As business leaders look for ways to accelerate growth in their organizations, one emerging strategy to support prosperity, involves leveraging digital business models to position the organization for growth. These Anything-as-a-Service (XaaS) business models let you transition your operations from a product-based approach to a service or outcome-based approach enhancing your business’s value to the customer and improving your overall revenue structure.
Every digital strategy, including an XaaS transformation, has to be crafted with exceptional clarity and the full commitment of the CEO. Four key attributes that fuel a successful digital XaaS transformation include:
XaaS doesn’t mean the same thing to every enterprise. A variety of different monetization approaches are available under the XaaS banner, including these five major strategies:
Buyer pays a flat recurring fee independent of usage. This strategy is easy to manage and plan for financially, offering steady revenue – but costs may be higher than expected if customer usage is underestimated.
Similar to a flat rate, but priced per user (or seat). This strategy is attractive in B2B markets with a large user base, but since the number of users can fluctuate greatly, forecasting revenue can be complex.
Customers pay based on each completed transaction or predefined process. This lets the business scale easily by adding additional features, but if customers do not use services as planned, forecasts can become uncertain.
Similar to payment per transaction, but pieced out in volume-based technical units (such as gigabytes consumed). This strategy is easier to forecast because costs are usually fairly elastic, but customers may not immediately recognize value when usage is calculated in this fashion.
Customer spends a certain amount per period to receive discounted pricing. While quite reliable for forecasting purchases, this type of strategy requires extra sales and marketing effort in communicating to customers how their subscription translates to value.
Digital model transformation doesn’t have to be a daunting, long-term process. PwC’s SAP-based XaaS-in-a-Box accelerator suite helps you weigh the options and build sustainable revenue models that align with your organization’s goals, giving you access to a collection of frameworks and preconfigured assets carefully designed to get you up to speed quickly and helping you to make the most of your existing SAP investment.
The Business Model Canvas helps develop your XaaS business model and associated use cases. Using this as a framework, PwC can help to methodically define your XaaS strategy.
The XaaS Reference Architecture accelerates the definition of the end-to-end solution architecture and key design decisions for your digital transformation.
The Process and Capability Framework helps define future state processes and capabilities to support your XaaS business model by focusing on three key areas: XaaS Offer Setup, Opportunity to Cash, and XaaS Offering Analytics & AI.
XaaS Industry Edge Preconfigured Journeys can help reduce implementation time and improve the quality of the solution.
Principal, SAP CX Competency, PwC US
Managing Director, SAP CX Competency, PwC US
Director, SAP CX Competency, PwC US