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30 changes: 15 additions & 15 deletions src/pages/articles/sap-ssc-solution-sales-contracts.html
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page-title: Ketch Partners
page-description: Ketch Partners About Us Page
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page-description: Ketch Partners Subscription Contract Article
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<div class="simple-article-header">
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<p class="article-date-read">Published on: 1 December, 2018 - 3 min read</p>

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Configurable Subscription Contracts Drive Higher Revenue and Margin Growth
Subscription Contracts Drive Revenue And Margin Growth
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<p class="article-author-comments">
<em>by <a href="#">Chris York</a></em>
<em>by <a href="#">Chris York</a></em>
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<img class="article-image" src="{{root}}assets/img/articles/sap-ssc-solution-sales-contracts-800x350-01.jpg" alt="SAP Greenfield Implementation">
<img class="article-image" src="{{root}}assets/img/articles/sap-ssc-solution-sales-contracts-800x350-01.jpg" alt="SAP Configurable Contracts">
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### CHALLENGES

Our client in the hi-tech IT services industry struggled with offering subscription-based services (contract entitlements) that aligned with their business model. The client offered nine core service pillars each of which had numerous service offerings. This challenge coupled with their rapid pace of acquisitions and ever-expanding service options demanded a flexible solution that made the sales process as well as the servicing of the contracts manageable for the future.
Our client in the hi-tech IT services industry recognized the market was changing. They struggled with offering subscription-based services that aligned with their business model. The client offered nine core service pillars each of which had many service offerings. Their rapid pace of acquisitions demanded a flexible solution. Ever-expanding service options required a simple sales process. Servicing the contracts was a challenge for a national field service team.

### INSIGHT

Ketch partnered with our client to define a single contract that allowed line item control of a sale, internal lease, or external lease for any regular product or configurable product or service. We also solved merging quantity and value-based subscription offerings onto a single contract in SAP, minimizing the number of documents in the system and simplifying the periodic billing process. To support this contract we leveraged the SAP product, **SAP SSC** (Solution Sales Configurator) to deliver guided selling along with configuring the contract terms to deliver a transformative user experience.
Ketch partnered with our client to deliver a contract that supported their business. This single contract allowed line item control of the transaction. The line item supported a sale, lease, or rental for any regular product or service. We merged quantity and value-based subscription offerings onto a single contract in SAP. This minimized the number of documents in the system. The single contract simplified the periodic billing process. We leveraged the SAP product, **SAP SSC** (Solution Sales Configurator) to deliver guided selling. This allowed configuring the contract to deliver a transformative user experience.

### SOLUTION

We focused on three major areas to deliver an optimized business process – the recurring revenue contract model, configurable services, and CPQ (configurable pricing and quotation) to deliver the end user experience. First, we delivered a structured, configurable service that bundled the nine pillar services options and various values to allow a platform for offering all services through a configurable user experience. SAP provides functionality to model configurable materials affording multiple options and choices to be selected during the sales process. This is utilized most often in a manufacturing industry (think of cars, air conditioning, or industrial pumps), but Ketch leveraged this capability for services. We delivered a structured (nested), configurable service that made quoting recurring services straightforward and consistent. Proof of concept services was modeled to allow key decision makers to see the trade-offs based on each approach. Once defined the option values created in the configurable model gets mapped to the recurring service that shows up on the quote i.e., the customer wanted backup service, for a Linux server, 500GB.
We focused on three major areas to deliver an optimized business process. The recurring revenue contract model supported all service offerings. Configurable services ensured accurate pricing and margins. And CPQ (configurable pricing and quotation) to deliver the end user experience. We first delivered a structured, configurable service that enhanced the sales process. All services were presented through configurable options in a web based user experience. SAP provides functionality to model configurable materials. These materials allow multiple options to be selected during the sales process. A classic example is the manufacturing industry. Cars, air conditioning, or industrial pumps are a few classic use cases. Ketch leveraged this capability to deliver configurable services. We delivered a configurable service that made quoting recurring services straightforward and consistent. We modeled proof of concepts options to allow key decision makers to see the trade-offs. The option values created get mapped to the service that shows up on the quote i.e., the customer wanted backup service, for a Linux server, 500GB.

Next, this service was leveraged by SAP’s SSC (Solution Sales Configurator) to deliver guided selling along with configuring the contract terms. An additional challenge to overcome was margin analysis on the quote – typically, unless services are procured at a specific cost they do not normally have a cost since your cost is actually accrued when you deliver the service by your employee posting time. To solve for this each service was analyzed for historical average costs and a statistical cost was assigned to allow a margin to be calculated at the quote stage.
The team used an agile approach to prototype process flows and screens and then transitioned to custom developed web apps to support the process. These apps were then connected to the CRM SQL database for storing and updating transactional data before it was synchronized with S/4HANA.
Next, this configurable material was leveraged by SAP’s SSC (Solution Sales Configurator). SSC delivered guided selling along with configuring the contract terms. An additional challenge to overcome was margin analysis on the quote. Procured services have a cost from the supplier. Services delivered internally don't have a cost until employee time is captured. To solve for this each service was analyzed for historical average costs and a statistical cost was assigned. This allowed a calculated margin at the quote stage.
The team used an agile approach to prototype process flows and screens. Then they transitioned to custom developed web apps to support the process. These apps were then connected to the CRM database. This transactional data was then synchronized with S/4HANA.

Finally, the recurring revenue contract was a challenge because the client wanted a single contract model to support any type of service – in some cases services were quantity based (Qty of 2 ea. Backup, Linux Server, 500 GB) and in other cases, they were value-based ($10,000 of on-site support). SAP provides different contract documents to handle value and quantity contracts, but Ketch was able to combine all offerings onto a single contract making servicing and maintenance of the customer much simpler over the lifecycle of the contract term.
Finally, the recurring revenue contract was a challenge to deliver. The client wanted a single contract model to support any type of service. In some cases services were quantity based (Qty of 2 ea. Backup, Linux Server, 500 GB) and in other cases, they were value-based ($10,000 of on-site support). SAP provides different contract documents to handle value and quantity transactions. Ketch was able to combine all offerings onto a single contract. This made servicing and maintenance of the customer much simpler over the lifecycle of the contract term.



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<p><img src="{{root}}assets/img/logo-top-bar-white-01.png" width="70%" alt="Ketch Partners Logo" /></p>
<br>
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<h5 class="text-center">Learn Why Ketch Partners Is Your Best Choice For SAP HANA Systems Integration</h5>
<h5 class="text-center">Learn Why Ketch Partners Is Your Best Choice For SAP HANA Systems Integration</h5>
<p class="text-center">Play the video to learn more</p>
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<h5>Ketch Partners</h5>
<p>Strategy. Transformation. Trust.</p>
<a href="#latest-news" class="button yellow">View Latest News</a>
<p>Decades of business strategy across industries. Over 30 years of business and digital transformation. Trust Ketch as your partner to transform your business.</p>
<a href="#latest-news" class="button yellow">View Latest Insights</a>
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