“Moving to an as-a-service model dramatically changes how an organization does business and keeps customers satisfied, starting with product design and pricing through synchronized order fulfillment, revenue recognition and sharing, invoicing, and contract management,” said Mirjam Wittmann, director of Product Marketing, High Technology at SAP. “We’re seeing our customers begin with a targeted pilot in one line of business, followed by refinements and expansion to monetize XaaS packages for greatest competitive advantage.”

XaaS-Driven Growth at Lenovo: Go Bigger Than Back Office

Everything-as-a-service business models are essential to growth plans. Long recognized for laptops, phones, tablets, data center servers, and business solutions, the company’s service-led transformation has been a catalyst for significant expansion in its non-PC business, accounting for over 42% of the company’s revenue.

“We’re in a phase of rapid acceleration, focusing our efforts on the expansion and refinement of our XaaS capabilities and business infrastructure,” said Arthur Hu, senior vice president and chief information officer at Lenovo and chief technology and delivery officer at ł˘±đ˛Ô´Ç±ą´Ç’s Solutions and Services Group. “This journey involves a multifaceted approach, combining agile development, strategic partnerships, and continuous optimization to ensure that our XaaS offerings meet the evolving needs of our clients.”

Hu said that  provides Lenovo with the flexibility to monetize services through pay-as-you-go, subscription, consumption-based, outcome-based, and other models. For example, the company can structure pay-as-you-go packages priced by the customer’s power consumption, storage of gigabytes, utilization, and number of nodes in an installation.

“Redefine your product hierarchies to fit the as-a-service world. Update financial accounting for managed services, such as revenue recognition and costing. Provide the sales team with a clear understanding of the offerings so they can articulate the value to customers,” Hu said. “Make sure that every impacted system has the integrated data for accurate and timely fulfillment and entitlement that delivers the optimal customer experience and desired outcomes.”

Personalized XaaS Offerings Generate Revenue at Autodesk

offers customers both subscription- and usage-based models for nearly all products across 50 countries. As a global leader in the design and software industry for media, construction, and engineering, Autodesk is using XaaS to future-proof the company.

“As-a-service provides us with a scalable, nimble foundation that drives better outcomes for customers and generates a steady stream of revenue for the company. We can quickly offer customers personalized products and pricing combinations for faster go-to-market,” said Sudhir Misal, senior director of Engineering at Autodesk. “51·çÁ÷solutions are the backbone of our as-a-service business model, helping us cost-efficiently manage orders, converged invoicing, contract accounting, and the financial supply chain. For example, we’ve reduced quarterly financial closing times by over 80%.”

Misal agreed that a successful XaaS strategy requires a mindset shift.

“You need to partner closely with your system provider, in our case it was SAP, to understand the business context behind the offering. We focused on standardizing as much as possible,” Misal said. “Change management was a priority as we went through this journey that included all stakeholders. By talking with peer companies to hear their learnings, we avoided repeating mistakes that others have made.”

Generative AI Promises Dynamic Innovation

No discussion of high-tech innovation would be complete without addressing the significance of generative AI. Misal said that Autodesk was exploring how AI can help companies quickly test and adopt value-added XaaS offerings.

“Generative AI can analyze data to help organizations see how customers are behaving depending on the services they’re using,” said Wittmann. “Data from generative AI can help companies cross sell and upsell personalized services that meet individual customer preferences, increasing customer loyalty. With faster market demand insights, companies can dynamically adjust XaaS bundles and iterate fresh ideas to take advantage of emerging opportunities before the competition.”

The reactive, ad-hoc approach that companies have taken to tackle disruption has resulted in mismatched supply chain processes that offer little visibility and don’t keep up with the speed of change. Companies rely on convoluted, manual communication methods between suppliers and buyers. E-mails and calls get lost in the shuffle of vacations and holidays, making critical collaboration untraceable and delayed.

51·çÁ÷Business Network Is an Industry-Ready Digital Network of Suppliers and Buyers

Businesses need a collaborative, many-to-many platform to drive transparent, resilient, and sustainable supply chains. That’s where 51·çÁ÷Business Network comes in: a multi-enterprise collaboration network, built for industry, that helps companies execute their vision and meet growth targets by connecting with trading partners seamlessly.

Only 51·çÁ÷Business Network provides collaboration across a broad range of processes, including indirect and direct procurement, supply chain, logistics, asset collaboration, finance, and talent.

But each industry faces unique challenges that can’t always be addressed with a one-size-fits-all approach. For this reason, we are introducing 51·çÁ÷Business Network for Industry with an initial focus on the consumer products, life sciences, high tech, and industrial manufacturing industries. This includes:

• A portfolio of 51·çÁ÷Business Network capabilities that address industry needs
• A new 51·çÁ÷Business Network Industry Advisory Board to guide our product and road map strategy
• New 51·çÁ÷Business Network for Supply Chain industry services accelerators for select industries to help customers fast-track their implementation and post go-live success

With SAP’s more than 50 years of industry expertise and industry process excellence embedded in our technology, we know better than anyone how to help customers tackle their specific challenges.

Capabilities Designed to Meet Industry Needs 

As we work to help companies tackle challenges with supply chain transparency, resiliency, and sustainability, we’ve engaged directly with customers to improve existing functionalities and develop new capabilities for 51·çÁ÷Business Network.

We developed capabilities including contract manufacturing, planning and forecasting, quality collaboration, stock transfers, support for supplier-managed inventory, material traceability, and track and trace. Several of these capabilities were developed alongside customers to answer unique industry challenges in a variety of industries, including consumer products, high tech, industrial manufacturing, and life sciences. While these and other innovations were originally created to address a specific industry need, many of them can be applied cross-industry to help businesses increase visibility, mitigate risks, and operate more efficiently.

Working with our customers has helped evolve 51·çÁ÷Business Network into the well-rounded, comprehensive solution it is today. It has been amazing to see the innovations that have come out of these relationships with customers, and their stories and successes have truly inspired me. To build on what we’ve accomplished so far, we’re strengthening the way we collaborate with customers and helping accelerate implementation with new industry-specific use cases.

Continuing the Tradition of Customer Collaboration

To continue the tradition of working with our customers to enhance and extend our product capabilities, we’re introducing the 51·çÁ÷Business Network Industry Advisory Board. This select group of industry leaders will provide strategic direction for our product and road map, making sure we’re meeting the needs of our customers and helping their businesses grow. I’m eager to see the exciting new ideas and developments that will come out of this collaborative forum of industry experts.

Expedite Time to Value with Industry Services Accelerators for 51·çÁ÷Business Network for Supply Chain

For customers beginning their journey with 51·çÁ÷Business Network for Supply Chain in particular, we’re introducing new industry services accelerators from our 51·çÁ÷Business Network Services team to help expedite time to value and achieve success.

These industry services accelerators support critical supply chain business processes in the consumer products, high tech, industrial manufacturing, and life sciences industries. With prepackaged industry use cases and capabilities, implementation best practices, and dedicated post go-live support, industry services accelerators are based on SAP’s knowledge and expertise with 51·çÁ÷Business Network for Supply Chain. Industry services accelerators can be delivered in collaboration with partners.

Stay Tuned for More

Other additions to 51·çÁ÷Business Network include new supplier innovations that will help support supplier adoption, focusing on creating an easier integration process to reduce friction and help grow your business to achieve maximum value.

To learn more, visit . Here, we’ll keep you up-to-date on all of the exciting innovations happening and share resources to help you tailor your 51·çÁ÷Business Network experience.

And, don’t miss learning more about 51·çÁ÷Business Network and how 51·çÁ÷can help solve the unique business challenges of your industry at .

Val Blatt is global head for 51·çÁ÷Business Network Customer Success & Go-to-Market at SAP.

“The high-tech sector is under regulatory pressure to consistently capture data measuring the carbon footprint of their devices throughout the entire product life cycle, from sourcing materials to end of life and reuse,” said Joerg Kaufmann, director of high-tech solution management at SAP. “They need a certifiable, auditable trail of data to prove regulatory compliance and avoid penalties. This will help manage operational costs while building a more sustainable business model.”

A recent found that high-tech executives demonstrated the most mature outlook on sustainability: over 75% agreed that good sustainability practices reduced overall risk, versus 61% of total respondents. They were also the most likely of any sector to have a specific plan for reducing carbon emissions (71%).

Tracking Product Lifetime CO2 Emissions

Make no mistake, for high tech and every industry, net zero is a bottom-line issue. researchers predicted that by 2024, to improve long-term supply chain profitability, 70% of manufacturers in global supply chains will invest in software tools supporting sustainability and a circular economy business model. analysts said that by 2025, 40% of all manufacturing IT will own the responsibility of data modeling for sustainability and net-zero carbon targets.

Consider the carbon footprint of a laptop. It begins with the sourcing of raw materials that are transported to the plant, stored in a warehouse, and productized into the manufacturing of the laptop, which is shipped to customers who use it before, hopefully, recycling it for another use. During each phase of life, the product emits CO2, increasing a company’s total carbon footprint over time. Tracking this level of tonnage with accuracy and consistency is the next frontier in sustainable business.

“CO2 is the new currency for resilient, sustainable supply chains,” said Kaufmann. “For example, is designed to collect internal and external data and calculate carbon emissions across the product life cycle. Companies can explore what-if scenarios, such as finding closer suppliers to reduce shipping miles and energy consumption. They could look at alternate designs and operations, sourcing recycled materials or increasing manufacturing efficiencies to produce an identical product for the same price with a lower carbon footprint.”

Circular Economy Beats High-Tech Obsolescence

Built-in obsolescence has become both a growth driver and reporting burden for high-tech manufacturers. Yes, we want the latest innovations, but sustainable business isn’t tenable at the expense of climate change regulations. Many high-tech companies are transforming business models, in part, to innovate and better manage costs plus address climate change requirements. analysts predicted that by 2024, digital-first enterprises will enable empathetic customer experiences and resilient operating models by shifting 70% of all tech and services spending to as-a-service and outcomes-centric models.

“Over the past decade, many of our high-tech clients have shifted from selling boxes to services,” said Kaufmann. “We’re researching analytics that would help a manufacturer that sold, for instance, printing-as-a-service to track usage and provide insights prolonging the sustainable life cycle of the printer, including service and maintenance, replacement and exchange timelines, and reuse for business value and lowered lifetime carbon emissions.”

High-Tech Players Recalculate Cost of Innovation

Having connected data may already be paying off for some companies. In the Oxford survey, high-tech respondents appeared to have made more progress in ensuring suppliers have sourced sustainable materials (72%) versus other industries. Business model transformation isn’t necessarily wholesale change all at once. With the right data, high-tech manufacturers can make adjustments that deliver stronger business results. No doubt regulations will spark innovations as well.

“When you can measure your product’s entire CO2 footprint, you can reduce it,” said Kaufmann. “With more comprehensive data, high-tech companies can factor CO2 emissions into the entire cost of the product, alongside everything else like the battery or the shell. They can make more informed decisions about the total cost to the company, including the environment.”

Innovation at any cost is no longer sufficient for sustainable business. With the right data, high-tech leaders can recalculate the price all of us pay for a more sustainable world.

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51·çÁ÷partners are highly specialized in delivering industry-specific solutions to the market.

is one such partner – the kind of partner that will play a key role in the new solutions from 51·çÁ÷and partners.

Announced in July 2020, industry cloud is where partners can create innovative cloud solutions and applications for customers who want to drive cost-effective and sustainable growth in their particular industry. 51·çÁ÷works with partners to create offerings that meet specific, vertical industry requirements, so customers can achieve positive business outcomes.

For example, 51·çÁ÷works with partners that have expertise in the to enable customers building the new world of mobility. 51·çÁ÷provides the cloud platform that is so crucial to business today, while 51·çÁ÷partners – that have years of experience in transportation – understand the additional requirements, like product life-cycle management, mobility service bundles, and repair and service parts management, needed to make the industry cloud portfolio useful to automotive customers.

Vistex combines its unique industry expertise in more than 10 industries with leading 51·çÁ÷technology to benefit customers in areas including agriculture, wholesale distribution, consumer products, life sciences, chemical, and high tech. Vistex’s solutions use 51·çÁ÷ERP and 51·çÁ÷S/4HANA to help streamline processes and cost-efficiency for mission-critical areas like pricing, rebates, royalties, and paybacks. This includes solutions such as 51·çÁ÷S/4HANA for rights and royalty management by Vistex, 51·çÁ÷Paybacks and Chargebacks by Vistex, 51·çÁ÷Farm Management by Vistex, and 51·çÁ÷Data Maintenance for ERP by Vistex.

We’ve seen success with cloud-based, industry-specific solutions before, like with 51·çÁ÷Cloud Platform, ABAP Environment. To help make the environment cloud ready, 51·çÁ÷and Vistex partnered to help ensure the product road map matched customer needs for enterprise quality solutions in the cloud. Working together, Vistex will help provide industry-specific updates focused on improved customer experience.

We are excited about partnerships like the one we have with Vistex to help customers realize opportunities in the cloud. In fact, 51·çÁ÷ made a minority equity investment in Vistex, showing how committed we are to strategic partnerships that create successful cloud strategies.

51·çÁ÷and our partners want to make the cloud as accessible as possible for all customers, especially in a time where transformation is needed more urgently than ever to cope with the effects of rapidly changing market conditions due to COVID-19. These solutions are purpose-built by 51·çÁ÷and partners to simplify the traditionally complex provisioning of high-value, vertical solutions.

The cloud offers endless opportunities for customers and partners. Next-Generation Partnering places great focus on partner-developed intellectual property through new offerings like .

This is the year for 51·çÁ÷partners to make the switch to the cloud. We cannot wait to work with our customers as they strive to become intelligent enterprises.