Everything as a service? Introducing the St.Gallen IGaaS Management Model (2019)

TitleEverything as a service? Introducing the St.Gallen IGaaS Management Model
AuthorsMoritz Classen, Christoph Blum, Philipp Osterrieder & Thomas Friedli
Source2nd Smart Services Summit, Zürich, September 13, 2019
SummaryManufacturing companies are increasingly integrating services with their hardware products, propelled by advancements in digital technology. This amalgamation of products and services leads to the formation of hybrid offerings which include both smart products and smart services. This approach is allowing companies to optimize their business models further.

When manufacturing companies manage to bundle products and services into a single service offering, it leads to the emergence of the Product-as-a-Service model. In this model, customers utilize the product, while suppliers maintain the product’s functionality. This concept has manifested in various forms, such as Lightning-as-a-Service or Windpower-as-a-Service, all collectively termed as Everything-as-a-Service (XaaS). However, a limited number of manufacturing companies have successfully implemented or economically benefitted from the XaaS model.

Software companies, on the other hand, have successfully transitioned from selling on-premise solutions to offering Software-as-a-Service (SaaS), undergoing significant organizational changes and adopting new business models in the process. This transition to SaaS has proven to be highly profitable for software companies, providing a potential roadmap for manufacturing companies looking to adopt a similar model.

However, there is a lack of comprehensive frameworks to guide manufacturing firms in their transformation towards XaaS. To address this gap, the text proposes a holistic management model consisting of four main levers: strategy, business model, operating model, and enablers. These levers are essential for effectively implementing the transformation towards XaaS in action.