Automotive Industry

How Daimler Mercedes was able to cut 2% discount budget

Mercedes-Benz Daimler is one of the biggest producers ofpremium cars and the world's largest manufacturer ofcommercial vehicles. Headquartered out of Stuttgart Germany and ranked 24th on the global Fortune 500. Daimler employs 290,000 staff with a dealer network of more than 1,000 worldwide.

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Case Studies

Details

The ultimate challenge laid in the fact that Daimler needed an agile single source of truth, that would allow the aggregation and correlation of data coming from 27 systems (both in-house and external systems).

At Daimler Mercedes we believe the future of mobility is electric. Because of the advances in battery technology and great consumer acceptance we have been heavily pushing in electric vehicles.  For this Daimler has set up a digital technologies division called CASE to incorporate connected cars, autonomous driving, car sharing and electric vehicles.

One of the tasks of the new department was to prepare the markets and regions for the launch of the electric vehicles. Edin Causevic as head of Sales Management and Sales Operations was responsible for the masterplan covering 64 different topics. This included what needed to be done in the showroom, what the customer needs to know or what needs the salesman to know. All of this to ensure that everyone was ready for the launch, including customers, retail and management.

One of the most challenging topics that needed to be addressed was the pricing model. This needed to be changed because the margins on electric vehicles are much lower than on a normal car. To resolve this an objective pricing model was needed that could take all the relevant factors into consideration while managing the interest of the consumer, the dealers and the head office.

Challenges

While working on introducing the all new Mercedes Benz electric fleet, the CASE division (Connected, Autonomous, Shared, Electric) was tasked with developing a Sales Manager Support Platform. Doomed by an 18-month unsuccessful trial and error approach, Daimler had to turn to a fully evolutive platform that could solve their ongoing challenges but simultaneously accommodate for future requirements.  The foreseen objective of this platform was to enable sales managers around the world to make accurate decisions when releasing new pricing models or introducing sales campaigns based on specific market parameters. The ultimate challenge laid in the fact that Daimler needed an agile single source of truth, that would allow the aggregation and correlation of data coming from 27 systems (both in-house and external systems). In parallel, the platform needed to monitor and report all relevant competitor data, coming from 6 pre-defined competitors. Once all the disparate data sources were centralized, Daimler needed to digitally model sales processes that would introduce an algorithmic approach to decision making.

Prior to establishing a strategic relationship with Keross, Daimler’s challenges were:

  • 4 vendors prior to Keross failed to deliver the SoW
  • Manual consolidation of data coming from 27 systems
  • Each system has a variety of different versions, configurations and languages based on geography
  • Not being able to meet contractual deadlines
  • Teams of 5 people per region used for manual data aggregation and reporting
  • Only 8 of 27 systems were able to communicate via API’s
  • Inability to aggregate and correlate actionable market intelligence in real-time
  • No scalable framework that could accommodate the embedding of their sales algorithm with a structured data feed
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Business Impact

The developed sales manager support tool enabled sales managers to make the right decisions in terms of defining the pricing, within seconds.

Solution

Keross was able to demonstrate the achievement of the first milestone in less than 2 weeks. Ikon integrated the 27 systems, structured all the required data to be fed into the algorithm and created a library of visual outputs. This enabled the experts to review and enhance the algorithm in real time. The second milestone comprised of delivering a multi-tenant Sales Manager Support Platform, through which all sales related decisions would be taken. The sales managers profited from having all key parameters available at their fingertips, allowing them to make very informed decision when deciding on the final amount to be introduced as a sales discount.

The entire solution was successfully delivered remotely by Keross’ experts, without any face-to-face workshop to maintain low cost.

Now, Daimler benefits from a 2% saving in the total discount budget while achieving an ROI in under 6 months.

  • Single source of truth, comprising of 27 internal and external systems (both in the Cloud and On-Prem) along with all competitors data
  • Automated data structuring and feeding into algorithm
  • Real-time dashboarding of sales KPI’s
  • On-demand or scheduled reporting of sales campaigns per dealer, country, region or volume
  • Releasing manual workload of more than 35 staff
  • Scalability and region-specific future proof
The results of the pilot phase in the US showed a savings potential of 2 percent discount budget a year, which is a massive number and hundred times the return on the investment.

Edin Causevic. National Manager, Sales Operations, Mercedes

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