This new installment in our ongoing series on the Digital Solutions Economy (DSE) focuses specifically on the importance of Entitlement Management.
Basically, entitlements consist of "rights" that are awarded to a customer based on a contract or other agreement. Entitlements can include a wide range of offerings, such as access to a cloud service, number of user licenses, software support, hardware maintenance services, warranties, media access rights, or usage-based consumption rights.
In the Digital Solutions Economy, entitlements are simultaneously becoming more important and more complex to manage. The ability to support new DSE business models such as Everything as a Service often involves providing entitlements to give customers flexibility for managing their usage of services and products.
With customers more empowered in DSE to tailor their own bundled products and services, entitlements may be combined with other non-entitlements. For example, a one-off hardware purchase often is combined with rights to an ongoing service and/or media access rights, which also could be usage-based.
To make it even more complex, the customer could be empowered to make changes on the fly to things like usage level rights, numbers of users, additional content access, etc., all of which will dynamically change the mix of entitlements that need to be provisioned, tracked and reported as revenue.
The Key Role of an End-to-End Entitlement Management System
Within the end-to-end, quote-to-cash, DSE management model, having a robust, integrated Entitlement Management System (EMS) has become a critical factor for success. An EMS is effectively a bridge between sales and provisioning, with linkage to backend accounting and revenue compliance systems.
For instance, the Entitlement Management functions within SAP's Billing and Revenue Innovation Management (BRIM) portfolio provide flexibility for independently handling entitlement usage, tracking and changes on the fly between sales and provisioning, while also integrating seamlessly with other related processes.
Not only is the BRIM-based entitlement management functionality designed for seamless operation within the overall SAP S/4HANA ecosystem; it also can agnostically operate in conjunction with legacy or special-purpose billing and other backend systems.
Key Benefits of Optimizing Entitlement Management
For customers/consumers:
- Visibility across all of their related products and services
- Flexibility to make changes on the fly to bundles, usage levels, etc.
- Single unified billing with easy to understand usage and consumption details
- Better ability to understand and optimize overall value of their purchases
For companies offering products and services:
- Increased revenues, better predictability and reduced churn
- Reduced revenue leakage from untracked usage or consumption
- Agility for modeling and testing new entitlement offerings
- Ability to track detailed usage without impacting backend billing processes
- Integration with embedded analytics such SAP Analytics Cloud
- Seamless integration to revenue recognition compliance and reporting functions
As the leader in helping companies implement Digital Solutions Economy offerings and one of SAP's longest serving partners, Bramasol has deep expertise in combining all aspects of DSE business models, including Customer Engagement, Order Creation & Management, Delivery & Fulfillment, Billing & Invoicing, Payments & Collections, and Revenue Compliance.
The Bramasol DSE team also is able to "go deep" with regard to the BRIM portfolio and help clients tailor those elements of BRIM that are best suited for their specific application scenarios, including integration of Entitlement Management capabilities.
As the Digital Solutions Economy continues to drive significant disruptive changes across a widening range of markets, the use of entitlements has become a key success factor.
For companies offering various types of entitlements, a holistic, end-to-end approach will be a critical element for satisfying customer expectations and ensuring cost-effective scalability to achieve overall business goals.
For more information, check out these additional resources:
- Podcast: SAP's Carla LeJeune on Optimizing Entitlement Management
- Podcast: SAP’s Pete Graham on Anything-as-a-Service and How SAP Enables XaaS
- Webinar video: Managing Entitlements in the Digital Solutions Economy
- Webinar video: Power Transition to DSE with SAP Cash and Treasury Management
- Webinar video: Automating Revenue Management for the Digital Solutions Economy
- eBook: Using DSE to Create Integrated, Scalable & Sustainable Business Models