requirements, as I’ve advised in another article. The current landscape offers a plethora of programming languages and frameworks suitable for efficient and high-quality development from scratch. 

    For new project backends, Python/Django or JS/Node.js are often top choices. PHP/Laravel/Yii, Java, or .NET are used less frequently, generally in scenarios where the client has an existing tech stack they wish to maintain. For frontend development, JavaScript and TypeScript are preferred, with Angular, React, or Vue as common choices. During the tech stack selection process, we thoroughly discuss issues like future scalability, maintenance, and software updating considerations with stakeholders. 

     Automobile industry software integrations

    Effective data exchange with pre-existing systems is a crucial aspect of implementing new software packages, which is why even most off-the-shelf products come equipped with APIs for integration.

    In the case of large, custom systems, the situation is more complex. These often require numerous integrations with bespoke requirements. A notable example from our work in automotive software development involved the DMS we developed for Kia, which required over twenty integrations. To illustrate, the integration specifications with just one CRM system spanned about 80 A4 sheets. Therefore, the implementation of integrations between a new product and various existing systems can vary significantly in duration, from days to months, depending on requirement volume and process complexity.

    Based on our experience, here are a few insights into the labor-intensive and meticulous nature of software integration in the automotive industry:

    • Extensive Planning: In one significant project, we orchestrated over twenty integrations. This level of complexity is not uncommon in automotive software development.
    • Diverse Requirements: Each integrated system is usually managed by a different department or subdivision of the client, meaning each integration has its own set of unique requirements. Over several months, our business analysts gathered all these requirements from the customer’s various departments, forming a comprehensive requirements document for this project phase.

    The example I’ve provided highlights the depth of planning and coordination required in cases where seamless integration of different software systems is vital. The list of necessary integrations, their methods, and requirements remain a constant focal point for all project stakeholders. From our project experience, integrations with complex systems from well-known vendors, like SAP and Salesforce, are always intricate endeavors, best suited for highly skilled engineering teams. Our team, for instance, has successfully executed such integrations multiple times.

    Even a single integration can take months, given the need to manage extensive data, organize bi-directional data exchange, consider user access permissions and roles, ensure information is accurately displayed across the system, and adhere to stringent security standards. Such tasks demand the expertise of senior-level developers. For context, out of the total 100,000+ hours spent developing Kia’s DMS, several thousand hours were dedicated by our senior developers to various integrations.

     Security in automotive software development projects

    Security is a paramount concern in developing software for the automotive industry, given the sensitivity and importance of the information it handles, including customer data like names, addresses, and financial details. Car buyers and manufacturers alike need assurance that this confidential information is protected robustly.

    By the way, a common issue with off-the-shelf products is their often inadequate security levels, which often leads many clients to opt for custom development. 

    The potential vulnerability of automotive industry software is also heightened due to its extensive and intense usage. For example, a dealer management system might need to accommodate operations for a car manufacturer and hundreds or even thousands of dealers across different countries, each requiring access to various data categories. To address these security challenges, we employ skilled software security specialists and adhere to our customers’ corporate security standards.

    It’s crucial for project teams to follow best practices for secure coding, staying alert to vulnerabilities, especially those associated with external open-source libraries. Our developers use secure programming techniques to safeguard the systems against threats like DDoS attacks, cross-site scripting (XSS), and SQL injection.

    While I’ve discussed software security in depth in my articles, I won’t repeat the entire list of security rules here. Instead, I’ll highlight a few key aspects of our tried and tested security policy that are particularly relevant to automotive industry software:

    • Proper System Access Procedures: All accounts must have strong passwords that are challenging to guess. Additionally, account information should be encrypted, and any deactivated accounts need to be promptly deleted. Regular password changes are recommended for users, and sysadmins should block accounts after a series of incorrect login attempts.

    For instance, allowing only 3-5 incorrect password entries before the account is temporarily locked can enhance security. Once the limit is exceeded, the user should undergo additional verification to regain system access. IP filtering, where only users from authorized IPs can access the login field, also significantly enhances system protection.

    Implementing multi-factor authentication for users adds an additional layer of security. This can range from simple measures like entering a code received on a smartphone to more advanced methods such as biometric identification using AI.

    • Network Security: Network security is crucial for safeguarding network infrastructure, monitoring, and controlling traffic to prevent unauthorized access, intrusion attempts, and data breaches. It encompasses server firewalls, intrusion detection systems (IDS), and intrusion prevention systems (IPS) that detect and block malicious activities. Continuously monitoring all alerts for unauthorized access, unplanned system changes, and any signs of system intrusion is mandatory.

    Server segregation is a critical aspect of network security. The production server, which stores vital business data, must be particularly well-protected. Access to this server should be limited to a select group of employees, and developers or external contractors should not have access. Furthermore, only code that has undergone thorough security auditing should be deployed in the production environment.

    I also advise our clients to implement a DMZ (Demilitarized Zone, also known as a perimeter network). This strategy effectively shields critical data from unauthorized access, thereby bolstering the overall security of the company’s IT infrastructure.

    • Timely software updates: Keeping all system software up-to-date reduces the chances of cyber attackers succeeding.
    • Regular system vulnerability scanning: Vulnerability scanning helps identify and fix any security flaws.
    • Anti-Virus Software on Servers and Other System Devices: It is crucial to have anti-virus software installed and regularly updated on all servers and devices. Prompt installation and proper configuration of patches following any security incident are essential to maintain robust defense against potential threats.
    • Endpoint Protection Software: This software is vital for securing computers, servers, and portable devices within a network. It guards against malware, viruses, and ransomware by scanning for and eliminating malicious software. This proactive approach helps prevent infections that could disrupt operations or lead to data theft.

    For optimal endpoint security, developing a centralized management console for sysadmins is recommended. This console enables them to oversee the security status of all connected devices. Implementing communication security measures, such as email filtering solutions, is also crucial to protect against threats like phishing attacks.

    • Data Encryption: Encrypting sensitive data is a key security measure. This includes safeguarding customer information, financial records, vehicle data, etc., by making it unreadable to unauthorized parties, even if they manage to gain access to the system.

    These components form the backbone of our approach to ensuring the security of automotive software. While the list can be expanded with additional measures, the key takeaway is that modern automotive software development possesses the tools and knowledge to meet advanced industry and corporate security standards.

    Conclusion

    In this article, I’ve explored the wide range of systems that fall under the umbrella of software for the automotive industry. As you’ve seen, this can range from complex systems that span a company’s entire operations to more localized products targeting one of more specific business processes. The choice of software depends heavily on a clients’ unique business model and their specific software needs. 

    At SECL Group, our expertise in software development and deep understanding of the automotive domain enable us to deliver products that meet the expectations of various market segments, including car manufacturers, dealer networks, and businesses in auto service and spare parts supply.

    Software development for the automotive sector is a key area of specialization for us, and our experience of collaborating with industry giants like Kia, Mazda, and Hyundai, gives us a comprehensive understanding of the latest trends in this field. Our project managers, business analysts, and engineers are well-versed in the nuances of the automotive business.

    The insights shared in this article are just a snapshot of our extensive experience. It’s designed to guide you on what to consider when contemplating software solutions for companies involved in the production and sale of vehicles. If you need software for the automotive industry, contact our experts, whose skills and expertise will ensure that you receive a reliable and functional software product.

    Author
    Mykyta Semenov
    CEO, SECL Group
    The CEO of a software development company called «SECL Group». Extensive experience in web development since 2002. An author of numerous studies and articles, a speaker at industry conferences, and an independent consultant for commercial companies and government agencies.

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