With SAP Billing and Revenue Innovation Management, SAP is providing a solution for a flexible implementation of the entire quote-to-cash process, especially for high volume, subscription or usage-based scenarios.
Let’s have a look on some highlights, SAP has provided in 2021 to better serve the needs for these use cases and how we are supporting our customers transformation journey with future-proven business cases.
Enhanced Solution Business Capabilities including subscriptions
Moving away from pure product businesses is a current trend. Additional services are wrapped around physical products and can be sold as a bundle. Different components can be part of one contract but must be treated in different ways. Physical deliveries must be initiated, and a service contract might monitor services and their consumption. And subscriptions contain the entitlement to use specific elements – being it physical or virtual.
SAP is supporting this concept based on the Solution order, a new object in S/4HANA Cloud. With the 2102 release, Service in SAP S/4HANA Cloud is now also integrated with SAP Subscription Billing. If a subscription is part of a solution order, SAP Subscription Billing takes over and takes care of relevant follow-on processes.
Increased Pricing Flexibility
Flexible pricing options are a key aspect in subscription-based scenarios. This is essential to provide competitive offerings on the market. Companies need to react quickly to changing market conditions and agility is key to set up new business scenarios in a flexible way.
We are proud to introduce the new Price Calculation functionality as a new component within SAP Subscription Billing. More sophisticated pricing configuration options are available now. Subscription pricing is put to a next level with regards to flexibility and supported use cases.
Subscription Order Management and the integrated process with SAP Entitlement Management
SAP Entitlement Management has been developed to address any type of entitlements. Entitlements are anything that the customer has the “right to use” based on his contract, for example a specific amount of downloads, hours to use a specific software etc. SAP Entitlement Management covers the entitlement modeling as well as managing these entitlements throughout the entire lifecycle.
Based on the new integration with Subscription Order Management, entitlement information related to subscription contracts can directly be submitted to SAP Entitlement Management, where the relevant entitlements will then be managed.
Cost structures with SAP Convergent Invoicing
In addition to the comprehensive features in SAP Convergent Invoicing, SAP now offers to consider cost posting in Convergent Invoicing. This supports the entry and posting of the cost of goods and services sold. The cost amount can then be used for cost recognition. This new feature improves visibility and accuracy in controlling and profitability analysis. Enhanced cost controlling for digital services including services involving third-party and partner-based services is now possible.
Improved integration with SAP Cash and Liquidity Management
Subscription and contract-based scenarios come along with new requirements for liquidity analysis. Instead of a single payment related to the purchase of a specific product, incoming cash spreads over the entire contract lifecycle, can also be usage specific and is more difficult to predict. And of course, treasurers want to have all these details reflected in their reports to take the right decisions. In Cash Management, relevant information from different sources will be updated as part of the “one exposure”. This exposure is built up based on different business transactions in FI-CA. Document postings as well as changes and payments have an impact on these values. Installment plans and promises to pay can be reflected as well.But also, information of unbilled revenue is an important factor to improve cash prediction. As of 2021 we therefore also integrate information from Convergent Invoicing based on billing plans and billable items to improve cash flow analysis with relevant information as soon as possible.
Please see our new video for some more details on highlights in 2021:
If you want to learn more about SAP Billing and Revenue Innovation solutions: www.sap.com/BRIM
If you want to learn more about new features in SAP S/4HANA Finance, see our latest blog post