1. #10527 – OAUG Contracts SIG
Monday April 23, 2012
1:15pm to 2:15pm
Location: Lagoon A
Service Engineering
Using Oracle Service Contracts for building competitive Services & Subscriptions

2. 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

3. Oracle Service Contracts
Standardize. Streamline. Comply.
Jennifer Sherman
Sr Director Product Strategy

4. 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

5. 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

6. 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)

7. 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

8. Oracle eBusiness Suite Modules
• Oracle Order Management
• Oracle Service Contracts
• Oracle Install Base
• Oracle Configurator

9. Service Value Chain
Configure, Price, Quote
Use Order Management to configure, price and
quote the service
Configure,
Create Contract & Fulfill Price, Quote
Use OM/Contract integration to create the Contract
Bill Customer
Bill the customer from Oracle Contracts (Release 12 Renew the
Create
feature) & Recognize Revenue & Tax calculation Contract at
Contract &
the end of
Fulfill
Manage Configuration over Contract LifeCycle
lifecycle
Manage the Configuration through Install Base and
update contract price using Service Price Update
Renew the Contract at the end of
Manage
LifeCycle Configuration
Bill Customer
over Contract
Use Process definitions and independent conditions lifecycle
to create a renewal process

10. 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

11. Solution Benefits
• 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

12. CASE STUDIES

13. 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.

14. 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

15. 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

16. Business Process Flow

17. Feedback & Questions
• Feedback & suggestions from members
• Questions

18. SAMPLE SETUPS

19. Subscription Management – Key Setups

20. Subscription Management – Key Setups

21. Subscription Management – Key Setups

22. Subscription Management – Key Setups