Momchil Kovachev, Chief Digital Officer (CDO) at Inter Cars, on the digital transformation in the automotive industry and the impact of COVID-19...
Joining the company in 2011, Momchil Kovachev is the Chief Digital Officer (CDO) at Inter Cars. “I graduated from the German Faculty at the Technical University at Sofia, Bulgaria, which means that I have studied in both the Bulgarian and the German education system. For the engineering track, I have a diploma from the Karlsruher Institut fur Technologie [KIT] and an MBA from the TU Braunschweig. Currently I am completing my executive MBA at Sheffield International College,” comments Kovachev. Since joining Inter Cars – an import and distribution organisation of parts, tires, accessories, professional tools and service equipment for vehicles – Kovachev has held several positions in Bulgaria as well as international positions before taking on the role he has now.
When asked about the current trends in the industry, Kovachev explains that “as with so many industries, one of the hot topics at the moment in our sector is data. For the automotive aftermarket industry, the data produced by the vehicle itself, and by the person driving it, is providing greater insight into how that vehicle is performing. This use of data for preventative maintenance and early diagnosis is a leading topic currently. It allows companies to have the right stock when the vehicle enters the workshop so that it can be repaired as fast as possible, eliminating technical issues for the driver.”
However, with the possession of more data comes the challenge of developing a legal framework for sharing and processing it. Kovachev reiterates his belief that “this focus will shape the next business models. This is a building block for future, digitally enabled Mobility-as-a-Service concepts.”
When it comes to driving innovation at Inter Cars, Kovachev explains that the company differentiates itself from its competition in the import and distribution industry of spare parts through its wide portfolio of vehicle products, fast logistics services, end mile delivery and good customer service.
When looking to innovate within the modern era of digitalisation, Kovachev explains that “technology gives us the capability to drive more value for the recipient of the product that we are distributing. As a result, we work with our partners and clients to develop business models that provide added value to all actors in the vertical - the driver of the vehicle, the wokshop and the distribution partners. We are also experimenting in some markets with B2C solutions, where our main goal is to offer a complete service to the retail client, rather than just purchase of the parts, therefore we call this approach B2B2C.
“What is important for us – especially today – is to help society maintain the operation of its mobility solutions, providing continued stability of those services. With that in mind, we are continuously trying to optimize our hosting solutions for our B2B ecommerce solution, leveraging the advantages of a cloud hosting platform. However, to ensure business continuity, we are also combining this with hosting this platform ourselves forming a hybrid hosting solution aimed at business continuity for optimal operations cost.”
Inter Cars’ digital transformation strategy has been applied to several aspects of the company to digitise and automate its operations. “My role of joining the head office team was to design and deliver the third generation of our fundamental B2B ecommerce solution. When we were starting the program, we identified several areas where we needed to improve our current operations, so that we could deliver a leading solution. One was how we manage our product data. As part of our operations we manage a large portfolio of products and vehicles, as well as their linkages, which can prove challenging. We decided that if we are to bring to the market a new generation of ecommerce solutions that act as a catalog for spare parts for a given vehicle, we need to improve the way we manage our product data,” says Kovachev.
Inter Cars has also been working on developing a single solution for its B2B services and products, as well as launching a new program that affects the way it gives permission to access the B2B solution. This ensures that it meets GDPR regulations by providing focused and precise access to data that clients require.
“Our B2B ecommerce catalog is a fundamental building block in our operations, generating 99% of our revenue,” comments Kovachev. “It is being used by our clients daily who are in need of spare parts so that they can repair vehicles that are entering the workshops. On the flip side, that same platform is being used by our sales operators when a mechanic needs support to identify a spare part needed for a repair, then agreeing with the client the delivery method and the payment method before processing the order.
“When designing our new e-catalogue we conducted research in order to optimise the user experience by designing the processes in the application to be more streamlined and intuitive. With this new platform we have been able to increase our service quality by releasing time for our sales operators to serve those who really need assistance, as well as providing a streamlined method and self service capabilities. We have also been able to increase transparency for the vehicle owner – by improving the spare parts identification process workshops can provide a more transparent quote.”
To successfully achieve its B2B program launches Kovachev explains that, for the first time in its history, the company decided to build a solution on top of a readymade platform in house from scratch.
“To develop the solution, we ran a tender where we invited all the industry leading e-commerce service providers in the world to participate. In the end we selected tools, platforms and software houses to modify the platform according to our needs. After the proof of concept phase, we selected SAP Hybrid together with the Polish software houses, e-point. Our colleagues from Microsoft came on at a later stage where the platform was already in nine markets in central and Eastern Europe. We selected their cloud hosting solution, which we already used for our previous version of our B2B commerce catalogue. Using these solutions we are focusing our customisation efforts into the areas where we have a competitive advantage, therefore strategic alliances and partnerships with players in that industry are a significant enabler for our digital transformation.”
Considering the future use of technology in the automotive industry, Kovachev is keen to see an increase in the use of augmented reality. “From one perspective, the complexity of repairs is increasing continuously, and I believe guided repairs with the support of augmented reality would be a very interesting usage case of the technology. For example, if a mechanic in a given workshop is receiving a repair for a car that he doesn't have experience with, in our B2B e-commerce catalog this person could read how to perform the repair. However, I believe the use of augmented reality could bring this information directly to the mechanic while looking at the vehicle, pinpointing exactly what needs to be done. This would be a very interesting use case of this technology in our industry. Additionally, a topic that is really inspiring me personally is the shared economy. I believe this is something that we as society have to address in order to move forward because of all the environmental and sustainability challenges that we're facing.”
As an engineer, Kovachev strongly believes in technology, “for me, it is the driver of progress in our society over the last decades. However, technology has to be wisely used.”
Reflecting on the current impact of COVID-19, Kovachev says “the situation has touched all industries. Luckily for us, the mobility industry is considered fundamental so that our society can operate. As a result, many of our businesses have remained open and while some of our clients have closed due to government regulations, many have also remained open in order to sustain this mobility. In recent months we have seen an increase in personal transportation compared to using public transport which has had a positive effect on the spare parts industry. However, in the long term, we can see that investments in new vehicles are going to stagnate and therefore from my perspective vehicle manufacturers are going to face challenges when it comes to aging car parts that are not going to be renewed with the same rhythm that it was a few months ago.”
When it comes to technology, “I can speak of my private experience. Prior to COVID-19, I flew from Sofia to Warsaw at least once a month. However, due to the situation over the last three months, this was not the case. We still continue to do business and we still continue to collaborate, thanks to video conferences and collaboration platforms offered by the software companies. Still for me, human interaction will be needed and therefore, personal mobility needs to be preserved.”
Towards the end of 2019, Kovachev explains that Inter Cars’ warehouses were quite full, “which helped us to make it through the disrupted period for supply chains with minimal interruptions.” In addition, “due the fact that we operate in 18 markets it is helping us to balance between the impact of COVID-19 in different markets.”