Rating Delivered Value with SAP Subscription Billing
For usage-based business scenarios, the ability to charge your customers based on actual product and service consumption and delivered value rather than fixed numbers and cycles is key. In the end, your customers prefer to pay for what they get rather than sticking to an unchangeable, scheduled charge that is unassociated to what they actually consumed. And ultimately, you want your customers to be happy.
SAP Subscription Billing now offers you a feature that allows you to do exactly this: Rate usage records individually irrespective of the billing cycle of a subscription and thus rate actual consumption when it occurs. Moreover, you can now create complex usage records with items and item fields to reflect additional, price-relevant information. For each item of a usage record, a separate charge is then calculated and reflected on the resulting bill.
Let’s take a closer look at an example to see what this new feature is all about.
Example Use Case: Charging an Electric Vehicle
To make this example as simple and easy to understand as possible, we are going to focus on usage-based charges and rate elements only, although you can of course combine different types of charges in your own pricing configurations.
We are going to go more or less step by step through the different apps in SAP Subscription Billing and the Price Calculation service for SAP Subscription Billing to see what is essential in setting up a pricing model with individual usage rating. We will first look at the field catalog, price element specifications, and pricing schemes in Price Calculation before jumping to SAP Subscription Billing. There, we will go through two configuration settings in Business Configuration, create a rate plan template, a product, and a subscription to then eventually configure a usage record with items and see the resulting bill.
For our example use case, an energy provider wants to offer a subscription model with individual usage rating for charging electric vehicles at public charging stations. When using a charging station, customers are then immediately charged based on the energy they consumed, the type of power connector they used, and the time the vehicle is parked at the charging point.
For this scenario, the provider has to charge usage records with two items:
- Item 1 reflects the ID of the charge point operator, the energy consumed during the charging process, as well as the type of power connector used.
- Item 2 reflects the time the electric vehicle is parked at the charging station.
Defining a Pricing Model Using the Price Calculation Service for SAP Subscription Billing
In the Manage Field Catalog app in the user interface of Price Calculation, the provider creates the fields following in the table below. These fields are then later used to define lookup tables and input properties for the price element specifications.
|EV_ChargedEnergy||Total amount of energy charged during a charging period, defined in kWh (KWH)||Quantity||External|
|EV_PowerType||Type of connector
Values: AC, DC
Abstracted ID of the charge point operator
Values: own, other
|EV_ParkingTime||Total parking time, defined in hours (H)||Quantity||External|
The provider then configures the rules for generating two price elements in the Manage Price Element Specifications app: One price element for consumed energy in relation to the power connector used and the operator of the charge point (EV_Energy), and one price element for the parking fees for the time the vehicle was parked at the charge point (EV_Parking).
In the price element specifications EV_Charging and EV_Parking above, you can see the pricing trees showing the steps performed to calculate the price elements as well as the input and output fields of the referenced lookup tables.
In the Manage Pricing Schemes app, the provider then creates a pricing scheme EV_Charging Session which calculates the charges of the two price elements:
- A charging fee for the consumed energy
- A parking fee for the parking time
Pricing schemes define the different price elements and their relationship in order to calculate charges and specify the procedure and sequence in which pricing is executed.
Once all this has been set up in Price Calculation, the provider can continue with the setup in the user interface of SAP Subscription Billing.
Configuring Individual Usage Rating in SAP Subscription Billing
To enable individual rating of usage records, the provider performs several steps in SAP Subscription Billing.
In the Business Configuration app, the provider selects the pricing scheme created before and maps the fields created in Price Calculation to usage record items in the Pricing Field Mapping settings.
The provider then proceeds to the Rate Elements settings of the Business Configuration app to create a usage-based rate element. By selecting the usage rating variant Individual, the provider specifies that each usage record is rated individually irrespective of the billing cycle defined in the rate plan of a subscription.
As mentioned in the beginning, the provider wants to charge usage records with two items. One item reflects the energy consumed during the charging process as well as the type of power connector used for charging and the operator of the charge point. The second item reflects the time the electric vehicle is parked at the charging station.
For this scenario, the provider adds four usage record item fields to the rate element. These are the fields of the pricing scheme EV_Charging Session that have been mapped to usage record items in the previous step.
As the basic configuration is now done, we need a rate plan template to define all billing-related settings and add the usage-based rate element created before. Therefore, in the Rate Plan Templates app, the provider creates a rate plan template (with the pricing scheme EV_Charging Session) adding the rate element EV Charging created before.
In the Products app, the provider creates a product and uses the rate plan template to create a rate plan with a pricing scheme and assigns it to the product. The assigned rate plan is then always used when a subscription is created for the product.
In the Subscriptions app, the provider creates a subscription for the product Electric Vehicle Charging and proceeds to the Usage app to create a usage record with items.
Usually, usage data is recorded by an external metering system, posted to SAP Subscription Billing, and then displayed in the Usage app through a list of usage records. But in our use case, the provider creates a usage record manually.
By selecting a technical resource type with individual usage rating, the provider is able to create items for the usage record. The technical resource type identifies the service or resource for which usage is collected and measured.
The provider now creates two items with items fields. Item 1 for the parking fee with the item field EV_ParkingTime. Item 2 for the charging fee with the item fields EV_ChargedEnergy for the consumed energy, EV_ PartyId to identify the charge point operator, and EV_PowerType for the type of power connector used.
Finally, the provider opens the Bills app to see the resulting bill.
On the bill for our use case above, the provider can see in the charge details of the bill item that for each item of the usage record, a separate charge has been calculated.
Do you want to learn more about Rating and Pricing with SAP Subscription Billing? Then have a look at our documentation on the SAP Help Portal.
To learn more about SAP Subscription Billing with Price Calculation, make sure to follow the tags SAP Subscription Billing and Price Calculation and also check out the following resources: