The Power of Subscription Based Fulfillment via Oracle Service Contracts

Transcription

1 The Power of Subscription Based Fulfillment via Oracle Service Contracts The end-to-end solution for your subscription business that can save you time and money. Prepared by: Lee Huff, Grant Thornton LLP Session ID: 10098

2 Your presenter Lee Huff Senior Associate, Grant Thornton Kansas City, MO Executive summary Lee Huff is a Senior Associate with Grant Thornton in the Technology Solutions practice. Lee works specifically within the Oracle E-Business Suite and Oracle Cloud ERP spaces. His experience spans the Order to Cash, Procure to Pay, and Project to Profit business flows across several industries. He is also an Oracle Certified Implementation Specialist in Oracle Receivables R12 and Cloud Project Portfolio Management (PPM). Lee has experience across all phases of a project and brings expertise in planning, designing, building, testing and deploying solutions within the Oracle EBS and Cloud ERP environments.

3 About Grant Thornton We are the U.S. member firm of Grant Thornton International, a global organization of member firms providing audit, tax and advisory services to clients for more than 90 years. PEOPLE PARTNERS Over 10% revenue growth in the U.S. last year with a 13% increase in headcount $1.56bn revenues 35% of the companies on the 2015 Fortune 1000 list 39% of the companies on the 2015 Fortune 500 list 54% of the companies on the 2015 Fortune 100 list 25% of the companies on the Russell 2000 list OFFICES

4 Committed Oracle partner Specialized Partner of the Year, 2014 (EPM, NA) JD Edwards Excellence Award, 2015 Excellence Award, 2015 (Fusion Middleware Innovation at Serta Simmons Bedding) JD Edwards Excellence Award, 2016

5 Session Introduction Focus on XaaS and subscription business 1 Provides value for both customer and company customer convenience, flat rate, hassle-free company predictable recurring revenue, more easily calculate lifetime value of customer Proven Success in several industries Technology, Entertainment, Home Goods, Transportation, Healthcare Examples of Successful Subscription Businesses Dollar Shave Club Home Goods subscription only business (product) Provides consumable product as a service (hair razors) Purchased by Unilever in July 2016 for a reported $1.0 B Netflix Entertainment subscription only business (content) Provides streaming content as a service Considered largely responsible for replacing Blockbuster Truven Health Analytics (IBM Watson Health) Healthcare Technology partial subscription business (software) Provides software and content as a service via various media Spun off from Thomson Reuters in 2012 for $1.25 B, purchased by IBM in February 2016 for $2.6 B 1. Longanecker, Chuck. "Why You Should Use a Subscription Business Model." Entrepreneur. Entrepreneur, 19 Mar Web. 28 Feb

6 Session introduction (cont.) Focus on Oracle Service Contracts module of EBS Connection points with Receivables, Inventory, Installed Base, and Order Management also explored Session will not cover TeleService, Field service, Depot Repair or other service/crm modules Emphasis on subscription related functionality and features Subscription agreements, subscription contract lines, subscription templates/fulfillment schedules, item instances, and sales orders. Session will not cover functionality or features related to service, warranty or usage. NOTE: While this session is "release agnostic", the functionality described is specific to R12.1 Specific differences between R12.1 and R12.2 are discussed later R12.2 does introduce significant technical enhancements

7 Agenda Introductions How service contracts enables subscription businesses in EBS Service contracts overview Service contracts subscription fulfillment flow Key components of service contracts subscription fulfillment Subscription items Customer accounts, sites, and contacts Subscription agreements Subscription agreement contract lines Subscription templates/fulfillment schedules Billing schedules Item instances Sales orders Conclusion Q&A

8 How Service Contracts enables subscription businesses in EBS

9 Service Contracts overview Depicts typical service or warranty related integrations TeleService serves as the hub of most interactions. However not all modules are required for all situations 9

10 Subscription fulfillment flow Integrations specific to subscription agreements Note that some integrations vary from previous slide. Most important components/integrations discussed later 10

11 Key components of Service Contracts subscription fulfillment flow

12 Subscription items Managed in Oracle Inventory Focus on service attribute group Contract item type = subscription Template is subscription template used for fulfillment schedules (SC setup) Track in Installed Base is required

13 Customer accounts, sites and contacts Uses standard TCA customer setup Bill To and Ship To sites required Contacts available but not required Account Relationships also in play but not required

14 Subscription agreements Contract category = subscription agreement Only contract category to allow subscription lines Party roles available are merchant OU, subscriber, and third party Subscriber and third party have to be customers Includes standard SC information Customer info, contract dates, price lists, renewal info

15 Subscription agreements contract lines Designated by subscription line type Attributes cascade from header but can be changed on lines Dates can be changed to shorter than header dates Pricing and tax automatically calculated Subscription Template pulled from item setup

16 Intangible subscription templates Subscription type and media type extensible Represent type of product and associated medium Only used for reporting Fulfillment channel set to none No seeded fulfillment solution for intangible products Frequency Used only for reporting

17 Tangible subscription templates / fulfillment schedules Fulfillment channel = order management Activates schedule pattern and interface schedule Frequency used to default schedule. Schedule pattern can be adjusted to change schedule Sales orders are created in OM for every line on schedule

18 Billing schedules Independent from fulfillment schedules Allows for scheduling of billing separately Similar to fulfillment, billing scheduling can be adjusted for multiple combinations of periods Invoices are created in receivables for every line on the schedule

19 Item instances Automatically created in installed base for all subscription contract lines Uniquely identifies every instance of an item and customer combination Provides consolidated view of a subscription Includes customer info, item info, status info, and subscription dates Ideal source of information for intangible item fulfillment

20 Sales orders Created in Order Management via Subscription Fulfillment Program Always created as $0 orders Remember that all billing is done from SC Orders have Ship Only workflow and are Booked automatically Subscription Sales Orders are ready for shipment via Shipping Execution or other 3 rd party solution

21 Conclusion

22 Subscription fulfillment flow 22

23 Differences in Releases Drawbacks in R12.1 No public Import APIs Service Contracts Import does not allow tangible lines Service Contracts Import only allows 3 billing streams Service Contracts Import does not allow DFFs Enhancements in R12.2 All Service Contracts Import fixes are added in R12.2 except the ability to import tangible lines Subscriptions can be ordered via Order Management and interfaced from OM to SC Public Import APIs available New HTML web forms available (versus Java) 23

24 Conclusion Service Contracts powerful enablement of subscription businesses End-to-end solution for order to cash processes related to subscriptions Strengthened by other module features: Order Management, Receivables, Installed Base While there is no seeded fulfillment for intangible items, installed base has robust API capability that allows you to easily integrate to any platform Also great flexibility for billing Leverages existing EBS environment If you're already using financials and/or CRM you have a leg up Ultimately saving you time and money! 24

25 Q&A

26 Upcoming events Find Grant Thornton at these upcoming events: April 11-13: Modern Finance Experience and HCM World in Boston, MA April 18 webcast: Finishing strong in the ASC 606 marathon: An in-depth look at designing for success April 19 webcast: Including Taleo in your Oracle ERP investment April 24-27: SuiteWorld in Las Vegas, NV May 17 webcast: Oracle Cloud HCM releases, patches and enhancements, oh my! June 6-9: OHUG global conference in Orlando, FL June 8 webcast: Project management for HCM Cloud implementations June 14 webcast: Getting to know all about you "Profile Management" June 18-21: HIUG Interact in Orlando, FL July 13 webcast: Oh the places you will go be a Maestro, with composer in the clouds Find your silver lining in the cloud: grantthornton.com/silverlining

27 Please Complete Your Session Evaluation Evaluate this session in your COLLABORATE app. Pull up this session and tap "Session Evaluation" to complete the survey. Session ID: 10098

28 Thank You! Lee Huff Technology Solutions Senior Associate Grant Thornton LLP 28