Digitization of the Automobile and What the Toyota Recall Tells Us

This article in WSJ is timely for our course.  I am reproducing some paragraphs that are relevant to our discussions about the shape of impact and influence of IT strategy on business strategies. 

With each model year, vehicles are morphing into powerful, computerized machines that substitute electronic brains for the brawn of heavy bodies or gas-guzzling large displacement engines. The downside of this 30-year evolution is that for many people, cars are becoming scary again. The new, electro-digital automobiles are difficult for laymen to comprehend or repair. Their failures can be impossible for even experts to diagnose.

--Today, gas pedals are no longer levers connected to cables, but switches in a chain of electronic relays that dispense fuel to the engine in precise ratios to maximize fuel efficiency and minimize noxious exhaust. This is what allows a modern six-cylinder engine to produce more power than many a 1970s V-8.

Brake pedals send signals to computer-controlled systems that apply stopping power faster and more accurately than almost any driver could. In the most advanced cars, such as a Mercedes-Benz E Class sedan, radar-enabled cruise control, electronic brakes and electronic steering can combine to stop a car safely to avoid a collision even when the driver is distracted or dozing. The new E-Class can have as many as 11 airbags, all controlled by electronic sensors. An optional seven-speed transmission uses a computer to match the engine revolutions to every gear shift. The seats can even adjust to compensate for a hard right or left turn.

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A high-tech "green" vehicle such as the Toyota Prius or the Ford Fusion hybrid can't function without computer controlled systems that tell the brake system when to capture energy to regenerate the batteries, or when to just stop the car.

But where there's software there are often bugs. That's why Ford Motor Co. is telling customers it plans to reprogram certain Fusion hybrids to fix a glitch that can cause consumers to feel they have lost stopping power. Toyota says it is moving toward a similar software fix for braking complaints lodged against the 2010 Toyota Prius.

Some Prius and Fusion owners may be encouraged to know that a problem with their car can be fixed by a software download. Others will wonder whether they can trust a car that could malfunction because of some random software misfire, the way their company-issued laptops are wont to do.

"We are in the learning curve on these systems," says David Champion, the head of vehicle testing at Consumer Reports, which first reported on the problems with the Fusion Hybrid last week.

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Auto industry will not be alone in trying to grapple with the shift and learning in the face of adversity.  Many other sectors will face similar challenges. The winners will be those that see the increasing nexus between IT and business strategies.