Enabling new business models, Persistent gets Bridgestone rolling on a new model

We often hear about the rise of new business models, it's always interesting to hear about how they're being applied to traditional sectors.

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Persistent Systems is a multinational IT services company. From a huge development center in India, the company builds technology solutions for a raft of high-profile companies. Oftentimes we hear about outsourcing IT to India and think about poor work, cost cutting, and suboptimal results. For Bridgestone tires, however, the experience seems to have been quite different. I recently had the opportunity to sit down with the CEO of Persistent Systems, Anand Deshpande, to talk about what his company does generally, and to look at one particular case study in particular.

Deshpande doesn't see his company as a source of low-cost, low-quality development. Rather, his vision for Persistent is to be a place where software is built that can fundamentally change the nature of its customers' businesses. Deshpande wants Persistent to be the catalyst for the "softwarization" of different businesses.

One stellar example of this in practice is in Bridgestone. Bridgestone is, of course, a massive, global player in the tire world. The company employs 130,000 people worldwide. It is easy to look at Bridgestone as a complex business, but with a simple model — it sells tires of all flavors across the globe. What can be changed about that?

Well, it seems even the tire business has scope for a new approach, and to this end Bridgestone worked with Persistent to drive a pan-European mobile strategy. Part of this strategy was to roll out a new business model, descriptively called tires-as-a-service. The concept is simple: Customers are charged by usage and wear and tear rather than a one-time outlay for a tire. With the new model, dealers and service engineers undertake inspections of tires on vehicles at various outdoor locations. For the system to work, data needs to be obtained regularly from thousands of vehicles across numerous fleets.

There are many challenges that Bridgestone needed to overcome. Capturing the tire usage data (millions of data points) on paper was inconvenient and messy due to the tough weather and working conditions, and often resulted in poor data quality. Lost or incorrect data resulted in high operational costs and loss of revenue. Other challenges included ensuring that data was captured only for the vehicles validated to be a part of the contract. The unavailability of real-time data added to Bridgestone’s program management challenges.

The high cost of operations and risks involved resulted in poor acceptance of the tire-as-a-service business model by dealers, creating a serious business challenge for the company. An efficient solution for easy and error-free data collection during inspections was desired. This is where Persistent comes in. The company proposed a new solution that enabled Bridgestone’s dealers and service engineers to efficiently collect and update data from vehicles, leveraging a handheld device.

To demonstrate the potential of a mobile solution, Persistent implemented a proof of concept application in four weeks, which was demonstrated to key stakeholders at Bridgestone. With buy-in from the end users, the actual solution development was undertaken. The solution was targeted for deployment at approximately 2,000 dealers (3,000-4,000 fleets) in more than 15 European countries — all integrated with Bridgestone’s centralized ERP and CRM applications in Brussels.

In terms of functionality, Persistent delivered upon the following functional needs:

  • Data entry and updates on the handheld device in disconnected mode, freeing the engineer from the need to have continuous, uninterrupted network connectivity
  • GSM/GPRS connectivity to allow users to access, upload and download information securely from the central ERP and CRM applications
  • Fax/email reports from the handheld device
  • Internationalization and localization for all major European languages
  • Rich interface with sound cues, optimized according to the end-user profile

The net result of the project was impressive. Bridgestone reports that the field solution delivered over an 800% improvement in productivity for its service engineers and dealers, by its own metrics. Cost and time savings and increased accuracy all add up to a successful new approach to how it runs its business.

Indian outsourcing is often unfairly characterized. This case study indicates that when the right partner is chosen, and when clarity around required outputs is apparent, the results can be impressive.

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