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Feb 22 2022

As a Service – top reasons why you should consider the model

As a Service (aaS), in basic terms, is something being presented to a customer, as a service. Let’s think about what aaS could look like in the real world.

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Picture the scene, it’s Saturday night, and you’re heading to the city to have an evening out. You don’t know where you’ll end up but one thing you know for sure is that you’ll need a taxi service to get you there. You open your phone, click on your local taxi company app, you input where you want to go, and a fare, route and driver are offered to you, you click the proceed button and five minutes later you are en-route for a night full of memories.

So how does this highlight the aaS model. Products that were once routinely bought outright – like cars – are now being sold and consumed based on new, imaginative metrics for usage, service, and experience. Car usage first moved from outright ownership, often with finance, to a subscription model – multi-year leasing – and now this has shifted again to a consumption model, where people no longer own or lease any vehicle, but instead opt for the convenience of taking a taxi, an Uber or a DriveNow car when they need mobility. Furthermore, there is no need for phone calls or getting cash out, but instead a product is presented to the individual who easily navigates through the app to get the outcome they desire through coherently structured endpoints.

The aaS model can apply almost anywhere. So let me illustrate some of the top reasons why you should think about aaS.

 

Agility

Let’s start with the concept of agility, being able to think and move clearly by doing something physically different or changing a process that doesn’t work. Businesses must be agile in order to keep up, survive and thrive in an ever-changing global landscape. Being agile allows companies to think of the capacity ahead of demand which can help ease the pressure on existing supply chains and supporting functions such as Finance, IT, Procurement and Legal who have to perfectly align to get the job done. The aaS model helps to reduce that supply chain challenge, gives time back to all involved and allows agility to become second nature.

 

Costs

A fundamental measure of success of any business is how well it manages its costs. Yet time and time again costs can spiral due to complexities in management and inefficient processes. One such example I’ve seen is the mistake made comparing 10 units of product vs 10 units of service. Ok this isn’t the worst offender but this approach can lead to mistakes in assuming all of the purchased units are 100% utilised on day one, when normally they are not. Therefore, you end up in a situation where you are paying upfront to grow into something, Of course the investment profile is different, but for most companies the additional service fees of aaS create more value than the traditional upfront investments in over provisioning would do.

 

Risk

Risk is everywhere and needs to be properly assessed. Through aaS one of the risks we look at is the risks of over provisioning (an increase in redundant and out of date stock) versus under provisioning (the business is kept waiting). Risks are unavoidable in life let alone business but by properly thinking about it and underpinning it in your business models, you can manage it more efficiently in order to keep up with customer demand – and aaS addresses this.

 

Ease of Management

We’ve all been there, we think we can do it all, that’s basic human nature. We spend 1000€ on furniture but refuse to pay the extra 50€ to have it professionally assembled. Why? Because we can do it ourselves of course! Or can we? Some can but most will wish they’d spent the extra bit of cash.

Although it does raise an interesting point. When we think about everything needed to achieve a successful outcome? Of course, we can do everything internally but what are the pros and cons associated with that. Is it time efficient, is there enough resource, is there a significant overhead associated, have you factored in the lifecycle management cost and risk? These are some of the key considerations aaS looks at to get the right mix of services to dovetail with your organisation, unburden your team from costly non-productive administration and move from operation to innovation to drive business growth. Ultimately making life easier.

 

Money in, money out

The last point is, in theory, an obvious one. Businesses to survive must make ends meet and then some. Job done right? Not quite. However, it’s a good basis to grow on. With aaS, it gets under the surface of a business model to drive cost improvements and looks at the wider picture.  For instance, going back to my taxi trip, the business only charges the user for the cost of the ride. They don’t charge them for installing or using the app. Similar, aaS can include all the cost that should be considered and there are no hidden costs that may be missed otherwise. This helps businesses properly understand what money is coming in against what it needs to spend to run an effective service.

As you can see the aaS model is potentially transformative for businesses of all sizes and industries as it looks to analyse the topics that matter. So please do reach out to me if you have any questions at all about aaS as I’d love to chat to you more about it moving forward.

 

Martin Shaw

 

About the Author:

Martin Shaw
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Head of Pay-per-Use, Product Business, Fujitsu Europe.

Martin Shaw is leading the development of innovative Pay-per-Use models for Fujitsu data-cente...

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