![]() The first involves the rapid expansion of the software and electrical/electronics market, which is expected to have a CAGR of 12 percent from 2020 to 2030-more than three times the expected growth for general automotive sales. Several trends highlight the growing importance of automotive software. By the numbers: How software is taking over The insights are also based on information gathered through extensive interviews with technology experts and a large-scale software benchmarking exercise involving McKinsey’s proprietary SoftCoster database. ![]() ![]() This article shares our key beliefs and insights gained from working closely with automakers, suppliers, and other ecosystem partners. With so much at stake, automotive players should rethink their entire approach to software development, including the underlying operational model. Areas of concern include agile practices, continuous integration, and automated testing.īased on our research, only 40 percent of the R&D leaders who view software as a major disruptor feel prepared to make the necessary operational shifts. While leaders across industries have made step-change improvements in their software engineering practices, most automotive players still significantly lag behind high performers. Based on our research, only 40 percent of the R&D leaders who view software as a major disruptor feel prepared to make the necessary operational shifts. We believe these steps are insufficient, however, since real change will only come when automakers update their underlying operating models for software development. ![]() Some are planning to step up their software capabilities and hire thousands of software engineers over the next few years, while others are redefining their governance models, setting up partnerships, and globally ramping up centers of excellence. Many automotive players are aware of the advantages that come with strong software development and are now taking drastic steps to improve performance. That is a far bigger productivity difference than the one between hardware developers. 1īased on information from McKinsey’s proprietary SoftCoster database, which includes more than 14,000 software-development projects across industries. Our research shows that the divide between strong software organizations and less capable groups is significant, with top companies reporting throughput and quality that is three to six times higher than that of bottom performers. ![]()
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