Cases Overview | Advisory Smart Buildings

How Europe’s most traditional industrial manufacturer unlocked the value of software-based solutions

Founded in the first half of the 19th century, Europe’s largest industrial manufacturer looks back on a long and eventful history. With the passing of decades, the company has grown into a truly global player with 350k+ employees and 200+ production facilities around the world.

Today, the constructor of the world’s first long-distance telegraph line stands firmly rooted in the 21st century, offering cutting-edge solutions in the fields of healthcare, energy, and building technologies. Recently, one trend has dominated all sectors: a shift from hardware to software-based services.

Zooming in on the building technology sector: by 2019, the legacy manufacturer had developed an impressive array of novel digital offerings for buildings. Their solutions ranged from tools for monitoring energy consumption, reporting on sustainability metrics, and measuring space utilization to predictive maintenance software. Yet, many questions around the offering of these services remained open. Which solution did their clients really need? How much would they be willing to pay? Would facility managers around the globe have different requirements for their smart building?

To answer these questions quickly and in a structured way, the company decided to partner with the BMI Lab, an advisory with years of experience in developing suitable revenue models and pricing mechanisms.

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To support the manufacturer in identifying a viable revenue model for their bundle of smart building technologies, the BMI Lab developed a three-step business model improvement project. Over the course of five months, the offering underwent one full testing cycle. The company’s internal project team participated in three two-day workshops to learn the Business Model Navigator methodology. In between, they convened once a week to work on pre-defined tasks in constant consultation with their dedicated BMI Lab experts.

Five months after the project launch, the manufacturer has made significant progress on developing and validating a model for monetizing the value of their software bundle from the end-consumer.

Validated model

Based on the findings from the research into the needs of local branches distributing the smart building solutions, the analysis of global best practices and the interviews with actual customers, the manufacturer’s project team was able to develop a viable revenue model for their smart building solutions: a software-as-a-service (SaaS) model with a pre-tested pricing structure.

Clear next steps

Having undergone a complete testing cycle, the new service bundle was ready for its marketing launch. To further improve the model, ongoing tests and readjustments would be needed. To support this process, BMI Lab’s experts translated the list of unverified assumptions into a coordinated testing plan with actionable next steps and tools to use along the way.

Innovation capabilities

Driving an innovation project forward, naturally, requires more than a plan and tools – you also need employees with the necessary set of skills. During the business improvement project, participants had the opportunity to strengthen their business model innovation capabilities, a skill that will continue to benefit them and the manufacturer well into the future.

Business Model Improvements are high-paced, short-term projects that deliver a clear answer to a specific business challenge – from the ideation of novel business model ideas, through the integration of new solutions into the existing business to the realization on the market.

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