CEO’s aspect: Changing customer demand drives business model revolution

The recent studies of the analyst firms have shown that many companies are reimagining their business models to ensure a secure future, business continuation and repairing plans for the markets recovering after COVID-19.

We updated our strategy at Variantum approximately two years ago and introduced the concept of “Reimagine your offering” to help companies to speed up digitalization and survive foreseen business transformations. Knowing nothing about upcoming pandemic, we were spot on.

Now our competitors have also woken up and started to acquire smaller software companies to achieve business capabilities to support customers. The megatrends like cloudification and offering evolution to more complex, like physical product combined with software and services, will enforce all of us to reimagine how to make profitable business. This means that every process revolution influence, how we design, sell, manufacture and maintain the offerings we provide.

The world is moving fast towards Offering-as-a-Service business models. Software vendors, like many other industries, have transformed their business models to subscription license model. It is a tip of the iceberg. The service business model means focusing on the value of the customer lifecycle and the customers’ trust must be earned every day.

We have advised several prospects and customers in their journey towards as-a-Service business model. For instance, several manufacturing companies have opened their strategy and plans to provide their offering as a service in near future. What does this mean in practice? You might be able to buy goods as a service, directly from the original manufacturer without involvement of leasing or financial company. This revolution is ongoing.

Variantum has introduced Offering Management Evolution Steps to help and speed up the customer journey in reimagining business digitalization and transformation. The steps are based on business capabilities needed to move towards Offering-as-a-Service model regardless of solutions or systems in use.

Our studies show that increasing digitalization of offerings are driven by:

  • the uncertainty of today’s business environment
  • the end-users need for more product and service personalization
  • the growing social and ecological demand for sustainability
  • the ever-present requirements related to shortening innovation cycles and meeting international and market-specific regulations.

The interesting part is that the top drivers for todays’ companies are similar in a wide range of different industries.

In summary, regardless of the industry segment, the challenges in terms of mastering the increasing complexity in offering development with the tight integration to flexible value chain and end-to-end traceability of deliverables are forcing a growing number of companies to adopt a functioning, flexible and reimagined approach to business model revolution.

We, at Variantum, are super excited about the interest of the companies to learn what “Reimagine your offering” means. At the same time, it is a journey to us to learn through changing customer demand. Super fun!

-Kimmo Karhu, CEO