#10527 – OAUG Contracts SIGMonday April 23, 20121:15pm to 2:15pmLocation: Lagoon AService EngineeringUsing Oracle Service Contracts for building competitive Services & Subscriptions

Agenda• Introductions – New Board

– Ashwin Pingali – Chair – Satyan Penmetsa – Co-Chair– Ravi Balakrishnan – Board Member

• Plans for SIG in Calendar year 2012– Social Media– Quarterly Webinars– Channeling Product enhancements and Queries to Oracle

• Oracle Service Contracts R12 – Enhancement Candidates– Jennifer Sherman – Oracle Sr Director, Product Strategy

• Service Engineering– Growth of Service & Subscriptions– Service Engineering : Definition – Service Engineering : How– Oracle eBusiness Suite: Service Contracts, Configurator & Install Base– Service Value Chain– Case Studies

• Managed Print Services for an Office automation company• Navigational subscriptions for airlines• Email marketing & usage based software services

Oracle Service Contracts

Jennifer Sherman

Sr Director Product Strategy

Standardize. Streamline. Comply.

Oracle Service Contracts Enhancement Candidates

Reduce contract leakage “Why am I losing money?”• Improve cancellation reason tracking and analysis

– Support capture of cancellation reason across all channels (web, call center, etc...)

– Prevent deletion of line/subline during contract renewal to force some users to cancel a service contract so that the leakage is properly reported

Improve service contract renewal efficiency• When performing Mass Change, cascade attributes in concurrent mode for large contracts

• Default invoice text from either the original contract or the renewed contract

• New window mass update service contract status, price, and start/end date

• Improve usability of displaying configurations when adding product to service contract

• Copy additional contacts during renewal process

• Re-value or re-price service contract when currency changes

Improve integration capabilities with web services• Create, update, terminate any service contract

• Any contract type - service agreements, warranty/extended warranty, and subscriptions

• Any contract line type – service, usage, tangible/intangible subscriptions

Service & Subscriptions

• Subscription & Service based business models becoming popular– Major software vendors are now offering subscription models for their

enterprise offerings Eg. Adobe, Microsoft– Office automation companies like Kyocera, Xerox etc are moving into

the Managed print services business – Social media companies like Constant contact, ExactTarget basic model

is subscription– With the growth of tablets we see the growth of the subscription

model for intangibles, in other words fulfillment is entirely digital

Service Engineering - Defn

• Service Engineering (like Financial Engineering) helps service providers build portfolios of offerings to help – Manage Risk (an aviation software provider priced the subscription

based on the size of the airplane. Liability Risk is higher when the aircraft is larger)

– Improve Resource Utilization (A web hosting provider offers promotions to rope in customers and improve server utilization)

– Boost Revenues ( Offer different configurations of a service aimed at different market segments)

Service Engineering - How

• Bundling – Creating pre-configured bundles of services.

• Unbundling – Allowing a customer to choose from a set of features each feature having a price.

• Versioning - adding or removing features or imposing usage restrictions

Oracle eBusiness Suite Modules

• Oracle Order Management• Oracle Service Contracts• Oracle Install Base• Oracle Configurator

Service Value Chain

Configure, Price, Quote

Create Contract &

Fulfill

Bill Customer

Manage Configuration over Contract

lifecycle

Renew the Contract at the end of LifeCycle

Configure, Price, QuoteUse Order Management to configure, price and quote the service

Create Contract & FulfillUse OM/Contract integration to create the Contract

Bill CustomerBill the customer from Oracle Contracts (Release 12 feature) & Recognize Revenue & Tax calculation

Manage Configuration over Contract lifecycle

Manage the Configuration through Install Base and update contract price using Service Price Update

Renew the Contract at the end of LifeCycle

Use Process definitions and independent conditions to create a renewal process

Subscription Management - Challenges

• Billing– Delayed– Deferred– Installments– PrePayments to be accounted for at time of Order Entry

• Credit and Rebill– Ability to Credit or Order a Line or Complete Order– Partial Credits --- Part of a Subscription Term– Upgrade and Downsize the Subscription order (based on budgets/PO approvals)

• Immediate Invoicing and Accounting– Ensure COA Reporting and Other Segments are accounted for– Bill a Subscription before or after term start of subscription

• Revenue Recognition – Deferred – Modify Monthly to Daily

• Multiple Currencies

• Global Standardization– Access licenses and Subscriptions for both tangible and electronic products– Standard Currency Based Templates for each OU– Subscription QA Process Automated– Flexible Pricing– Templates allowed for reduced data entry without customization

• Billing and Credits – Auto Accounting– Sales Tax and VAT through EB Tax and Vertex– Partial And Full Credits possible

• Automated Renewal processing– Renewals report from single source– No Spreadsheets

• Financial Reporting Standardized– Daily Revenue Recognition– Single Billings Report – Single Revenue Report

Solution Benefits

CASE STUDIES

Managed Print Services

• Bundling: Services are offered for a pool of assets. All printer assets are covered for

• Break-Fix service• Supplies• Fleet Management

• Charges are combination of Fixed & Usage based above a threshold

• Modules: Service Contracts, Install Base. Creating, management entirely through Web service interface and SOA.

Navigational Data for Airlines

• Airlines and aircraft owners purchase subscriptions for specific navigational data

• Unbundling: Configurator used to help customer choose specific geographic regions with each having a price.

• Bundling: Pre-built configurations or bundles sold for frequently used bundles like North America, World Wide etc.

• Versioning: A one-time use version of the Data was available, which can be used only once and customer doesn’t get any updates

• Modules: Order Management, Configurator, Service Contracts

Email Marketing

• Customer provides a platform for customers to manage their email marketing campaigns. Billing is based on Usage.

• Versioning: Used a versioning strategy to create different versions of the same subscription with different usage thresholds. Different packages had different thresholds of usage and price-breaks.

• Modules: Service Contracts & Install Base

Business Process Flow

Feedback & Questions

• Feedback & suggestions from members• Questions

SAMPLE SETUPS

Subscription Management – Key Setups

Subscription Management – Key Setups

Subscription Management – Key Setups

Subscription Management – Key Setups