We explain how analysing and challenging Could Cost and Should Cost elements using fact-based models, value engineering and benchmarking can help achieve Best Cost.
XaaS is the model of offering anything as a service. This could range from products and tools to different technologies. While most people will have heard of Software as a Service, the XaaS model is becoming increasingly popular among traditional retailers and manufacturers who see the benefit in retaining responsibility for the maintenance and upkeep of the products they offer.
One common example of XaaS is in the automotive industry, with many cars now being offered on a lease where the service provider is responsible for servicing, maintenance and in some cases insurance for a monthly fee. Other examples include Software as a Service; probably the most well-known use of XaaS which involves providing and maintaining software through a centrally hosted, web-based portal, and Mobility as a Service; the provision of a wholistic end to end, multi-modal passenger journey.
We have seen a recurring appetite to offer this kind of service amongst many of our clients, but the challenge at the forefront of their minds is how to ensure they understand all the potential elements and factors that should be considered as part of that offering, and therefore determine the most advantageous commercial and data models that will underpin their proposition on a usage basis.
If you’re interested in getting XaaS up and running in your business, you can get in touch with us via the form to discuss your options.
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Challenges and benefits
While XaaS is growing in popularity, there are many new challenges that come from not only adopting it, but also adapting it to a changing world.
Referring back to the example of leasing vehicles, offering this service on a traditional ICE (Internal Combustion Engine) vehicle looks very different to what may be involved in offering it on an electric vehicle. One strategy is to separate batteries and vehicles and offer batteries as a service, as opposed to whole vehicles, but this requires a completely different infrastructure and model, so there is a great deal for the service provider to consider and understanding the economics and interdependencies of the individual elements is vital in offering a successful XaaS offering.
Businesses will also have to consider their people resource, and may need to go through a process of talent acquisition to support a new XaaS model, as well as thinking about security and regulations, data rights and intellectual property protection, and risk management.
Despite the hurdles that will need to be overcome, XaaS offers many benefits for the provider, including enhanced agility, the opportunity to embrace innovation, increased operational efficiency and a much greater level of flexibility for their customers.
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Vendigital Approach
When working with clients who are setting up or optimising XaaS models, there are two main areas we can offer support with:
Identifying and sourcing elements
We can help identify and source the elements that go into the ‘X as a Service’ model and ensure that our clients have a full picture of not only these elements, but also the costs that they will need to consider.
Using data to create accurate forecasts and models
We use data science techniques such as Digital Twin to build an economic model that manages the complex variables influencing the asset life and cost. The model can then determine the monthly cost or cost per mile that should be charged to customers, and also determine the optimum way in which to use that asset to extend its life and thus reduce costs/increase margins for our client.
Identifying and sourcing elements
We can help identify and source the elements that go into the ‘X as a Service’ model and ensure that our clients have a full picture of not only these elements, but also the costs that they will need to consider.
Using data to create accurate forecasts and models
We can also use data science techniques such as Digital Twin to build an economic model that manages the complex variables influencing the asset life and cost. The model can then determine the monthly cost or cost per mile that should be charged to customers, and also determine the optimum way in which to use that asset to extend its life and thus reduce costs/increase margins for our client.
Why choose Vendigital?
We are ideally placed to help complex businesses accelerate the transformation of their cost bases.
Client collaboration is at the heart of our approach
We cut through complexity quickly
We're focused on delivering long-term outcomes for clients
We work with clients to set the strategy and deliver the nuts and bolts of the solution
Intelligent approach to cost optimisation through deep understanding of cost and cost drivers
Deliver quantifiable cost reductions through our cost neutral fee structure
Whatever your cost transformation requirements, we provide solutions to meet your needs…
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What We Do
Data-led accelerated cost transformation, delivering measurable and sustainable cost reductions
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As sector specialists, we have a deep understanding of the challenges our clients face and how to achieve their cost transformation goals