Using the Partner Agreement

In cloud selection service, bandwidth data transfer is sold. All customer usage of bandwidth service impacts a gateway fee for a partner, who provisions the gateway service for data transfer. A partner agreement for cloud selection service partner GATEWAY-To-WORLD is captured in order to share, for all bandwidth usages, 3% of the customer revenue with this partner.

Partner Settlement Features in Subscription Order Management (SOM):

• Subscription Partner Orders and Subscription Partner Contracts are created in SOM.
• Partner processing itself is only done in Convergent Invoicing and Convergent Charging.
• Subscription Partner Contracts: Create a partner agreement (provider contracts for a partner) in Contract Accounts Receivable and Payable (FI-CA)
• Subscription Partner Orders can only be created for products of a material type which is customized for partner processing. In addition, a settlement rule needs to be assigned.

As traditional industries increasingly change their business model to a service-based model, a revenue sharing business model becomes more and more important. In such a model, the service provider, who has the contractual agreement with the end customer, shares parts of the revenue with their content providers or has to pay some royalties.

When an end customer is buying a service, the content partner should get part of the revenue that the services provider makes with the end customer.

For this reason, a service provider closes a partner agreement with the content provider. The partner agreement contains the conditions that were negotiated between the service provider and the content partner, such as the service and the revenue split.

The provider that acts as a billing operator, including invoicing and collections towards the end consumer, must forward a certain amount of money to the corresponding partners or third parties.

Process Steps in Partner Settlement and Revenue Sharing:

1. Define the risk category for the partner in the partner settlement rule.
2. The partner who is the service provider signs up. Create a partner agreement order with the partner product and partner settlement rule. The partner product contains the terms, such as the percentage of revenue the partner receives.
3. Partner agreement is generated and distributed within SAP Billing and Revenue Innovation Management. Partner agreement is considered as a provider contract in SAP Convergent Charging.
4. A subscription contract is created for the (end) customer. The Service in the Usage Product is provided by the Partner.
5. When the (end) customer BIT is created, a customer exit triggers the creation of a partner BIT.
6. The partner BIT is evaluated with the partner agreement in SAP Convergent Charging.
7. Customer BITs and Partner CITs/BITs are linked for payment control.
8. Partner credits can be adjusted for the affected partner items when an end customer receivable is dunned or written off.
9. Generated adjustment BITs are tracked and linked to the original partner and end customer BITs.

The PNR_DOWNLOAD Product shows up the scenario to create a Partner Agreement and includes the Settlement Rules for Convergent Invoicing.

This business scenario shows the creation of a Partner Agreement:

1. Step 1. Partner Agreement Order Creation

   In the first step, you log on to the SAP Fiori launchpad, go to the Subscription Order Management section, and select the Manage Subscription Order app.

   Selection of the transaction type PRPO Partner Agreement Order.

2. Step 2. At header level, you need to select the following:

   Partner Data:

   Select an existing Partner as Sold-to-Party, the sold-to-party entered is also used for the required partner functions. Ship-to Party, Bill-to Party, and Payer are determined using the Partner Determination PROV0001 within Customizing.

   Organizational Data:

   The Organizational Data is automatically determined according to the entered business partner. This is done using customizing of the organizational profile for the subscription order with PROVHEADER.

   Partner Contract Account:

   This contains the information about the partner credit payment and financial data for long-term business. The data contained in the contract account influences processes within invoicing, taxation, and correspondence processing. If Contract Accounts Receivable and Payable (FI-CA) is activated, a contract account need to be maintained.

3. Step 3. At item level, you need to select the following:

   Product Data:

   Partner Products have the product type SUBP. Only Partner Products can be entered in Partner Agreement orders. Partner Products have a partner settlement rule assigned. This is used for risk categorization in Credit Payment control.

   Enter the product or item related data:

   Contract start date, product configuration, technical resources, and choose the contract accounts.

   Technical Resources:

   If the Partner consumption items are rated in SAP Convergent Charging, a technical resource is needed for Charging and Rating of Partner consumption items.

4. Step 4. Submit Partner Agreement Order

   After the Partner Agreement Order is captured, you need to submit it to trigger the order fulfillment. The result of the order fulfillment is the Partner Agreement Order creation.

5. Step 5. Partner Agreement distribution in SAP Billing and Revenue Innovation Management landscape.

   Depending on the Partner Product modeling as a recurring and/or usage product, the partner agreements are distributed in the SAP Billing and Revenue Innovation Management landscape, the same as other subscription products.

The partner agreement is replicated to a partner agreement in FI-CA. Partner agreements are a special kind of provider contract. The settlement rule is copied to the partner agreement in FI-CA. To display partner agreements in FI-CA, you can use transaction FP_PV3.

A change process for the Subscription Partner Contract is the same as for a Subscription Contract. Unit 7 covers the Contract Changes.

You can maintain the settings in the Implementation Guide (IMG):

→Service→Master Data→Settings for Subscription Master Data→Subscription Product-Specific Data -→Assign Product Purpose to Product Types.

You can maintain the settings in IMG:

Service→Transactions→Settings for Subscription Transactions→Define Settings for Transaction Types.

A partner settlement rule in SAP Convergent Invoicing specifies:

• The point in time at which the partner shares are settled
• Whether a preliminary invoice is created
• Whether the invoice document is posted in Contract Accounts Receivable and Payable
• The payment mode
• Whether the partner bears the default risk if the end customer fails to pay

It's assigned to the partner agreement order.