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Competitive differentiation in the manufacturing sector is no longer based on product and service innovations alone but on the ability to monetize the usage phase of products and services. To this end, manufacturers are increasingly looking at so-called subscription business models as a way of supplementing the traditional sale of products and services. Since supplier success in the subscription business is directly dependent on customer success, the setup and expansion of a so-called Customer Success Management (CSM) is required. While CSM has already been established in the software industry for several years, companies in the manufacturing sector are often still in the conceptual phase of a CSM, parallel to the setup and expansion of their subscription business. Therefore, this paper aims to support the set-up of a CSM by providing a reference data model, based on case study research, that can be used to support the organizational or daily CSM tasks and to serve as a blueprint for conceptualizing CSM-specific IT systems.
In the age of digitalization, manufacturing companies are under increased pressure to change due to product complexity, growing customer requirements and digital business models. The increasing digitization of processes and products is opening up numerous opportunities for mechanical engineering companies to exploit the resulting potential for value creation. Subscription business is a new form of business model in the mechanical engineering industry, which aims to continuously increase customer benefit to align the interests of both companies and customers. Characterized by a permanent data exchange, databased learning about customer behavior, and the transfer into continuous innovations to increase customer value, subscription business helps to make Industry 4.0 profitable. The fact that machines and plants are connected to the internet and exchange large amounts of data results in critical information security risks. In addition, the loss of knowledge and control, data misuse and espionage, as well as the manipulation of transaction or production data in the context of subscription transactions are particularly high risks. Complementary to direct and obvious consequences such as loss of production, the attacks are increasingly shifting to non-transparent and creeping impairments of production or product quality, which are only apparent at a late stage, or the influencing of payment flows. A transparent presentation of possible risks and their scope, as well as their interrelationships, does not exist. This paper shows a research approach in which the structure of subscription models and their different manifestations based on their risks and vulnerabilities are characterized. This allows suitable cyber security measures to be taken at an early stage. From this basis, companies can secure existing or planned subscription business models and thus strengthen the trust of business partners and customers.
Monetizing Industry 4.0: Design Principles for Subscription Business in the Manufacturing Industry
(2019)
Subscription business models have a major role for monetizing products and services for manufacturing companies in the age of Industry 4.0. As the manufacturing industry has difficulties generating revenues through digitalization, the implementation of innovative business models are essential to remain successful. Physical assets are often capital-intensive and require a more complex manufacturing process than subscription business models. Moreover, subscription models can focus on the individual customer benefit and a consistent service transformation, constituting a unique selling proposition and a competitive advantage. Hence, the following paper provides a management model that enables manufacturing companies to successfully realize the transformation towards a subscription business model. The management model presents four major fields of action, each matched with one design principle that must be considered when dealing with subscription models in the manufacturing industry. These principles were determined by an in-depth case study analysis among various manufacturing companies. Opportunities, challenges and recommendations for action were then systematically derived and integrated into the management model.