SCALA

Initial situation

The introduction of a subscription business model (SBM) in mechanical and plant engineering represents a paradigm shift in the entire company organization and its value creation activities. There is immense potential, which SMEs in the manufacturing industry can only map quantitatively to an inaccessible extent, as there is no procedure for customer evaluation and business case calculation. Consequently, there are numerous challenges in the area of analyzing the customers and profitability of a future SBM. SMEs are unable to capitalize the opportunity of subscription-first movers, sustainable long-term profit growth, intensive customer retention, and differentiation against the competition. These companies need help in making an informed assessment and business case calculation for potential customers to decide with whom to enter into a subscription relationship.

Solution approach

Based on an analysis of the requirements for subscription customers, a subscription-specific catalogue of requirements is determined. Taking data availability into account, evaluation criteria from the customer ecosystem are then developed. Furthermore, an overview of risks, uncertainties and trends depending on the subscription maturity level will be created. Subsequently, a model for assessing customer suitability is created, which forms the basis for modelling the expected future cash flows. Finally, the evaluation methodology is transferred into a semi-automated business case calculator including a practice-oriented guide for SMEs.

Expected result

For the first time, the project combines the suitability of customers with economic aspects of subscription business models. The findings are transferred into a semi-automated business case calculator.

Benefits for the target group

SMEs are given the opportunity to assess the suitability of their customers for SBM and to create a business case taking into account risks and uncertainties as well as customer-dependent returns. The analysis and calculation of costs and risks enables SMEs to understand their revenue potential and focus on profitable SBM.