Business-to-Consumer (B2C) refers to services and products that are provided directly from a business to a customer.
Business-to-Business (B2B) refers to services and products that are provided by one business to another business.
Describing SAP Billing and Revenue Innovation Management
Objectives
After completing this lesson, you will be able to:
- Explain convergent charging for SAP Billing and Revenue Innovation Management (SAP BRIM)
- Summarize subscription and consumption change economy
- Provide industry examples
- Describe convergent charging for Billing and Revenue Innovation
Subscriptions and Consumptions in Our Daily Live
Subscription and Consumption of Change Economy
The subscription and consumption economy has revolutionized how businesses engage with their customers. Innovations in business models have a singular aim of retaining customers by building long-term relationship with them and not focusing on single, one-off transactions.
Industry Examples
Business Example: Postal
Facts:
Parcel X is postal company in North America. Most Parcel X customers are B2B Business Customer with customer hierarchies:
- Online Shop New York
- Fresh Food New York
- Postal Shop New York, etc.
- Master Agreement for customer groups are realized in BRIM Solution.
Postal industry needs a configurable price model with characteristics:
- Surcharge (CO2, Insurance, destination)
- Fees depending on delivery zones
- Dimensions of goods (weight, length, …)
- Channels (Road, Airfreight,…)
- Service level (Tracking level, …)
Business Example: Railway
Railway X is operating a large railway net in Europe. The company offers different tariff types for different customer groups: Prepaid Tariffs, subscription based discounting (for example, Flat Rate or 50% price reduction).
Revenue sharing with other operating companies like local Bus Companies, local taxis, Railway operating companies in other countries is daily work.
The usage is represented by a journey from point A to point B.
Business Example: Technology
Soft&HardMix is multinational company in High Tech industry withB2C and B2B business. It develops, manufactures, licenses, supports and sells computer software and consumer electronic, personal computers and related services:
- BRIM support their business model transformation from a vendor to a recurring revenue business model.
- A lot of diverse technical data sources make it reasonable to use of SAP Convergent Mediation to improve data quality according to completeness and integrate new services without revenue leakage.
- Use of SAP FI-RA as an additional subledeger in order to create the legally correct accounting view on the operational revenue of hardware and subscription bundles.
Business Example: Financial Services
Pay4you is credit card company in Europe with B2B and B2C customer. They run transaction to payment.
Financial services meet the following challenges:
- Extreme high volume transactions (number growing!).
- 3-4 revenue shared partners involved.
- Business customer with negotiated master agreement (Discounter, etc.).
- Bonus tracking (collect service miles) and upgrade/downgrade service level.
Business Example: TV SAT/Video on Demand
TV Orange is a SAT TV company. TV Orange runs a B2C Business with customers that rent a TV set top box that allows them to:
- Subscribe to thematic TV services including bundle of products for a limited/unlimited period of time.
- Buy some events (VOD, Sport, Concerts ….).
- Benefit from free/promo packages.
Example Service 1: "Football" – 5 Football channels
- Product 1: "Football promo" – seven-day promo subscription to 5 football channels.
- Product 2: "Football 14" – 14-day subscription to 5 football channels.
- Product 3: "Football 365" – annual subscription to 5 channels.
Business Example: E-Mobility Company
Business overview E-Mobility company:
- Implements and operates a network of charging stations for electrical vehicles across Europe.
- Customers can access charging stations with their mobile device (phone, badge, RFID-token…).
- Two types of customers:
- Direct customers: pay by phone at the station.
- Indirect customers have a contract with a partner and pay by invoice.
Direct customer pricing
Usage-based pricing: customers pay per kilowatt hour (kWh), per minute (min) or per session depending on the location of the station. Examples:
- France 0.79€ / min
- Germany 0.77€ / kWh
- Spain 8.40€ / session
Indirect customer pricing
Mix of subscription- and usage-based pricing: customers pay a monthly fee and for the energy delivered. Prices defer from a partner to another.
Example: Partner X 17.95€ / month and 0.31€ / kWh.
Mix of subscription- and usage-based pricing: customers pay a monthly fee and for the energy delivered. Prices defer from a partner to another.-Example: Partner X 17.95€ / month and 0.31€ / kWh.
Subscription and Consumption
The O2C company offers cloud infrastructure to their customer. The product Cloud Selection Service is a subscription and is paid monthly. The monthly fee depends on the selected service level agreement.
There are four possible service level agreements:
- Pay as you Go
- Silver
- Gold
- Platinum
Depending on the selected service level agreement, the customer can consume a number of CPU hours, RAM hours, and GB for bandwidth for free.
The product has a minimum subscription duration of 24 months.
The Components of SAP BRIM
SAP BRIM, key Capabilities:
- Monetize new business models: Move from product sales to selling services and outcomes based on subscriptions and real-time usage based services.
- Support your business model: Support B2B/B2C/B2B2C models in either a prepaid or postpaid strategy leveraging 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
With SAP BRIM, service providers can bring innovative pricing offers to market faster than the competition with an intuitive user interface that requires zero coding.
The solution supports prepaid, postpaid, and hybrid models to monitor customer accounts in real-time and to improve customer sentiment by giving subscribers control over their spending.
Pricing for complex B2C scenarios, such as family plans, is supported out-of-the-box, as are B2B scenarios such as credit pooling and sophisticated tiered models. Calculation of partner revenue share can be configured along with customer pricing.
Marketing and sales are empowered to craft pricing models that reward loyalty, offer partners flexible terms, and ensure accurate settlement.
Finally, operations can consolidate pricing for multiple services and multiple lines of business on a single, high-performance platform that dynamically scales to extreme transaction volumes with 99.999% high availability.
SAP S/4HANA for billing and revenue innovation management contains multiple solution capabilities in its End-to-End (E2E) process:
- SAP Subscription Order Management
The software component for subscription order management is SAP S/4HANA Service.
Manage Subscription → Subscription Order Management.
Product Catalog and Offer Management
Order Capture
Order Distribution
- SAP Convergent Mediation
Collect Usage → SAP Convergent Mediation.
Online and Offline Mediation
- SAP Convergent Charging
Price and Charge → SAP Convergent Charging.
Service Pricing and Modeling
Online and Offline Rating
Partner Revenue Share Calculation
Online Account Balance Management
- SAP Convergent Invoicing
Bill & Settle, Handle Payments → SAP Convergent Invoicing.
Customer Billing and Invoicing
Partner Payment Statements
- SAP Customer Financial Management
Manage Credits and Collections, Provider Customer Care → SAP Customer Financial Management.
Revenue Management
Payment Handling
Credit Management
Collections Management
Financial Customer Care
Dispute Handling
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