Performing the Subscription Order Creation

Objectives

After completing this lesson, you will be able to:
  • Describe the Subscription Order Management process
  • Describe the Subscription Product in an overview
  • Create the Subscription Order

Business Example, Subscription Order Management

A subscription order for Cloud Selection Service is captured for an existing customer in SAP Billing and Revenue Innovation Management (BRIM) Subscription Order Management (SOM). The customer already has another subscription contract in the system.

The customer also has a contract account assigned as default for further subscription contracts. The department of the company orders a cloud selection service starting at 01.01.2020. They decide to select the service level gold out of pay-as-you-go, silver, gold, and platinum. Additionally, there's an activation fee of 399 Euro assigned for the installation of the service. The order includes a product offering combining a service, activation fee, and hardware.

Use the IP address as a technical identifier for your cloud service.

Subscription Order Management, Process Overview

A diagram of Subscription Order Management processes, highlighting key functions such as Product Modeling, Order Capture, Order Distribution, Contract Change Processes, B2B Features, and Solution Quote and Business Portfolio. The Order Capture section is emphasized with tasks like managing subscription orders, tracking order status, and credit management.

Definition of a Subscription Order

A Subscription Order:

  • Sell products or product bundle for different services and physical goods as hardware devices.
  • Contains long lifetime items which creates a subscription contract including usage fee with rating in Convergent Charging or Convergent Invoicing.
  • Contains long lifetime items which creates a subscription contract including recurring fee with rating in Convergent Invoicing.
  • Is created and stored only in SAP S/4HANA Service: Subscription Order Management.
  • Is the starting document within subscription contract lifecycle management.
  • Ext. PO number can be assigned on header/ item level, which is passed to FI-CA provider contract.

Industry Examples:

  1. Ordering Cloud Selection Services with CPU, RAM and Bandwidth Storage including subscription fee and usage rating – B2B Process.
  2. Ordering Car Sharing including activation fee for Membership including Usage fee: Price per minute driving – B2C Process.
  3. Parcel shipment with high volume usage rating per parcel – B2B Process.
  4. Ordering Streaming such as Netflix or Music downloads with subscription fee and no usage fee – B2C.
  5. Ordering a telecommunication family tariff.

The subscription order can be used as follows:

  • A subscription order for selling products and services for the creation of a subscription contract, such as usage-based charges, recurring, and one-time charges.
  • Change order for subscription contract changes.

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

You can do the following:

  • Search for subscription orders.
  • Create and maintain subscription orders.
  • Release a subscription order for subscription contract creation.
  • Maintain change orders.

Subscription Product Overview

The O2C company offers a Cloud Selection Service with various subscription plans (Pay as you Go, Silver, Gold, Platinum) that include different levels of CPU, RAM, and bandwidth, along with activation and license fees. The IT department of Video Cutting, a company dealing with cloud videos, chooses the Gold variant for their cloud infrastructure needs.

This business example of cloud service provider is followed in the exercises of the training.

Business example cloud service product for Subscription Order Management (SOM). A product bundle with an activation and usage fee is sold.

A Subscription Product:

  • Is or contains a recurring Fee.
  • Is or contains a usage-based Fee.
  • Is a combination of recurring Fee, Usage Fee.
  • Is or contains a One-Off Charge.

Industry Examples:

  1. Recurring Fee: Service provider offers a cloud platform access to this platform for 20 EUR per month.
  2. Usage Fee: Ordering Car Sharing including activation fee for Membership including Usage fee: Price per minute driving.
  3. Usage Fee Film: Price per Download.
  4. One-Off Charge: Service provider offers a Subscription Contract offering, together with the contract an activation fee has to be paid once.
  5. One-Off Charge: Contract change requires a change fee of 1000 Euro.

Subscription products that are used in subscription orders, may need to be invoiced periodically like a monthly fee for a cloud subscription.

When a subscription order with a recurring fee is submitted, a subscription contract is created. During contract distribution to Contract Accounts Receivable and Payable (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 may 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 that only has 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.

A flowchart illustrating the process of subscription and contract management, rating and charging, and billing and invoicing in SAP S/4HANA, detailing the transition from subscription orders to billing plans and associated fees.

Subscription Order Creation

A flowchart illustrating the order management process for an agent, including steps for sales consultation, customer identification, order capture, order distribution and fulfillment, and order monitoring. Each step includes specific tasks such as advising customers, preventing duplicate business partners, configuring subscription products, and updating order status.

SAP Subscription and Order Management is the application that handles the sales process in the SAP Billing and Revenue Innovation Management solution. The complete sales process is explained, from sales consultation, to identifying the customer, and to order capturing.

This process example shows the different steps an agent performs to capture and complete an order (step 1–3). When the order is captured and submitted by the agent, the order is automatically processed based on events in Order Distribution Infrastructure (ODI) (step 4).

The agent can track the progress of order processing at any time (step 5).

The image illustrates the process of creating a subscription order and contract in SAP S/4HANA Service, detailing steps from selecting the sold-to party and configuring the product to submitting the order and generating the subscription contract and sales order. Key elements include partner functions, product items, and technical resources.

This business scenario shows the creation of a subscription order.

The subscription order is a special sales order that can be used to sell product bundles that consist of physical products and subscription services. Subscription order has 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're assembled and offered.

When the subscription order has been released, a new subscription contract is automatically created, whereby items with a short lifetime, such as sales items or one-time fees stay in the order and items with a long lifetime become part of the contract. In the first step, you log on to the SAP Fiori Launchpad and go to the Subscription Order Management section. Here you select the Manage Subscription Order app.

Subscription Order Creation

Selection of the transaction type PRVO subscription order.

Step 1. At header level you need to select the following:

Customer Data:

Select an existing Sold-to Party. The Sold-to Party entered is also used for the required partner functions: Ship-to Party, Bill-to Party, and Payer and 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.

Contract Account:

This contains the information about the 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 Payable and Receivable (FI-CA) is activated a contract account needs to be maintained.

At item level you need to select the following:

Step 2. Product Data

The products entered in the subscription order are represented as items. Products can have complex models that produce additional sub items – this is called a product bundle. Enter the product- or item-related data, contract start date, product configuration, or technical resources and choose the contract accounts.

Step 3. Technical Resources

Enter additional information that is necessary for the sale of the service. For example, in the telecommunication industry technical connection data such as mobile number or SIM card number is entered. The technical resource is unique for each contract.

SAP Convergent Charging Tables

These tables are mapping or range tables in SAP Convergent Charging (CC) system. They're used in the SAP CC for pricing and in the charge plan for price determination. These tables are referenced in the Cross Catalog Mapping (CCM) within the product. In the provider order creation, they can be redefined at item level.

Step 4. Submit Order

After the subscription order is captured you need to submit it to trigger the order fulfillment. The result of the order fulfillment is the subscription contract creation. This leads to Step 5.

Only products and services that are contract relevant are copied into the contract, because they occur with a recurring frequency. An activation fee and a change fee are not contract relevant. They're considered as one time fees, hence, they're not copied into the contract.

With respect to the business example described above, the IT department of the Cloud Business company calls the O2C company and orders the product Cloud Selection Service. The agent of the O2C company captures the order in the system.

The image explains the billing cycle process, including derivation, scheduling, and assignment to contract accounts and subscription products, with examples from various industries. It also includes a screenshot of the Billing Cycles details configuration screen.

Flexible scheduling of recurring billing plan Items with the help of the billing cycle.

The billing cycle of the billing plan can be monthly, while the customer gets a monthly invoice.

The other way round is also possible. A customer can get yearly billing plan items but monthly invoices.

Diagram explaining Convergent Charging using Usage Charges for subscription-related fees, highlighting the roles of Technical Resource (CustomerID) and ServiceID, with industry examples and a screenshot of a Cloud Selection Service configuration.

The technical data allows you to define the identifier under which a customer consumes a service, such as a phone number or a car plate. This identifier is used by the system to rate the usages of this service.

Note

The same identifier can be used for rating the usages of different services like Voice, SMS, or Data.

Create a Subscription Order

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