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Tacton 2022 Predictions: Manufacturers Will Tackle Climate Change and Embrace "As a Service"

vmblog predictions 2022 

Industry executives and experts share their predictions for 2022.  Read them in this 14th annual VMblog.com series exclusive.

Manufacturers Will Tackle Climate Change and Embrace "As a Service"

By Bo Gyldenvang, CEO of Tacton

The last year has forced manufacturers to swallow two hard pills: manufacturing's role in the climate crisis and the need to shift to different sales models to stay competitive. As technology, global warming, and the customer experience converge, manufacturers have had to reckon with how to operate with sustainability in mind while capturing and keeping greater customer loyalty. Here are the two ways they'll respond:

Stepping up to the climate change challenge    

Manufacturing is responsible for about one-fifth of the planet's annual carbon dioxide emissions - a fact manufacturers can no longer ignore. But while manufacturing plays an undeniably huge role in the climate change problem, the industry has an equally-as-huge opportunity to become part of the solution. Technology will be the clincher, and leveraging solutions such as automation, AI, machine learning, data analytics, and configure-price-quote technology will help manufacturers reduce waste without compromising the needs of the customer.

Though all technologies are helping to that end, Configure-price-quote (CPQ) technology has emerged as one of the most practical tools manufacturers can put into place immediately, to configure optimal solutions for customers based on sustainability requirements. Manufacturers will be able to automate the recommendation for and use of sustainable materials and reduce wasteful components and oversizing while ensuring operational energy consumption. CPQ will emerge as a key component of manufacturing's move to sustainable practices and will be part of a greater intentional digital strategy.

Shifting to "as a service"

Industrial equipment makers are experimenting with new ways to disrupt the historical sales model to capture more value and stay competitive - something they will continue to do in 2022 through Equipment as a Service (EaaS). This model involves creating subscriptions instead of selling products on a one-off basis, and has been fueled by the internet of things (IoT) which connects nearly every piece of equipment in the factory. For example, equipment makers will sell engines by the hour or bearings "as a service" instead of selling single bearings or engines.

The EaaS movement will move past its nascent stage and accelerate in 2022 as manufacturers seek more predictable costs, revenue share, and predictive maintenance. This model is healthier and more predictable because of the different pricing and quoting requirements associated with subscriptions - as opposed to hard goods.

Manufacturers are feeling the pressure to both contribute to climate change efforts and find new ways of doing business that meet evolving customer needs. Technology will help them achieve both goals. Watch for how CPQ solutions play a greater role in 2022 as manufacturers accelerate transformation.

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ABOUT THE AUTHOR

Bo Gyldenvang 

Bo Gyldenvang is the CEO of Tacton, a global leader in Smart Commerce solutions for manufacturers. Gyldenvang has extensive software and services experience. Prior to Tacton, he was COO at Software AG Americas, a leading enterprise integration and IoT software platform globally. Previously, he held management positions at software companies such as BMC Software and HP Software.

Published Wednesday, January 05, 2022 7:34 AM by David Marshall
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