8 Configuring Charge Offers

Learn how charge offers function in Oracle Communications Billing and Revenue Management (BRM).

Topics in this document:

• About Charge Offers and Charges

• Configuring Charge Offer Usage and Ownership

• Applying Recurring Charges on a Specific DOM

• Configuring Charge Offers and Revenue Recognition

• Restricting the End Time of Granted Balances That Start on First Usage

• Configuring How Pricing Configurations for Date Ranges are Applied

• Charge Offers and General Ledger

• Configuring Full Day Proration

About Charge Offers and Charges

Charge offers determine the price of one or more events associated with a service. For example:

• For a mobile phone service:
  • 10 cents per call on peak time
  • 5 cents per call on off-peak time
  • $20 setup fee
• For a video download service:
  • $10 monthly fee
  • $1 fee per video download

A charge offer includes one or more charges. Figure 8-1 shows a charge offer in PDC. This charge offer includes two charges:

• ConvergentUsage charges 10 cents per minute for voice usage.
• Monthly Recurring Charge charges a 20-dollar monthly fee, and credits 100 minutes per month.

Figure 8-1 Charge Offer in PDC

Description of "Figure 8-1 Charge Offer in PDC"

Each charge can have one or more balance impacts. In Figure 8-1 the balance impact for usage is 10 cents per minute. The charge is determined primarily by the following columns in the balance impact in PDC:

• Impact: Can be a debit or a credit.
• Amount: The amount of the balance impact.
• Balance Element: The type of balance that is impacted. For a debit impact, this is usually a currency balance. For a credit impact, this is usually a noncurrency balance.
• Per Unit: What the charge is based on; for example, number of megabytes downloaded or number of minutes used.

The Per Unit value is typically the RUM that the charge is based on, or a measurement related to it. For example, if the RUM used to rate the event is seconds, the Per Unit value can be seconds, minutes, or hours.

For usage charges, you can also use the following options for the Per Unit value:

• Fixed Charge: Use this option to charge a flat fee for the event. Fixed charges are unaffected by the quantity of the event.
• Amount Used: This bases the charge on the quantity of the event is measured. For example, to charge for SMS messages, each event is one message, so Amount Used is always one message. If the Amount column is .10 and the Per Unit column is Amount Used, the charge is 10 cents for each SMS message.

Figure 8-2 shows a balance impact that charges for the amount used. This balance impact could be used for charging an SMS service, a video download, and so on.

Figure 8-2 Balance Impact With No RUM Specified

Description of "Figure 8-2 Balance Impact With No RUM Specified"

The options available in a balance impact depend on the charge offer type and the charge type. For example, the Per Unit value is not used for one-time charges such as purchase fees, or for recurring charges. In those cases, the event is always charged the same amount.

Figure 8-3 shows the balance impacts for a charge that charges a recurring $20 monthly fee, and credits 500 minutes every month.

Figure 8-3 Balance Impacts for Monthly Fee and Monthly Megabyte Credit

Description of "Figure 8-3 Balance Impacts for Monthly Fee and Monthly Megabyte Credit"

When you create a charge offer, you do the following:

1. Create the charge offer in PDC. In the charge offer, you define charge offer attributes such as the service that the charges apply to, how a customer can purchase and own the charge offer, tax settings, and so on. See "Configuring Charge Offer Usage and Ownership".

   If you configured product specification attributes for charge offers in XML templates, you can set their values. See "Configuring Product Specification Attributes for Pricing Components".

2. Create one or more charges. For each charge, you define the type of charge; for example, a monthly fee or a usage fee, how to measure the charge, and other properties. See "Configuring Charges in Charge Offers".

3. Define the pricing for each charge. The pricing specifies one or more balance impacts, and how to apply the balance impacts; for example, based on the quantity of the event. See "Configuring Pricing in Charge Offers".

Configuring Charge Offer Usage and Ownership

When you create a charge offer, you associate it with one of the following:

• A single service. For example, to charge for GSM usage, associate the charge offer with the GSM telco service.

  Multiple charge offers can be associated with the same service.

• No service. In this case, you associate the charge offer with Account. You might create a charge offer for late charges or for coupons.

  You cannot charge for usage events with a charge offer set to Account.

When you create a charge offer, you specify the charge offer type and the settings that control how the charge offer can be purchased and owned. The charge offer type determines how the charge offer can be used:

• Subscription: These charge offers are purchased and owned by subscribers, and the charges apply only to the charge offer owner. Most charge offers are subscription charge offers. They can charge for any event type.
• Item: These charge offers contain charges that are applied only once, for example, a purchase fee or cancel fee. Item charge offers cannot include recurring charges or usage changes.
• System: These charge offers apply to all subscribers who use a particular service. System charge offers are not owned by subscribers. They cannot contain usage charges.

In addition to defining the service and the charge offer type, you can define the following settings:

• When the charge offer can be purchased, which can be immediately, or in a specified date range.

  Note:

  To be added to a bundle, a charge offer must have a purchase period that is the same as or greater than the bundle's purchase period.

• The validity period for the charge offer. For example, the validity period specifies when the customer can use the service that the charge offer applies to. The validity period is not set in the charge offer itself. It is set when you configure the bundle that the charge offer belongs to. See "About the Validity Periods of Offers in Bundles".

• The provisioning tag to associate with the charge offer.

  You must create provisioning tags in BRM before you can assign them in charge offers. See "Creating Provisioning Tags" in BRM Provisioning Services.

• The policy specification to associate with the charge offer.

  You must configure policy specifications in PDC before you can assign them in charge offers. See "Configuring Policy Specifications".

• The tax supplier that will collect the taxes.

  You need to define tax suppliers in BRM before you can assign them in charge offers. See "Creating Tax Suppliers" in BRM Calculating Taxes.

• The charge offer priority. When multiple charge offers apply to the same service-event pair, BRM can consider the charge offers in the order of their priority. If a portion of the event remains unrated after BRM applies all the charges in the charge offer with the highest priority, each subsequent priority charge offer is analyzed until the entire event is rated.

• How the charge offer can be owned or purchased.

  • Owned: For example, if a charge offer provides an email service, you might want to limit the number of email login names that a customer can own.
  • Purchased: For example, if a charge offer includes an item such as a t-shirt, you might want to limit the number of t-shirts that can be purchased simultaneously.
  • Partially purchased: For example, if a charge offer gives customers 300 minutes of off-peak calls for $30, customers might be permitted to purchase half that amount for half the price.

• Whether this charge offer can be automatically shared with all members of a billing hierarchy.

• Whether to send notification messages to your customers when their subscription that contains this charge offer is about to expire or renew.

• The tax exemption selector to apply to the charge offer.

When you create a charge offer, to ensure a full day proration, set the rounding values for the following:

• The validity period: You can specify that the validity period starts at the purchase time or midnight of the day the product is purchased. Alternatively, you can set to use the systemwide setting in the CM pin.conf file.

• The charging scale: You can specify whether to charge for a full day or a partial day for the first day of the billing cycle. Alternatively, you can set to use the validity period setting.

You configure charge offer settings by using one of the following:

• The PDC UI. For more information, see "Creating a Charge Offer" in PDC Online Help.

• The ImportExportPricing utility. For information about how to configure charge offer settings using the utility and an XML file, see the sample charge offer XML file (PDC_home/apps/Samples/Examples/SampleChargeOfferWithPSCAttributes.xml), "Charge Offer Configuration Examples", and "ImportExportPricing".

Applying Recurring Charges on a Specific DOM

By default, all recurring charges in a charge offer are aligned with your customer's billing day of month (DOM). For example, if customers have a billing DOM of the 1st and purchase a charge offer on January 10, the recurring charge is prorated and applied on January 10 for the interval January 10 to February 1. For subsequent cycles, the recurring charge is applied on the billing date (for the interval February 1 to March 1, March 1 to April 1, and so on).

You can configure PDC to instead apply recurring charges on a specific DOM. For example, apply recurring charges on the 5th of each month, regardless of the billing or purchase date. This is useful for charge offers with validity that is defined in hours, minutes, and seconds rather than days, weeks, and months.

You can configure PDC to apply recurring charges on a specific DOM by using the following:

• The PDC UI. To do so, use the Cycle Alignment Day of Month field in the charge offer settings. See "Specifying Charge Offer Settings" in PDC Online Help.

• The ImportExportPricing utility. To do so, in your input XML file, set the purchaseCycleDOM element under the chargeOffering element. See "Aligning Recurring Charges and Product Validity to a Specific Day of the Month".

Configuring Charge Offers and Revenue Recognition

When you create a charge offer, you specify how your company will recognize the revenue that is associated with it. Revenue recognition is an accounting principle that specifies when your company can recognize the money it receives from the products and services that it sell to customers.

If your company uses deliverable-based revenue recognition and the charge offer contains a recurring or one-time charge, add one or more deliverables to the charge offer. See "About Event-Based Revenue Recognition" in BRM Collecting General Ledger Data for more information.

If your company uses event-based revenue recognition, leave this section blank. See "About Deliverable-Based Revenue Recognition" in BRM Collecting General Ledger Data for more information.

Restricting the End Time of Granted Balances That Start on First Usage

You can configure BRM to automatically restrict the validity period of granted noncurrency balances to end no later than the end time of the charge offer or discount offer that grants the balance.

When you configure balance validity to start on first usage and end on a date relative to the start date (when first usage occurs), you cannot know the actual end date when setting up the offer. Restricting the balance end time to the offer's end time ensures that the balance cannot continue to be consumed after the offer expires.

Note:

When an offer is canceled, the validity period end time of balances granted by that charge offer or discount offer is set to the time of the cancellation.

When you restrict balance validity end time, BRM sets the end time to the offer's end time at the time of the grant. When the customer consumes the granted balance for the first time, the relative end time is calculated:

• If the calculated end time is later than the granting offer's end time, the balance validity period uses the offer's end time.

• If the calculated end time is earlier than the granting offer's end time, the balance validity period uses the calculated end time.

To enable this feature, run the pin_bus_params utility to change the RestrictResourceValidityToOffer business parameter. See "pin_bus_params" in BRM Developer's Guide for more information about this utility.

To restrict balance validity end times to charge offer or discount offer end times:

1. Go to BRM_home/sys/data/config.

2. Create an XML file from the /config/business_params object:

   pin_bus_params -r BusParamsMultiBal bus_params_multi_bal.xml 
   

3. In the file, change FALSE to TRUE:

   <RestrictResourceValidityToOffer>FALSE</RestrictResourceValidityToOffer>
   

4. Save the file as bus_params_multi_bal.xml.

5. Load the XML file into the BRM database:

   pin_bus_params bus_params_multi_bal.xml
   

6. Stop and restart the CM.

7. (Multischema systems only) Run the pin_multidb script with the -R CONFIG parameter. For more information, see "pin_multidb" in BRM System Administrator's Guide.

Configuring How Pricing Configurations for Date Ranges are Applied

When adding a charge to a charge offer, you can specify that different pricing configurations are effective during different date ranges by adding date ranges to the balance impacts. On the charge offer, you can configure how these different pricing configurations are chosen.

You can decide whether customers who subscribe during one date range will keep the same pricing configuration after that range ends, or move to the new pricing configuration. You can also determine whether the pricing configuration is chosen based on the service instantiation date or the purchase date.

This is useful when you add new pricing configurations with new date ranges after customers have already subscribed to a charge offer.

You specify what happens after one date range ends in the charge offer settings. Existing subscriptions can:

• Move to the pricing configuration for the next date range, with the balance impacts configured for the next date range. This is the default behavior.
• Continue to use the old pricing configuration, with the balance impacts configured for the old date range. With this option, you are effectively maintaining separate versions of the same charge offer for different customers.

  You can configure BRM to determine the pricing configuration for new subscriptions based on:

  • The purchase date: Any subscriptions purchased within the new date range will use the new pricing configuration.
  • The service instantiation date: Any new services instantiated during the new date range will use the new pricing configuration. This option is useful if your services often have a long delay between purchase and instantiation date. It allows customers who purchase at the old price to take advantage of the new price if it comes into effect before their new service is available.

See "Configuring Effective Dates for Pricing" for more information about configuring date ranges.

The following examples describe how these configurations determine the pricing configuration that applies to existing and new subscriptions. In the examples, you have an existing charge offer with a balance impact that credits 1GB of free data every week. You add a new balance impact crediting 1.5GB, set the end date of the old balance impact to June 10th, and set the start date for the new balance impact to June 11th. Depending on your charge offer settings, the following happens:

• If you configured the charge offer to move to the new pricing, all subscriptions get 1GB until June 10th, and 1.5GB thereafter.
• If you configured the charge offer to use the old pricing for existing subscriptions, but determine pricing for new subscriptions based on the purchase date, subscriptions purchased before June 10th continue to get 1GB, even for events occurring after June 10th. Subscriptions purchased after June 10th get 1.5GB.
• If you configured the charge offer to use the old pricing for existing subscriptions, but determine pricing for new subscriptions based on the service instantiation date, subscriptions instantiated before June 10th continue to get 1GB, even for events occurring after June 10th. Subscriptions instantiated after June 10th get 1.5GB, even if they were purchased before.

You can also make these configurations in XML when importing pricing components using the ImportExportPricing utility. See "Using Date Ranges for Versioning".

Charge Offers and General Ledger

You assign a general ledger ID (G/L ID) to balance impacts. This enables you to track revenue for each type of charge; for example, you can assign different G/L IDs for monthly fees and usage charges.

Configuring Full Day Proration

When you create a charge offer, you can set the rounding values for the following:

• The validity period: You can specify that the validity period starts at the purchase time or midnight of the day the product is purchased. Alternatively, you can set to use the systemwide setting in the CM pin.conf file.

• The charging scale: You can specify whether to charge for a full day or a partial day for the first day of the billing cycle. Alternatively, you can set to use the validity period setting.

You can configure full day proration using the following:

• The PDC UI. See "Offer Settings Subsection" in PDC Online Help.

• The ImportExportPricing utility. To do so, in your input XML file, set the <validityRounding> and <scaleRounding> elements under the <ChargeOffering> element. See "Setting Full Day Proration".