“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.”

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According to the IDC MarketScape report, companies should consider 51·çÁ÷when they “need a highly scalable subscription and usage management application built into [their] ERP platform for the benefits of analytics, integration, procurement, and vendor relationship.” The report cites that customers are happy with the 51·çÁ÷platform and services to monetize their businesses and confident of 51·çÁ÷as “their subscription and usage management vendor of choice for the future.”

Organizations across a variety of industries use the 51·çÁ÷Billing and Revenue Innovation Management solution to quickly launch innovative subscriptions and usage-based offerings that can be easily updated to meet changing customer needs and market disruptions. With a native integration to 51·çÁ÷S/4HANA, customers get the added benefit of achieving end-to-end automation across their business processes.

is a 100% sustainable, green energy leader with more than 300,000 customers across Italy. The company is leveraging together with 51·çÁ÷Billing and Revenue Innovation Management to modernize and transform its business. With SAP, Alperia can offer new business models with fast time to market, such as subscriptions and personalized product and service bundles based on customer preferences and consumption behaviors. Alperia is leveraging 51·çÁ÷solutions to drive new business models as it develops new turnkey green energy services for its customers.

The largest postal service provider in Portugal, is working with 51·çÁ÷to transform the 500-year company into an agile, future-ready enterprise. 51·çÁ÷Billing and Revenue Innovation Management is simplifying the once complex, time-consuming billing process. There is greater visibility with billing data from multiple sources consolidated into a single view, helping mitigate revenue leakage and providing greater visibility to the billing process. Invoicing and accounting processes are automated to reduce errors and empower employees to be more productive. With 51·çÁ÷S/4HANA and 51·çÁ÷Billing and Revenue Innovation Management, core business processes are connected and powered by automated workflows, cutting complexity, increasing efficiency, and enabling CTT to respond more rapidly to new business requirements and revenue opportunities.

Another customer using 51·çÁ÷to transform into a subscription business is a leading supplier of high-quality window, door, and facade systems with millions of products used all over the world. With SAP, the company transitioned from offering a fixed contract to a flexible one for its digital products. It can offer customers fast time to value with instant activation and access to newly purchased products with the flexibility to offer different pricing models, such as scaled pricing, usage fees, and one-time fees. SchĂĽco will be taking advantage of the ability to directly integrate with other 51·çÁ÷solutions used by sales, services, commerce, and marketing teams in order to support a seamless customer experience and end-to-end automation of key business processes.

51·çÁ÷Billing and Revenue Innovation Management is an integral component of the 51·çÁ÷portfolio of products that automate the quote-to-cash process. Leveraging a modular cloud approach, 51·çÁ÷brings together 51·çÁ÷S/4HANA Cloud, 51·çÁ÷Billing and Revenue Innovation Management, 51·çÁ÷CPQ, and 51·çÁ÷Business Technology Platform (51·çÁ÷BTP) to create an end-to-end quote-to-cash process and enable organizations to accelerate monetization of subscriptions and other recurring revenue business models.

Hear from other customers and learn more about how 51·çÁ÷helps to automate quote-to-cash with , , and .

Si-Mohamed Said is global head ERP and Finance Product Marketing at SAP.

*”IDC MarketScape: Worldwide Enterprise-Focused Subscription and Usage Management Applications 2022 Vendor Assessment” by Mark Thomason, September 2022, IDC #US48786022

To remain successful in the face of such disruptions and evolving expectations, companies are transforming their business models to the next level. They realize that they need to stay ahead of competition by providing valuable business outcomes to their customers while achieving efficiency, profitability, a great user experience, scalability, and resilience.

This has a major impact on the quote-to-cash requirements as the centerpiece of companies that enable their organizations to sell, deliver, and charge for products and services. Quote to cash is one of the most critical but complex process that encompasses multiple activities in an organization. Whether in a B2B or a B2C setting, it is a comprehensive process that no off-the-shelf, end-to-end solution can handle.

“Cash is king” is an often heard truism in business landscapes, but when it comes to services organizations, it takes a lot more to be successful.

(Products + Services) x Subscriptions = Solution

Transformation means change and that involves understanding both the reason to change and the consequences of change. To thrive today and gain flexibility and variance, businesses need to transform to solution-based business models that expand the responsibility beyond the initial sale: products combined with services, often sold with a contractual promise of an outcome.

Right System for the Right Results

51·çÁ÷enables all customers according to their specific needs and allows them to keep ahead of today’s challenges and quickly adapt to tomorrow’s world. This is done by simplifying the challenges in three main ways:

• Be more efficient in what you do
• Scale and provide modern ways of selling
• Move from selling standalone products and services to offering bundled solutions to customers

51·çÁ÷S/4HANA Cloud provides all the core quote-to-cash and finance processes that businesses need to adopt a holistic, solution-based business model rather than cobbling various processes together manually. By doing so, it allows a business to transform into a one-stop shop to offer the best solutions to customers.

One-Stop Shop

Our quote-to-cash process makes it possible for your business to integrate new solutions and subscriptions, which in turn enables your company to cut costs, improve efficiency, and gain visibility with your customers throughout the entire life cycle.

A great example is IBM, which recently underwent an enterprise resource planning (ERP) transformation as it moved its processes to 51·çÁ÷S/4HANA Cloud.

“IBM introduced 51·çÁ÷S/4HANA as a strategic quote-to-cash platform to accelerate the growth of its subscription license, as-a-service, and software-offering business,” said Prasad Chennuru, chief architect at IBM. “The market-leading capabilities of 51·çÁ÷S/4HANA to sell holistic solution and subscription bundles enabled IBM to improve the performance and usability of its order management and financial processes, thus reducing time to value and time to market.”

Besides the business transformation to bundled solutions, quote to cash also powers modern product and service sales by putting user experience at the center and enables streamlined, intelligent, and automated processes to take manual tasks away from the end user.

Our New Generation of Sales

Today the pace of data generation is accelerating, with 90% of the world’s data having been generated in the last two years alone. In addition, last year about 51% of the workloads were processed in the cloud and this will only grow in the foreseeable future. Exponential growth of this kind means that customer experience will become one of the key brand differentiator — dethroning price and product as the leading factors.

With quote to cash as one of an organization’s most critical and complex processes, few ever look to make improvements — until a crisis shocks them into realizing the problems and pitfalls of an inefficient quote-to-cash process.

But complexity conceals value and opportunity. With 51·çÁ÷S/4HANA Cloud, customers can refine their quote-to-cash process to improve performance and scalability that enables a seamless end-to-end process integration and helps boost sales and service productivity by using intelligent technologies like robotic process automation and machine learning. This supports making the right decisions at the right time with embedded advanced analytics and leveraging the pay-per-use offerings.

, one of Europe’s leading photo service providers, acquired and integrated WhiteWall to expand service and reach. Prior to its acquisition, WhiteWall’s order processing capabilities were limited by its existing systems, which prevented the company from taking full advantage of seasonal sales periods, such as the winter holidays. Today, 51·çÁ÷S/4HANA Cloud automates and accelerates the quote-to-cash process. From the moment a customer places an order on one of WhiteWall’s online stores, the 51·çÁ÷solution processes the sales order, starts the production, then manages payments from PayPal and other payment providers.

According to Alexander Nieswandt, founder of WhiteWall Media GmbH, “Our employees think it’s great because they don’t have to wait for processes to run in the background; they can really concentrate on their work and focus on providing an even better service to our customers.”

Enabling, Integrating, and Incentivizing Sustainability with Subscription Billing

is an end-to-end solution for recurring revenue at high transaction volumes. It provides rapid design of new service-based business models, holistic management of recurring and usage-based revenue, and customer-focused settlement and service at scale. It is designed for enterprises in any industry that want to or that are transforming their offerings into services or aim to lower cost in revenue management and customer satisfaction.

is the only solution in the market that natively integrates high-volume billing into financial excellence powered by 51·çÁ÷S/4HANA Cloud.

Courier company DTDC Express Limited is one of India’s leading express parcel service providers. Founded in 1990, the company has grown rapidly and wanted to unify and digitalize its sales and billing processes to help ensure that its . Implementing 51·çÁ÷Sales Cloud and 51·çÁ÷Billing and Revenue Innovation Management has seen an increase in the efficiency of the sales and accounts teams at DTDC — the same number of employees now manage 1.5 times more payment transactions than before implementation.

By driving intelligent automation deeper into and across companies, 51·çÁ÷helps to improve both customer and employee experience. But this must go hand-in-hand with delivering end-to-end processes that include any variation of physical product, installation service, maintenance contract, project, and subscription, as well as embracing complex service scenarios — from one-off repairs to long-term engagements, all the while maintaining and improving compliance, security, and sustainability through all this change.

In the environment that we find ourselves today, companies’ health depends on its liquidity and ability to react fast to changes. We build on our experience and our deep insights into what matters to our customers today and enable that in our end-to-end solution in order to unleash the potential of the cloud and design, streamline, and automate this process to have a direct impact on improving customer and user experience.

Jan Gilg is president and chief product officer for 51·çÁ÷S/4HANA.

Transforming How Products and Services Are Offered and Sold

This trend challenges traditional ways of doing business as it focuses on keeping customers for life by establishing longer term recurring revenue streams. Business models like these allow products and services to be offered in a completely new way instead of adapting or optimizing existing business processes.

How can your company or line of business achieve this? To remain successful, businesses across industries continuously re-evaluate how to create additional value for their customers. At SAP, we are working with our customers to reimagine business processes that increase productivity and unveil growth opportunities. This includes, among other things, how new offerings are sold to customers in order to increase customer loyalty at the end of the day.

From Selling Products and Services to Providing Bundled Solutions

While traditional business models are about selling physical goods and services, solution business models are built around the customers’ needs. Companies embracing these modern business models offer a combination of physical goods, services, and subscriptions to serve their customers’ needs holistically. And customers benefit from a one-stop-shop solution.

Whether offering products or services, these new models expand the responsibility of companies beyond the initial sale to include all elements of a solution along the entire life cycle; for example, the delivery of a machine, its installation, and corresponding maintenance services. The technical and the business processes must support the customer on this journey and minimize the business risk for the solution provider. Delivering this kind of solution-based value maximizes customer satisfaction and drives margin growth by selling higher value services.

This requires an that recognizes all the components of the order and has the ability to administer each step in the process — from capture to fulfillment, service, billing, and managing the profitability of the bundled solution.

The enables businesses to sell bundled solutions, including subscriptions, and leverage innovative capabilities for intelligent quote-to-cash. Let me highlight three impressive key capabilities.

Combining Products, Services, Projects, and Subscriptions in a Single Order

As a first step, 51·çÁ÷S/4HANA Cloud makes it possible to quickly design and sell holistic offerings, integrated into the order-to-cash process.  Take, for example, our customer AAF Lufttechnik GmbH, a company that manufactures air filter systems, which have been in increased demand over the last couple of months. With 51·çÁ÷S/4HANA Cloud and solution order management, AAF Lufttechnik GmbH plans to combine the sales of the air filter systems together with the corresponding installation and maintenance services as a one-stop-shop solution.

Monetizing Services With “Pay-As-You Go” Subscription Models

With 51·çÁ÷S/4HANA Cloud, customers can facilitate new business models by offering a variety of different pricing models. These include subscriptions for one-time, recurring, and pay-per-use offerings. 51·çÁ÷Subscription Billing enables the design of flexible price plans, rating, and charging of metered usage data from technical systems, such as sensors from the Internet of Things (IoT). Subscriptions are now part of the end-to-end quote-to-cash process, built into 51·çÁ÷S/4HANA Cloud. All subscriptions can be managed end-to-end.

Rethinking Flexible Billing, Measuring Solution Profitability, and Automating Revenue Recognition

With the help of 51·çÁ÷S/4HANA Cloud, billing data from different sources can be flexibly integrated — from one-time orders, long-running contracts, deliveries, and external data — into a single invoice, which is consistent with the order. Because companies also need to carefully guard the profitability of solutions, 51·çÁ÷S/4HANA Cloud provides margin analysis for orders, including all elements of the bundle. It also automates revenue recognition for sales products, service contracts, recurring subscriptions, and projects, and supports a simplified period-end closing.

Today, solution and subscription models are top of mind for businesses across industries. Solution order management illustrates that significant added value comes from business process innovation. By integrating order-to-cash processes using the latest technology innovations, customers can unlock new opportunities for growth. That is why to enable end-to-end processes and deliver business value to our customers.

Thomas Saueressig is a member of the Executive Board of 51·çÁ÷SE.
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