It is important to understand the SAP S/4HANA for billing and revenue innovation management (BRIM) key capabilities before we focus on the required capabilities for the Quote-to-Cash Process.
These key capabilities are:
- Monetize New Business Models
- Move from product sales to selling services and outcomes based on subscriptions and real-time usage-based services.
- Support Business Models
- Support B2B/B2C/B2B2C models in either a prepaid or postpaid strategy using business rules-based automation for invoicing and accounting processes.
- Support Multisided Revenue Models
- Unlock the revenue potential of your ecosystem, including with transparent revenue sharing models.
- Scale to the Volumes of the Future
- Support digital business, the IoT, and connected devices with high volume automated and transparent processing.
Required Capabilities for Quote-to-Cash Process
As companies look towards adding subscriptions, pay-per-use, pay-per-outcome, and other business models, they are discovering that their existing Quote-to-Cash process cannot accommodate these new models.
A key lesson learned by companies that have adopted a recurring business model is the importance of automating all the steps in the Quote-to-Cash process. As you can see, it is more than billing with the ultimate goal of keeping a customer happy, so they renew and grow their relationship with your company.
Here are the seven capabilities that you need to support subscriptions and recurring revenues.
- Offer
The process must support the ability to create and manage offers using one or more pricing and billing options in addition to the ability to create bundles of physical products, services, and subscriptions.
- Quote
Help sales close deals faster with guided selling to automate the creation of sales quotes, especially if you offer complex products and services. Once a customer has been signed, you need robust contract change management capabilities to allow customers to change their contracts at any time.
- Order
To deliver a seamless customer experience, you must make sure that orders are accurately fulfilled and provisioned with speed and accuracy.
- Bill
With subscriptions, usage or outcome-based plans, bundles, and third-party offerings, you must collect data from multiple systems for billing purposes. It is important to efficiently and accurately collect, track, and make the data usable for the billing system. When data is collected across different systems, you must ensure that customers are presented with a single bill that includes line-level details to mitigate billing disputes.
- Collect
A key part of the Quote-to-Cash process is to offer flexible and streamlined payment processing and routing. If you are invoicing your customers, having a centralized system to manage receivables, collections, dunning, and credit is key to removing manual activities and reducing DSO. If you are reselling partner products and services, automating the tracking, calculating, and settlement of partner revenue-share is critical in supporting a multisided business model.
- Recognize
Recurring revenue models increase the complexity of revenue recognition and accounting. Integration into your financial system is key to complying with ASC 606, IFRS 15, tax regulations, and other financial requirements.
- Evolve
Use customer insights and analytics to create new offerings and bundles that support renewal, upsell, and cross-sell initiatives.