Stena Circular Consulting and Cradlenet recently launched the report “Product-as-a-Service in the circular economy” at Norrsken. The report aims to highlight the challenges companies are facing when they start to address a transition towards a sustainable business model. Even though PaaS has been proven to be a strong business case, far too few companies are adopting it. So why hasn’t PaaS turned into a bigger success yet and why is it so difficult to go from a linear to a circular economy?
One of the biggest issues we have are our resources. The western world needs to scale down on our consumption and production at the same time as the third world needs to accelerate. How do we balance this? Going forward companies need to focus on designing products to be reused and there must be a business interest for it to be applicable.
The following three areas are highlighted as challenges that companies are facing when standing in front of a transition into PaaS:
- Customer Acceptance – customers still like to own the product, they underestimate the cost of ownership and transaction costs cause inconvenience. How can companies work to change these behaviors?
- Operational and Capability-Related Costs – there are increasing product costs, lack of PaaS-capabilities and immature ecosystem for partnership.
- Financial Risk – there is a risk of becoming asset-heavy, a lot of companies struggle with poor liquidity and difficulties with investments.
So what can each and every company do to move away from these obstacles and adapt to a more future proof business model? You will find a lot of great answers in the report and if you would like to discuss how your company can optimize your PaaS-model or even transition into the business model, we are here for you!
