If you talk to any high-tech industry leader who has launched as-a-service offerings, they'll tell you that Everything as a Service (XaaS) is unlike any other business model transformation. Rather than a one-time sales transaction, customers are signing up for long-term relationships that bundle services with the company's hardware or software products. XaaS often extends collaboration with partners who are also involved in service delivery. Companies need to think big at first, but they need to start small.
“Moving to an as-a-service model enables organizations to improve their business operations, starting from product design and pricing, to synchronized order fulfillment, revenue recognition and sharing, invoicing, contract management, and more. It will dramatically change the way we do things and keep our customers happy,” said Mirjam Whitman, Director. in Product Marketing, High Technology from SAP. “Our customers start with targeted pilots in one business area and then refine and expand their XaaS packages to monetize and maximize their competitive advantage. I see it.”
XaaS-led growth at Lenovo: Scale beyond the back office
The Everything-as-a-Service business model is integral to Lenovo's growth plans. Long known for laptops, phones, tablets, data center servers, and business solutions, the company's services-led transformation has catalyzed significant expansion of its non-PC business, which accounts for more than 42% of the company's revenue. I'm here.
“We are in a phase of rapid acceleration and are focused on expanding and improving our XaaS capabilities and business infrastructure,” said Lenovo Senior Vice President and Chief Information Officer and Chief Technology Officer of Lenovo's Solutions Division. said Arthur Hu, Head of Delivery. and service groups. “This effort includes a multifaceted approach that combines agile development, strategic partnerships, and continuous optimization to ensure our XaaS services meet the evolving needs of our clients. Masu.”
Hu said SAP Billing and Revenue Innovation Management provides Lenovo with the flexibility to monetize its services through pay-as-you-go, subscription, consumption-based, and outcome-based models. For example, the company can build pay-as-you-go packages that are priced based on a customer's power consumption, gigabytes of storage, utilization, and number of nodes in the installation.
“Redefine your product hierarchy for the as-a-service world. Update financial accounting for managed services, including revenue recognition and cost accounting. Give your sales team a clear understanding of your products and drive value to your customers. Please be sure to communicate clearly,” Hu said. “Ensure all affected systems have unified data for accurate and timely fulfillment and entitlement that provides optimal customer experience and desired outcomes.”
Personalized XaaS products generate revenue for Autodesk
Autodesk offers customers both subscription-based and usage-based models for nearly all of its products in 50 countries. Autodesk uses his XaaS to future-proof the company as a world leader in the media, construction, engineering design and software industries.
“As-a-Service provides a scalable, agile foundation that delivers better outcomes for customers and generates consistent revenue for the company,” said Sudhir Misal, senior director of engineering at Autodesk. “SAP solutions are the backbone of our as-a-service business model, helping us cost-effectively manage orders, integrated invoicing, contract accounting, and the financial supply chain. For example, quarterly closes. We reduced the time by over 80%.”
Missal agreed that a successful XaaS strategy requires a shift in mindset.
“Understanding the business context behind the product requires working closely with the system provider (in our case it was SAP). We focused on standardizing as much as possible. ” Misal said. “Change management was a top priority as we navigated this journey involving all stakeholders. By talking to our peers and hearing their learnings, we avoided repeating the mistakes others made. ”
Generative AI promises dynamic innovation
No discussion of high-tech innovation would be complete without mentioning the importance of generative AI. Misal said Autodesk is exploring how AI can help enterprises quickly test and deploy value-added XaaS products.
“Generative AI can analyze data to help organizations see how their customers are behaving in response to the services they are using,” Whitman said. “Data from generated AI can help businesses cross-sell and upsell personalized services to individual customer preferences, increasing customer loyalty. With faster market demand insights , businesses can dynamically adjust XaaS bundles and iterate on new ideas to take advantage of new opportunities ahead of the competition.”
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