17 Ways SAP Provides Customers with Everything as a Service

A range of new or modified business and technology capabilities are required to successfully implement as-a-service models. In this post, we provide an overview of the SAP solutions that deliver these capabilities.

These enable the ideation, implementation, and operation of engaging, value-adding, and profitable as-a-service models.

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Contract Relationship Management

Key performance indicators (KPIs), in particular those related to SLAs, must be captured and monitored throughout the entire customer lifecycle. Effective subscription and entitlement management is required to drive positive margins.

• SAP S/4HANA provides the customer, product, and contract master data and enables contract management with all terms for fulfillment and financial core processes.
• SAP Billing and Revenue Innovation Management enables scalable billing of simple to complex pricing structures based on metering.
• SAP Configure Price Quote enables sales executives and their support teams to tailor XaaS contracts to specific customer needs, while ensuring that products and services can be delivered and are profitably priced.
• SAP Commerce Cloud and SAP Sales Cloud enable the management of contracts and interfaces with customers as well as the management of subscriptions.
• SAP Entitlement Management controls access to digital content and manages entitlements for subscriptions by providing access to products and features for defined time periods.

Subscription Billing, Revenue Recognition, and Partner Settlement

Selling product usage or outcomes instead of products typically requires periodic billing based on simple subscription offerings or advanced consumption metering. Customers will also expect a single invoice integrating different as-a-service components, which is also an important prerequisite for complex revenue recognition and partner settlement processes that must be automated to enable scale and reduce cost. The following solutions support subscription billing, revenue recognition, and partner settlement:

• SAP Billing and Revenue Innovation Management enables designing and executing revenue streams for innovative product and service combinations and subscription billing schemes.
• SAP S/4HANA Finance handles correct, efficient, and compliant revenue recognition for multiple generally accepted accounting principles (GAAP) in parallel. This solution can also automate financial processes for asset management.
• SAP Experience Management captures customer sentiment and facilitates scalable approaches to react to customer needs.

Digital Twins and Operational Lifecycle Management

To ensure maximum outcomes, service departments must prioritize their capabilities based on contract-related KPIs. Effective dispatch, failure identification, and issue resolution must align with uptime SLAs. Many organizations are now utilizing IoT sensors for monitoring and for applying predictive capabilities to identify repairs before issues arise.

The following solutions support the use of digital twins and operational lifecycle management:

• SAP Service Cloud supports the efficient management of service requests and facilitates parts distribution.
• SAP Asset Performance Management enables the management of assets and their operational improvement.
• SAP Business Network for Asset Management captures asset information as operated, prescribes maintenance needs, suggests actions to avoid predicted failures, and allows you to manage remote assets.
• SAP Business Technology Platform (SAP BTP) for IoT and remote monitoring is critical to capture the operation and health of assets.
• SAP Field Service Management allows for the efficient management of field services to ensure alignment with the contractual KPIs/uptimes.

Profitability and Risk Management

Since most services are rather customer specific, profitability management prior to drawing up contracts and during contract execution is critical. Many influential factors should be considered to manage risks.

The following solutions support profitability and risk management:

• SAP Profitability and Performance Management handles the actual performance and cost per contract and provides input for future pricing.
• SAP Analytics Cloud manages outcome-based operations that require holistic insights and reporting functionalities. SAP Analytics Cloud features an analytics platform to bring together data elements from both internal and external data sources.

Consumables and Spare Parts Management

Many subscription contracts cover consumables or parts. A robust supply chain that ensures the timely availability of all required parts and consumables mitigates the risk of unplanned downtimes, service level agreement (SLA) issues, revenue loss, and other potentially adverse impacts on customer satisfaction.

The following solutions support consumables and spare parts management:

• The spare parts planning functionality in SAP S/4HANA allows organizations to optimize spare parts acquisition through effective planning and distribution and by balancing inventory to address SLAs and contractual KPIs to drive profitability.
• SAP Ariba facilitates the acquisition of consumables and parts, helping ensure that the sourcing of new materials or of materials from new suppliers occurs in a timely manner.
• SAP Business Network for Supply Chain creates a network of networks to enable the sourcing and tracing of materials.

Editor’s note: This post has been adapted from a section of the book Business as Unusual with SAP: How Leaders Navigate Industry Megatrends by Thomas Saueressig and Peter Maier.