Two of the most important trends in the business world is the drive to reduce the total cost of ownership and the shift to process automation. Businesses are moving to subscription-based models for their most popular products. Recurring payments enable the users to pay for services over time with single payment authorization. Businesses are unlocking more value from your subscription model as a recurring payment engine can power your offerings and accelerate your revenue.
But the high landscape complexity and the demands of bundling subscriptions, services, and products make it difficult to manage the model. When deployed on the public cloud, SAP BRIM streamlines this immense challenge by providing complex order and contract management, subscription lifecycle management, fixed fees and usage billing, and complex revenue recognition.
For B2B companies, the shift from selling products to providing subscription services has a dramatic impact on how revenue is recognized. This paradigm shift in the business model determines how customers engage with the product and meter the services the company delivers. It takes dynamic pricing agility in the pricing landscape itself to combat competitive threats.
Solution And Subscription Management With SAP S/4HANA
Typical subscription management solutions lack the infrastructure and expertise to deploy, manage, and support a robust subscription model. But SAP BRIM brings in Subscription and Solution Design to the table with some of the rich features like, analytics and reporting, margin analysis and revenue recognition, usage collection, rating, and charging, fulfillment of physical goods, configure, price, and quote (CPQ).
For order creation, for example, SAP BRIM solution helps businesses with,
- Rolling out unique and complex offers
- Flexible bundling
- Group rate plans to promotion codes
- Associate plans to a unique set of customers
- Pre-defined and unlimited number of price-lists
In the wide-ranging architecture, SAP S/4HANA’s Solution Order and SAP Subscription Billing are natively integrated with S/4HANA cloud (sales billing, FI-AR) and SAP S/4HANA cloud for contract accounting and invoicing (CI, FI-CA). This core capability allows businesses to set up a competitive cost structure with no high initial investments in product delivery.
The solution further cements the subscription business model with accurate rating and metering. Businesses can,
- Track and measure any type of usage
- Load usage in real-time or batch mode
- Rate usage throughout the billing period
- Deactivate service based on usage if the threshold is met
- Measure flexible tier-based pricing
Solution Order Management With Subscriptions: Key Capabilities
- Rapid design and selling of solutions containing physical goods, services, and subscriptions. These can be combined in one order and it can support complex pricing models.
- Holistic order orchestration of all solution order items.
- Solution order progress monitoring with situations handling.
- Fulfillment of physical goods
- Integration into field service management
- Subscription and service contract lifecycle management
- Rating and charging of metered usages
- One invoice for the complete solution
- Integrated finance for all solution order items
Services And Subscriptions: Everything In One Solution
When it comes to solution order management, you can manage sales order item, service order item, service contract item, subscription item and upgrade your business into a solution and subscription business with SAP BRIM cloud.
Manage solution orders: develop new business models based on solution offerings to differentiate from your competitors
Manage subscriptions: exploring new business models including subscription and pay-per-use offers to bill customers for them in a variety of different ways
Solution billing: easily combine data from different sources (orders, contracts, deliveries, external data) into a single invoice.
Margin analysis: analyze revenue and cost by solution order supporting the matching principle without any additional settlement in controlling
In addition to this, the public cloud subscription model can yield integration with several built-in scenarios.
You can have the following pre-delivered integration items:
- SAP S/4HANA Cloud Sales Billing
- SAP S/4HANA Cloud For Contract Accounting And Invoicing
- SAP S/4HANA On-Premise SD
- SAP Business ByDesign
- SAP Commerce Cloud
- SAP CPQ
- SAP Entitlement Management
- SAP Digital Payments
SAP BRIM is optimizing businesses in ways never before unknown. Enterprises can reduce time to market for new packaged offerings, ensure higher win rates of deals, and holistic management of recurring and usage-based revenue.