Describing Ordering Processes Supported by Solution Business

For their business, CutAbove need more storage for "Video Cutting" in the Cloud. From the O2C Company, they can buy a cloud selection service that allows them to store extra videos, if necessary. The cloud selection service is offered in different service levels.

Lena is an order Management Administrator for the O2C Company. Her main responsibilities in this role involve:

• Checking the Subscription order (created by SAP CPQ).
• Accepting the Subscription Order​.
• Checking the Subscription Order fulfillment.

Once the preceding tasks are completed, depending on the service chosen by the customer, she must return one month later to the order to:

• Change the subscription Contract​.
• Change the technical resource.
• Change the monthly price​.
• Give allowances in a marketing activity​.
• Cancel the subscription contract​s.
• Renew the subscription contract​s.
• Change the product selection from silver to gold.

As you can see from Lena’s list of tasks as order management administrator for the O2C Company, she must be organized to ensure that customers receive the correct service order. Let’s see how Lena manages the subscription order management process.

The subscription order management component of SAP S/4HANA for Billing and Revenue Innovation Management (BRIM) helps you explore new B2C or B2B markets or extend market opportunities, by addressing new customer segments in new verticals and geographies.

The preceding diagram outlines various business functions and processes related to Subscription and Order Management (SOM) within a broader framework known as BRIM (Billing and Revenue Innovation Management). Let’s go into more details.

1. Product Modeling

• Model Bundles including Products, Projects, Recurring, One-time Services, and Usage Charges.​
• Define Prices for Recurring Fees, Products, and One-time Services. ​
• Map Usage Charges with Cross Catalog Mapping.​
• Define and process Allowances.​
• Combination Rules with Variant Configuration.​

2. Order Capture

• Manage Subscription Orders.
• Track Status ​of Order ​Processing​ Eligibility, Feasibility, and Availability Checks​.
• Credit ​Management.
• Mass Creation. ​

3. Order Distribution

• Contract Creation.​
• Document Distribution. ​
• Order Fulfillment Capabilities including Scheduling.​
• Monitoring including Graphical Visualization and Rescheduling.

4. Contract Change Processes

• Product/​Configuration Change.​
• Contract Extension​.
• Cancellation/​Cancellation of Options​.
• Contract Account Change.​
• Technical Resources Change.​
• Allowance Refill.​
• Mass Changes. ​

5. B2B Features

• Master Agreements.​
• Partner Settlement and Revenue Sharing​.
• Define Rules for Complex Discounting.​
• Account Splitting and Merging.​
• Sharing Contracts.​

6. Solution Quote and Business Portfolio

• Manage Solution Quotation.
• Bundle Products with ​Sales Item​, Service Contact Item, Service Item.​
• Subscription Item, One-Off Charge.​
• Business Solution Portfolio. ​
• Service Integration.​

Subscription Order Management benefits include the ability to design new subscription offerings that are instantly available for quoting and ordering across all channels. This system can also handle the complexity of dynamically bundled service packages, ensuring that what is ordered can be delivered and billed with subscription order capture and automated management of contract changes, renewals, and extensions.

Also, it can manage B2B master agreements and hierarchies with large enterprise customers, including specific terms for pricing, shared allowances or credit pooling, who can order what, volume discounts, and invoicing. Moreover, it gives service agents a 360° view of customer interactions across the entire order-to-cash process, allowing them to provide prompt and expert service with a personal touch.

A subscription order allows for the sale of products or product bundles for different services and physical goods, such as hardware devices. It contains long lifetime items that create a subscription contract, including usage fees with rating in Convergent Charging or Convergent Invoicing, and recurring fees with rating in Convergent Invoicing.

Furthermore, the subscription order is created and stored only in SAP S/4HANA Service: Subscription Order Management and serves as the starting document within the subscription contract lifecycle management. Also, it allows for the assignment of an external purchase order (PO) number on the header/item level, which is then passed to the FI-CA provider contract.

A subscription order has an additional data structure, like technical data, billing cycle, contract start date, and contract duration. In connection with the subscription contract, it supports the sale of special products and services, in the way that they are assembled and offered.

When you confirm the subscription order, the application automatically creates or updates the relevant subscription contract, according to the status.

A solution quotation is a legally binding offer with fixed conditions made to a customer for the performance of various services, subscriptions, and the delivery of physical goods. It allows for the ordering of Service, Sales, and Subscription products within a single SAP order document.

Also, it performs and tracks the creation of all follow-up documents and can be related to a Master Agreement. The system also allows for the assignment of an external PO number on the header/item level, which is then passed to the FI-CA provider contract. Furthermore, it enables the possibility of searching for a solution quotation by external quote reference number.

With a solution quotation, you can offer your customers solutions that combine different types of products (physical goods, services, subscriptions). These combinations are modeled as product bundles in your master data. When you enter product bundles as items in a quotation, the bundle components are displayed automatically as sub items. The end values for prices in solution quotation items for recurring fees are calculated dependent on quantity and contract runtime.

Once a quotation is released and accepted, follow-up transactions are generated automatically and subscription items in the quotation are copied into a subscription contract. When you accept a solution quotation, the subscription items for one-offs create a one-off billable item (BIT).

The subscription contract is a crucial component within the BRIM landscape, encompassing the results of the subscription order or solution quotation. This contract includes key elements such as the contract account, billing plan with billing lifecycle, price for rating of usage, and being assigned with a technical resource for unique identification, contract duration, allowed services, and discounts on usage.

It also incorporates time slices within the contract lifecycle to accommodate changes on the contract and has a billing plan assigned in Convergent Invoicing. Moreover, the subscription contract serves as the foundation for rating in Convergent Charging and Convergent Invoicing. It is distributed to SAP S/4HANA Convergent Invoicing as a provider contract and to SAP Convergent Charging as a provider contract.

It is represented by a main subscription contract item within a subscription contract document. A subscription contract document contains one or more subscription contracts, where the individual subscription contracts are not dependent on each other.

A typical subscription contract contains important information, such as technical resources (technical IDs/references of services) and contract history (an overview of all the changes related to the contract and previously created orders). It also contains subscription contract options (sub items of a subscription contract, containing their own data), and business partner data (for example, alternative addresses for specific address types).

Contract-relevant data is copied from the solution quotation into the contract document. Solution quotation items become subscription contract items in the subscription contract document. You can only change a subscription contract using change processes.

The preceding integration overview shows the Solution Quotation Scenario in the Contract Accounts Receivable and Payable (FI-CA) context. After accepting the Solution Quotation (Order Fulfillment), the Billing Document Requests and Billing Plan items are created and transmitted to Billing in FI-CA → CI Billing.

All changes regarding the solution quotation are done in outgoing orders. Changes to a subscription contract are made using subscription contract change processes. Let’s discover how it is done.

When a subscription order or solution quotation with a recurring fee is submitted, a subscription contract is created. During contract distribution to FI-CA, contract items, for which recurring fees exist in the pricing elements, are identified. A dependent billing plan is created in SAP Convergent Invoicing for these items, in addition to the provider contract item.

This billing plan holds the information about the billing cycle, reference to the provider contract item, payment amount, and payment currency. You can now use this billing plan to request the recurring fees, using the corresponding features in SAP Convergent Invoicing.

Subscription products that are used in subscription orders can have an assignment to a charge plan in SAP Convergent Charging, using cross-catalog mapping to support complex consumption-based pricing models.

When a subscription order, with a usage-based fee, is submitted, a subscription contract is created. During contract distribution to FI-CA, contract items for which a cross-catalog mapping exists are identified and a provider contract with the corresponding assigned charge plan is created. Incoming usage will then identify the provider contract in SAP Convergent.

Charging during charging, derive the price, and send the resulting billable items to SAP Convergent Invoicing.

A one-off charge is a charge which has only to be paid once, for example, an activation fee or suspension fee. The one-off charges are delivered to SAP Convergent Invoicing in the form of billable items and later provided, either on the customer's invoice together with usage charges, or on a separate invoice.