Analyzing the Quote-to-Cash Process

We see that companies in many industries are turning towards subscriptions, usage-based, and other models to meet changing demands from their customers and evolving trends in the market.

Customers, whether they are end-consumers or businesses, are demanding greater flexibility, personalization, and value in how, when, and what they are purchasing and consuming.

At the same time, investors are favoring companies with predictable, ongoing streams.

As a result, organizations in are looking at "everything-as-a-service", personalized bundles, pay-per-use, subscriptions, and other innovative ways of monetizing their products and services to address these external factors.

Business models like Product as a Service or Software as a Service are typical examples of subscription business models.

Product as a Service is the concept of selling the services and outcomes a product can provide rather than the product itself.

The manufacturer continues to own and maintain the product, and the customer leases it for use or subscribes to a menu of services. In other scenarios, the customer owns the product but is not responsible for maintenance, or such responsibilities are divided according to the license agreement or warranty.

The Product as a Service business model allows for wide variations on the type of value being delivered to the customer. For example, a subscription can guarantee certain outcomes, such as hours of uptime or units outputted. It can specify the maintenance and repair services the manufacturer provides. Other services have less to do with the product itself and more with how the data it collects can help the customer in their business or personal life.

Printers, for example, have long been leased instead of owned, with customers paying for a service contract.

Manufacturers such as HP, Lexmark, and Xerox have more recently augmented their service offerings by, for example, sensing when ink cartridges are low and automatically ordering and shipping replacements.

Services like Software as a Service, Platform as a Service, or Infrastructure as a Services are examples of subscription-based business provided by the High Tech industry to allow users to connect to and use cloud-based apps over the Internet.

Software as a service (or SaaS) is a method of delivering and licensing software applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.

Subscription-based business models support the implementation of innovative new pricing models. It supports models like one-time fees, recurring fees and usage-based fees like Pay-Per-Use or Pay As You Go.