When Willem Groenewald took over as CEO of the Automobile Association of South Africa (AASA) two years ago, the not-for-profit organisation was 90 years old and in dire need of an overhaul. Being a turnaround specialist he realised that an ageing Membership base and a lack of clarity around what the AA actually does meant that a lot of work had to be done to give the brand new relevancy and to connect with a younger market segment.
“The work is ongoing to win the hearts and minds of new customers, especially the younger market, while also providing excellent quality service to our most valued corporate customer base. Product and service diversification was required in the business to move away from the brand being perceived as a being only roadside assistance business.”
Most people talk about the AA as a service that their grandfather or dad used to have, but Groenewald decided to move away from that and use emerging technology to change this narrative: “I wanted to change how we connect with the public, creating something that provides more value for our Members and corporate customers, and more touch points that we can use to engage and interact with our customers. Our loyal member base is extremely important to us — they are the core and foundation of our business.”
The aim, adds Layton Beard, Spokesperson for the AA, is to move away from just being a traditional automobile association — which Members join to enjoy certain benefits related to the ownership of a vehicle — to something much more, providing support across every aspect of a motorist’s life.
Groenewald says the idea is to create a “movement” — developing and showcasing the different services the AA has to offer. Today, the AA’s different offerings typically fall under five key pillars. Firstly, the AA’s conventional business provides mobility services such as roadside assistance, with access to medical support where necessary. The second pillar, says Groenewald, focuses on the services offered across the brand’s AA Auto Centres. These facilities include car services and provide the analysis and validation reports needed to prove that a car is in good working condition before it is bought or sold. The third pillar incorporates the AA’s financial services offerings, including insurance, service plans and warranty products.
The fourth pillar is the technology side of things. As part of their efforts to transform the business, the AA is building a connected environment — called AA Connected.Me — which provides products and services like vehicle telematics and connected devices such as GSM panic buttons. The AA’s Connected.Me offering includes asset trackers, which can be used to keep track of your valuables, or even to keep tabs on your loved ones. It also provides AA Connected Vehicle functionality, which can be used to do everything from monitoring vehicle health and setting up geo-fencing to tracking driver behaviour and analysing vehicle performance.
“I wanted to change how we connect with the public, creating something that provides more value for our customers and more touch points that we can use to engage and interact with our customers.”
The AA also offers a Connected Home experience, which turns regular homes into smart homes via smart geyser solutions and electricity, water, geyser and security tampering management systems.
Finally, the AA has an accommodation network nationwide where ratings are applied to different venues. Incorporated into this the travel-related offer is the issuing of International Driving Permits (IDPs), and “Carnet de Passage”, an international customs declaration identifying a vehicle that can be used for cross-border travel.
So, what is enabling all of this innovation?
“For us, Huawei is an execution platform, enabling us to deliver all of these services,” notes Groenewald. Before partnering with Huawei, the brand had a very scattered environment, with physical hardware and backups sitting on-premise. The challenge with this approach, he explains, is that they had to duplicate all of the data stored on these physical devices and then store it elsewhere: a massive expense.
“Using cloud technology, Huawei has helped us to consolidate all of these platforms from a hosting and capacity perspective so that it is possible for us to scale and move forward with our future plans.”
According to Jay Zhou, Managing Director of Huawei Cloud South Africa, we live in a continuously evolving world, and all companies must be aware of new ways of working and leverage new forms of technology if they want to survive in the future. “Today, digital transformation is a means of survival. Cloud has a key role to play in this transformation. Companies that embrace the cloud can bring new offerings to market quickly, they can innovate easily and they have the ability to scale as and when they need to do so. But migrating to the cloud demands that the business adopt a different business-technology model, which can be difficult to get right without the support of the right technology partner.”
Today, the AA is a very different business. “All but one of the innovation pillars I mentioned earlier didn’t exist just two years ago. Our service centres, financial services offering and our Connected.Me products are part of our business optimisation efforts, none of which would have been possible without the technology and the support of Huawei Cloud,” says Groenewald.
For Huawei, joint value creation is the goal. “When value is created both for the customer and the supplier, then a supplier like us works with a customer in a totally different way,” says Zhou. “Working together achieves things that end up being so much better than anything we do alone.”
Having executed his first cloud migration back in 2006, Groenewald is well versed in the value that can be gained and the efficiency that can be realised via virtual environments. He’s not alone. The global cloud computing market is expected to rise in value to more than $947-billion by 2026; industry experts forecast that around 80% of organisations will migrate to the cloud by 2025. In South Africa, cloud adoption is expected to grow up to 25% annually and generate revenue of as much as $1.5-billion by 2024.
“From a cost optimisation perspective, cloud just makes sense. Cloud also allows us to access a larger pool of data and storage, which makes it possible for us to scale our business,” Groenewald says. “From a business continuity and data recovery perspective, having a cloud solution is a good business decision, because it reduces the risk of physical disasters. If you’re conducting business in the 21st century, you have to move with the times and, as part of this, I firmly believe that you have to have a cloud solution in place.”
This strategy could also enable the brand to reach a global market. As a member of the Fédération Internationale de l’Automobile (FIA) Region 1 management council, Groenewald can connect with about 150 other automobile clubs across the globe. “As we build our digital capacity and enhance our capabilities into the future, we have the option of selling software licensing agreements to other similar clubs globally; clubs that have been around for a long time and that face the same challenges we faced just a few years ago. The beauty of what Huawei Cloud offers us is that by white-labelling our solution, we can allow others the option simply to dial into our cloud platform and, as such, we can sell our software to other clubs around the world. In this way, software could become a new revenue stream for us.”
“For us, Huawei is an execution platform, enabling us to deliver all of these services.”
As industries change and technologies evolve, businesses need to realise that being competitive in the future is made easier when you have help from others, notes Zhou. “We already know that the age of digital transformation demands that companies collaborate in order to survive and grow. In any strategic partnership, if you are open and honest about where you want to go and how you want to get there, the right partner will know exactly what to do to help you achieve your goals as quickly as possible.”
A question of culture
When you change processes and challenge the status quo, your people have to buy into it or your efforts won’t get off the ground, says Groenewald, which is why making such a big, bold company culture shift can be difficult. “We’re an old business. If some kid comes along and questions the way you’ve been doing things for 90 years, it’s understandable that you’d be a bit put out by their suggestions and ideas. Mitigating this uncertainty comes down to illustrating and demonstrating the benefits that the change can bring.”
Speaking of culture, in his early interactions with Huawei, Groenewald was struck by the brand’s collaborative culture. “It really impressed me that they wanted to work alongside us to improve how we do business. Whenever we meet with them, they ask how they can partner with us and they are always so willing to introduce us to products and solutions beyond their cloud hosting offerings.”
A prime example of this can be seen in the AA’s call centre environment. According to Groenewald, Huawei technology is currently being investigated as an enterprise-wide solution for the AA. He says Huawei’s willingness to introduce proof of concept discussions are underway. “We are yet to engage with another service provider that is willing to go the extra mile in this way,” he says.
Platforms and partnerships like this, adds Groenewald, allow the AA to access best-of-breed future technologies. “Bringing robotics and automated call centre systems into our environment could enable us to open up different digital channels of communication that will make it possible to interact with Members on a more personal level and provide a better user experience.” In alignment with their other digital efforts, the goal is to deliver continuous and sustained optimisation of their IT cost environment.
“South Africa and our South African customers remain an important market for Huawei and the company is committed to strengthening relationships with partners across the region,” says Zhou. Last year, Huawei Cloud unveiled plans to increase its market share in South Africa and Africa via strategic investments and collaboration with the right partners. “As part of this commitment to South Africa and the African continent, Huawei seeks to support and enable our local customers to achieve their best results by equipping them with the best technological advancements the industry has to offer.”
For the AA, one of the main benefits of the partnership is that it has allowed them to optimise their costs by significantly reducing their capital expenses (Capex).
“With this approach, we’re not just seeing a once-off benefit based on the changes we’ve made. This partnership is delivering sustained improvement across our environment. And as we enhance and continue to build using the Huawei platform, we become more and more efficient, which means that our IT costs will either remain the same over time or they could even decline in the future.”
According to Groenewald, the AA is in the process of an important turnaround from where it was just two years ago, and this process is a work in progress, ultimately all to the benefit of Members and corporate customers.
“Perhaps I’m old fashioned but when I pick a partner, I want to stick with them for the long haul so that we can learn and build together, and this is where I think we’re headed with the team from Huawei.”
“Working so closely with the AASA team, we really do admire their commitment to digital transformation and appreciate all the work they have put in to turn their business around and become a digital success story,” concludes Zhou.
But there’s still a lot of work to be done. In 2022, Groenewald hopes to gain on the traction he has already created by optimising the business. He says: “Anyone can cut costs, but our focus in 2022 is to provide customer service that people start talking about and that makes people feel delighted and excited to work with the AA.”
Beyond roadside assist, how the AA is starting a movement
Layton Beard, Spokesperson for the AASA, says the organisation wants to be a voice for ordinary South Africans on all things affecting traffic/transport legislation and road safety. This includes pushing for the scrapping of the e-toll system and the repayment of monies to those who have already paid, and educating and informing the public on matters relating to vehicle safety and maintenance. The AA is very actively engaging with government and other key stakeholders on important legislation such as the new National Road Traffic Amendment Act, which prohibits alcohol consumption by all motor vehicle operators on South African public roads by setting the legal blood-alcohol limit for drivers at 0%. The AA’s efforts also extend to championing important initiatives like the 3 500 Lives campaign and the #ISeeYou campaign, which seek to educate the public about their role in road safety, be it those driving vehicles or pedestrians.