BY VIZIO CONSULTING INC.
Today, while customers desire to have predictable costs that grow with the value they receive, vendors aspire to have predictable revenue streams that grow with opportunity. While customers want great value with money, vendors look for revenues that scale with delivered customer value. Enterprises have started jumping into this hot market to build software and services required to support the delivery of offerings based on outcomes/usage rather than a one-time sale. SAP has always been at the forefront of providing enterprise-grade software solutions, accommodating the changing customer needs and expectations. From a comprehensive R/3 to SAP S/4HANA, SAP has been embracing the wants of the time. It is a huge opportunity for SAP to integrate the best solutions and provide anything that customers need as a service. SAP is geared up to enable Digital Asset Providers to sell Subscription software and monetize the revenue, which covers master data for software, services, and business partners, solution order and subscription order capturing, software entitlement tracking, billing, and revenue recognition in an integrated solution. The customers from various segments such as Net New: Mid-Market; High Growth and existing SAP Customers with a B2B focus.
Benefit of Saas For S/4HANA Customers
- Higher Margins: Software companies are increasingly adopting the as-a-service approach and transaction-based business models to capture higher margins. The software-as-a-service focuses on key functions, improving total customer lifetime value through reduced churn and increased upselling and cross-selling.
- Ease of Use for end-users: Process simplifies customer purchases and renewals.
- Increased efficiency and effectiveness in a maturing business.
SAP Cloud Solution Scenario
- SAP Solution Order Management supports business transformation from selling products to higher-margin solutions. It has a business scope to include consumption-based business by integrating with SAP Subscription Billing. It is enabled to offer/bundle distinct product sales/physical items, services, maintenance contracts, subscriptions, and projects in a single order and invoice. In a nutshell, Solution Order allows ‘one-stop shop’ solutions that address complex end-customer problems.
- SAP Subscription Billing helps shift from traditional one-time fixed price sales to consumption-based business by integrating with SAP Subscription Billing. Its core capabilities include Model subscription-based (digital) products, Manage the order for subscription components and Control subscriptions throughout their lifecycle and Generate subscription billing data in various formats: one time, recurring and consumption charges.
SAP Entitlement Management is used in Subscription business models where physical products, digital assets, and other services are bundled together, the ownership of entitlements of each item, usage data, and 360degree view of customers becomes business imperative. SAP Entitlement Management manages any right of usage, authorization, access, or permission that is given to a customer. These “rights of usage” are called entitlements and can be software specific, such as licenses, downloads, updates, free trial periods, etc., and can also relate to maintenance and support services, training, as well as warranties for physical hardware.
Business Use – Case
- Orchestration of various order elements
- Tracking of related entitlements for an offering (define entitlement offering with multiple rights, automated creation, fulfillment orchestration)
- Flexible pricing plans and subscription modeling – example: seat-based pricing or volume-based (with pre-payment)
- Dynamic handling of changes during subscription lifecycle
- Automated finance incl. revenue recognition, consolidated billing, and invoicing
- Profitability analysis of the offering
Conclusion
If you want to transition seamlessly from traditional one-time fixed price sales to consumption-based business Models, SaaS for Digital Asset Providers is your go-to solution.
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