Why Conflicts of Interest Make Your Desired Lifecycle Solution Impossible
Let’s be honest: would you give an electrician responsibility for the entire construction of your apartment building and then also assign them property and tenant management? Probably not. For good reason: the electrician is an expert in their field but only has dangerous half-knowledge in other trades.
Why, then, do companies expect a manufacturer, system integrator, or leasing company to design and operate an individualized, automated lifecycle? All are experts in their domain, but none has the competencies, resources, or tools to orchestrate other experts across the lifecycle.
And no one talks about the money/business model. Manufacturers, integrators, leasing firms, and EoL partners compete for parts of the lifecycle to capture more revenue. Their business models often conflict with each other and with customer interests.
Examples – Revenue Logic:
Manufacturers: Their business model is designed around short cycles and maximum configuration—ideally without intermediaries and at the highest possible price.
System integrators / IT service providers: Part of their business is also hardware sales (ideally with substantial manufacturer discounts). However, the major share of revenue comes from services. This means that all technical options that allow devices to be preconfigured at the factory, managed via remote access, or maintained through predictive maintenance reduce the revenue potential of system integrators.
Leasing companies: They earn a small share through interest and contrary to common belief only a small portion through remarketing at the end of the term. The largest share arises from unplanned extensions. As a result, the interests of leasing companies conflict with those of manufacturers and system integrators (who benefit from frequent renewals) as well as with the interests of the companies themselves.
This brings us back to the central question:
Why do companies believe that any of these experts are able to design and operate an individualized yet automated lifecycle?
In our view, key competencies are missing, competencies that either need to be developed by the providers mentioned above or brought in through partnerships with specialized players who are not simultaneously competing for individual parts of the lifecycle.
As a company, you essentially have three options:
- Continue as before, with the awareness of why it will never truly work.
- Wait until the established providers build the missing capabilities.
- Actively support your providers by sourcing these capabilities from a neutral party, helping not only yourself but also your suppliers in the process.
The choice is yours… you decide. (๑ > ᴗ < ๑)
