Important Subscription management improvements in Oracle E-business 12.2.6

November 21,2016

Subscription business model was pioneered by magazines and newspapers, but is now used by many businesses. Rather than selling products individually, subscription sells periodic (monthly or yearly or seasonal) use or access to a product or service. 

The major reason behind opting this kind of model is for flexible billing, flexible pricing, add /modify/downgrade services frequently, to avoid long term lock down with only one service, and potential opportunities for cross sell and up sell for sellers. In today’s world as most customers are moving towards SaaS or Pay-per-view kind of model, so, this subscription type economy is becoming very popular. 

Industries that use this model include - mail order, book sales clubs and music sales clubs, cable television, satellite television providers with pay-tv channels, satellite radio, telephone companies, cell phone companies, internet providers, software providers, websites (e.g., blogging websites), business solutions providers, financial services firms, fitness clubs, lawn mowing and snowplowing services and pharmaceuticals, as well as the traditional newspapers, magazines and academic journals etc. Typically transactional order fulfillment economy is focused on single sell, whereas subscription economy is focused on the maintaining ongoing relationship with customer. The model of future business is not purchase of good and services, but a price provided to customer for an ongoing relationship. 

Gartner forecasted earlier that by 2015, 35% of Global 2000 companies with non-media digital products will generate up to 10% of their revenue from recurring models. Researchers and analysts agree that this subscription business models based on digital commerce will soon be adopted in every industry, and that they will drive significant revenue growth in the coming years. 

This model will enable enterprises to maximize customer loyalty, secure predictable revenue, and often gain a significant competitive advantage. Subscription order types has its own life cycles and that depends on following events:

  • Sign up/Trials
  • Continuous subscription
  • Upgrade/ Top-up
  • Change Usage patterns/Upgrade subscription/Change in Plans/Downgrade plans
  • Renew
  • Cancellation
  • Credit
  • Netflix, Amazon, Salesforce, Spotify, Hulu, zipcar, VMware etc. are example logos of Subscription Economy. Key Enterprise Functions in this model are:

  • User/usage based licensing and subscription management
  • Allow for per-usage tracking and management
  • User/usage based billing and invoice management
  • Allow for special coupons, deals, promotions, etc.
  • Allow Renewals / Upgrade/ Add-ons/RMA
  • Provisioning
  • Revenue Recognition
  • Customer Data Management
  • Product / SKU management
  • Complex Pricing
  • Service bundling
  • Payment Gateway integration and Payment acceptance mechanics
  • Analytics visualize usages, billing, and other KPIs
  • Recurring Billing
  • Multi-currency and multi-country support
  • EDI Integration
  • Major Subscription Billing providers are: