Explaining Allowances

To understand allowances, we will extend the business example from the previous units. The company O2C wants to offer packages of prepaid balance to its customers. Customers can buy these packages for a certain price. Each package entitles you to consume services up to the price the package was bought for, plus a bonus amount of a certain percentage of the purchase price. The bonus percentage increases with the package size to form an incentive to purchase larger packages. Each package must be consumed within a period of two months. Any balance left at the end of the allowance validity will expire along with the allowance.

The following table provides an overview of the packages offered by OTC.

When the customer consumes cloud services, any balance should be settled against the fees charged for the service.

With the "Allowance Management" feature, by modeling allowances and their associated usage, you can manage the service add-ons of your charge plans. Allowances can be used to implement the following:

• Discounts on a certain volume of service usage, for instance a 10% discount on the services offered up to a limit of 1000,-€ revenue.
• Prepaid service usage packages that offer services to be used at lower rates.
• Packages of free services offered as promotions or as compensation. For instance, 100GB of free traffic.

An allowance has a start date and an end date. These dates form the allowance’s validity. The end date of an allowance can be extended if necessary. An allowance can only be consumed when it is in an "active" state.

Each allowance usually has one or more counters that are used to count something. This needs to be tracked for business reasons during the validity of the allowance. In case of a package of free service usage, the counters are used to track how many units of the service are still available to the customer free of charge.

Allowances are created and managed on a contract level. This means that all items of a contract can (but don’t have to) access the allowance from a technical perspective.

Each allowance is identified by a unique identifier.

An allowance can be limited in quantity and / or limited in time.

Just like charges, allowances contain calculation rules that specify how exactly service usage is settled against the allowance’s balance, how the remaining balance is depleted, how top-up processes work, and so on. These rules are implemented using the same tree logics that you are already familiar with.

Allowances can (but don’t have to) create billable items.