We have spent the conference on explaining why PSS will allow a company to thrive and compete in a global and dynamic climate.Hopefully, at this point, it will be obvious that PSS can provide a number of tools and mindsets.In this last contribution from the PROTEUS group, we explain how business models can be built on these mindsets and using these tools.This presentation comes as the last one because the ideas and concepts presented base themselves on PSS thinking – not the other way around.Spent a conference on explaining how the reality of a company changes as it
Most of the people in the roomareprobablyalreadywellfamiliar with concept of a business model. (CLICK) In PROTEUS, weuse the BMC as a simple representation.How manyherearefamiliar with the BMC?Just to recap (for those of youwho do not already know it):From the right – the customer segments and theirrespectiveneedsMovingtoward the middle, wesee the links to the customer segments (distribution and relationships)In the middle, the value proposition, referring to the offeringsprovided for the customer.To the left the different elements needed for delivering the value proposition (includingactivities, resources and partnerships)At the bottomyousee the resulting revenuestreams (and theiramount) and the coststructure (along with amounts) related to executing the business and providing the VP.(CLICK)In PROTEUS, we have chosen to add a new element tech and products arecrucial for many maritime business models and for thatreason, weinclude a new field.
So, again, whydo weneed PSSwhenlooking at business models?(CLICK)Any profitable business model capturesvalue by adressingcustomer/userneeds.(CLICK)The ability to understand needs and align an organisation accordingly is crucial.(CLICK)This is what PSS does – IN FACT: In many cases PSS tools do a muchbetter job than the BMC … AS WILL BE SHOWN ON THE NEXT SLIDE
As mentined, the business model is builtaround the idea of understanding a userneedand buildingactivities and products aroundthis(CLICK)Manyqualitativetools… but recently – as willbementioned in the TORM presentation – verypromisingquantitativetools have been popping up.(CLICK)This, and othertools, ensuresthat the BM is fullycovered in PSS.Still, the BMC is necessary due to itssimplicitySO: whatcanweexpect from thesetools? (next slide)
PSS provides a much more detailedand diverse image og the costsaccrued by the customer over the product/systems LCThis provides an excellent basis for creating solid and attractive business models.(CLICK)This is an example of an analysis done in TORM A/S.Costs in supportingcertaintechnologyareas – not including
In analysing the challengesseen in the branch, it becameobviousthat new configurations and new stakeholderswereneeded.Pressure from legislation and at the same time, liquidity is pressedimpeding the ability to invest in the necessary solutions.There is a major potential for investment and stakeholders from otherindustriescouldbeinterested.I willtellabout the dialoguewe have had with financing partners (investors and leasing companies).(CLICK)It turns out thatcertain parties, whocouldbeinterestedare not reallyaware of the potential(CLICK)Leasing companies: Mitigate up-front costs by leasing products.We have been in contact with leasing companiesinterested in exploring new possibilitiesNew stakeholders, new prerequisites:The ability to extract the asset and reclaim the value is of crucialimportance – handled by suppliers?(CLICK)Investors: Possibility of proactivelyinvesting in energy improving or costsaving systems.Experience in doingsimilarthings on land basedfacilities – Why not at sea?Enoughabout the background for business models – which models would PROTEUS suggest?
Well… in the last worbook in the series, we have created a catalogue of seven (click) business models.As mentionedearlier, the business models arebased on PSS thinking and not the otherwayaround. Therefore, werecommendthatcompaniesseek inspiration in the two business models conceptspresentedherein (and the onesfound in the workbook). One shouldhoweverbecautious in trying to adopt the models directly.Rather, to uncover new ways of doing business, oneshouldapply the tools and mindsetspresentedduring the day and seewhat business models emerge.Still – the conceptscreated have beenvalidated with many relevant stakeholders.We do not have time for visiting all of these BM concepts, but in the following, wewill go intodepth with two (click)
Leaving the traditionalconsumption of two types of shipowners:Ones with focus on owning assets and procuring services as theyareneededOnes with a focus on procuring the outcome or the performance of the asset in return for a flat rate payment.Rather (CLICK): Manyshipowners have varying problems facingthem:Sometimesdockingsareneeded and biginvestmentsneed to be made (large CAPEX)At other times the vesselsare operating without the need for changes and the focuswillratherbe on OPEX.Refer to the age of ships in a fleet as a curve with peaks – corresponding to needs for large investments.(CLICK)Wouldn’t it benice if the shipowner had the ability to sell the asset back to the supplier in return for enteringinto a flat rate contractOr vice versaThis wouldfreecapitalwhenneeded or reduce operating expenseswhenneeeded.Remember to use model – twosettings – onecontract…
Manyshipownersareincreasinglyfocused on the existingfleetratherthannewbuildsAlso, wesee an increasingfocus the total cost of ownership with shipownersCLICKNo one is more aware of the issues and costsaccrued in operating a shipTherefore, there is a huge potential for the shipowners to leveragethisknowledge and start thinking in PSS procurementstrategies.This concept is verymuchrelated to the presentationthat Allan Rasmussen from TORM will do in just a moment.
For more considerations on business models and the considerationsbehindthem: (CLICK)readourworkbook on PSS business models.