Ducati Redesigns Its Operations Company Overview

 Ducati Motor Holding manufactures motorcycles known worldwide for their precision engineering, lightning speed, and sleek design and for customers who are passionate about their motorcycles ( Table 9.1 ). Six models make up the product lines, with prices starting at $15,000 to the $90,000 Superleggera Superbike, which produces up to 200 HP at the crankshaft. Ducati is owned by Audi through its Italian subsidiary Lamborghini. Its 2013 net sales were $518 million.

TABLE 9.1  Opening Case Overview

  

Company	Ducatiusa.com and Ducati.com  Founded in 1926, the company has 1168 employees.  Ducati’s main factory site and headquarters are located in Bologna, Italy, with an additional assembly factory in Thailand.
Industry	Racing-inspired motorcycles characterized by “Desmodromic” performance engines and innovative design and technology.
Product lines	Four models: Diavel, Hypermotard, Monster, Superbike, and SuperSportter.
Digital technology	New dealer communication application for mobile devices called DCS or Ducati Communication System. The interface lets dealers easily find, send, and receive all the information they need to place orders and track them through production and delivery. The high-performance global communication system serves more than 5,500 users worldwide in seven languages.
Business challenges	Because of competition and tough economic conditions worldwide, motorcycle dealerships had to offer customers better value and after-sales services.

  Awards

In March 2014, Ducati received five awards at the annual Motorrad des Jahres (Motorcycle of the Year) event in Stuttgart, Germany. Ducati’s Multistrada and Diavel were awarded Motorcycle of the Year in the Allrounder and Cruiser categories, respectively ( Figure 9.2 ). Ducati’s models are benchmarks in innovative design and technology.

FIGURE 9.2 Ducati’s Multistrada and Diavel were awarded Motorcycle of the Year in 2014 in their class for their innovative design and technology.

 Product Lines

In addition to six motorcycle brands, the company sells parts, apparel, accessories, and other items to create the Ducati experience. Dealers need to be familiar with thousands of products and customization options for their customers.

 Business Challenges

Companies worldwide were faced with tougher competition and economic conditions after the financial meltdown in 2008. And as global manufacturers, geography was a marketing challenge.

Internally, its sales staff struggled with conflicting or outdated data on product inventory, availability, and ordering time schedules. The source of the problem was multiple communication systems and data silos that were not coordinated.

To resolve these challenges and grow the business, Ducati focused on the following:

1. Improving the sales process
2. Engaging the customer in the design of its motorcycles
3. Decreasing the cost of operations

The plan was to redesign dealer operations, business processes, and communication tools to align them with leading industry practices.

 Partnership with Accenture and Apple

Ducati selected Accenture to help redesign operations and processes and to roll out a new integrated communication application for its dealers worldwide. Ducati equipped its sales network with iPads and developed a custom in-house app called DCS or Ducati Communication System. The DCS app gives dealers a single point of access to Ducati’s back-end systems. The DCS is an SAP-based interface used by dealers to easily find, send, and receive data necessary to place orders through a point-of-sale (POS) device and then to track orders through the production and delivery processes. (SAP is a global software company that specializes in Enterprise Resource Program (ERP) applications.)

Authorized dealers receive updates directly through the Apple App Store. They also have access to a configurator app on their iPads to configure a customer’s dream motorcycle. An e-mail detailing the customized motorcycle and accessories is then sent to the customer. Dealers communicate in real time with colleagues and complete the sale without delay.

 Intuitive User Experience

The familiar user experience was designed to be the same for desktop computers, iPads, and iPhones.

Cristiano Silei, vice president of Global Sales at Ducati, said: “It was clear from the start that iPad was the right device. It’s the simplicity, the immediate usability. Everyone understands how it works in just a few minutes.”

Visiting a dealership is a very emotional experience for customers. Dealers want to make the experience unforgettable. According to Silei, the iPad helps gives the future Ducati owner a richer experience.

In addition to providing real-time sales support, the DCS app on iPad acts as a training interface to keep dealers updated on Ducati’s evolving product line. A change management program helped dealers transition smoothly from the old solution to DCS. DCS was quickly embraced by Ducati dealers, whose positive feedback included comments such as “It’s a game changer” and “a great time saver.”

 Performance Improvements

Ducati’s high-performance global DCS was deployed in 88 countries across four continents. DCS serves more than 5,500 users worldwide in seven languages. By leveraging dealer communication, Ducati is able to capture and consolidate local and global sales activity, spare parts, warranty, and service activity. As a result:

• Ducati is able to capture and consolidate local and global sales activity, spare parts, warranty, and service activity, improving the company’s ability to respond daily to changing consumer demand.
• Dealers run all parts of their business and have a robust tool to execute their operational, growth, and customer objectives.
• Dealers respond more quickly to customer demands and market conditions, making each dealership easier for customers to do business with.
• Dealers are equipped with leading practices for their processes to help them better serve customers in a simple, streamlined manner.

The dealer system is one of the most innovative and effective user experiences in the industry. It is user-friendly and sleek and reinforces Ducati’s brand.

Questions

1. What pressured or motivated Ducati to implement new digital technology?
2. What costs could Ducati cut? What costs could it not cut? For example, could Ducati cut its R&D budget? Explain your answers.
3. Why did Ducati need to improve communications with dealers?
4. Explain the capabilities and benefits of the DCS.
5. Why was it important to implement a change management program?
6. What other factors contributed to the success of DCS? Explain their contributions.
7. Visit the Apple iPad store at apple.com/ipad and search for “Ducati.” Review the Ducati Communication System app. Explain how the DCS app gives the future Ducati owner a richer experience.