Offering flexible priced solutions requires more than switching pricing parameters. It requires sound and attractive product bundles (machine, services, digital solutions, spare parts, performance guarantees) and value-based pricing solutions, that are integrated with the existing data, accounting processes and financing infrastructure. Different organizational units such as sales, product development, aftermarket service, controlling, finance, treasury need to be aligned and orchestrated to move from product sales (and rental) only to value-based solutions.
Two fundamentally different transformation paths can be adopted to drive the change:
- A “concept-driven” approach, following the “target image, gap analysis, concept, implementation” principle.
- A “use case” approach, based on an agile “design, learn & transfer” logic. Use cases are rapidly developed and piloted according to the strategic priorities. Based on the results of the pilots, use cases are transferred to other customer segments and product areas and the next wave of solution offerings.
Most customers prefer the pragmatic step-by-step “use case” approach because it allows for testing market success, the customer response as well as the “right„ configuration. This provides comfort before investing into larger scale implementation with infrastructure build out and changes of organizational structures. Implementation and market risks will be managed, and misallocation of resources avoided.
Developing a commercialization strategy for the Equipment as a Service offering requires answering three types of questions:
- Portfolio decisions set the focus on the most promising customers solutions, customer segments and partners and providers to start with.
- Value decisions describe the approach how to create value for the customers, how to share and monetize the value created and how to manage the risks involved with the offerings.
- The transformation pattern decisions lay out how to move form first successful pilots or implementations to a scalable business model. This also involves the question of how to structure and refinance the offering, since manufacturers as well as customers typically to not want to inflate their asset base.