Category: (4) eTOM Process Type
Process Identifier: 1.6.12.1.2
Original Process Identifier:
Maturity Level: 3
The Revenue Split- or Sharing process guides how Revenue are attributed to different product lines (where defined as separate legal entities), sales lines and partners. The Revenue Split or Sharing Process uses existing artefacts like usage, invoices, Business Party Segments, etc. to guide how the expected revenues will be split and shown as a reduction of credit or increase in debit in the Party Invoice. Based on the conditions, it is possible that it has no simple correlation to the sum of retail revenues; It is in essence a specialization of Rating and at the same time and abstraction of Pricing especially for Wholesale & Business Party Billing. This process sometimes includes manual steps. Revenue Splits are often used in recognizing Revenue in Sales Lines / Sales Partner towards calculating commissions: Funds or costs to be shared based on various business models with many different service providers and partners.
The Revenue Split- or Sharing process guides how Revenue are attributed to different product lines (where defined as separate legal entities), sales lines and partners. There are a variety of Revenue Share Models, that determines how operating profits or losses may be split amongst partners. Revenue sharing takes many different forms, although each iteration involves sharing operating profits or losses among associated financial actors. Based on the type of Revenue Split or Share, different determinants are used to calculate the final invoice. Well-known examples include “Cost plus”, “Retail minus” or “Commercial” . There are also sub variants based on the Specific Business Party, like the popular “Sub brand”-model Funds or costs to be shared based on various business models with many different service providers and partners. This includes the offering (linkage to ) retail products in the wholesale model (i.e. for retail minus contracts). Examples include : Business Party Earns a Percentage of Revenue : This is the most traditional and, therefore the default revenue sharing model. The Business Party receives a specific percentage of all revenue it generates. Business Party Earns a Percentage of Revenue With a Minimum UNIT PRICE/COST ELEMENT Guarantee : With this revenue model, the Business Party receives either a specific percentage of all revenue it generates (as with the default model), or a minimum guaranteed UNIT PRICE/COST ELEMENT—whichever is greater. If the network cannot fill a given request, then it is filled with a Business Party-provided fallback Service (through a targeted line item that the Service network sets up), and it is not counted as a revenue-bearing event. Since this revenue model deals with guarantees, it is possible for the network to retain negative revenue. Business Party Earns a Fixed Revenue: With this revenue model, the Business Party receives a fixed Revenue, and the network retains any revenue above the fixed price. If the network cannot fill a given request, then it is filled with a Business Party-provided fallback Service (through a targeted line item that the Service network sets up), and it is not counted as a revenue-bearing event. Since this revenue model deals with guarantees, it is possible for a network to retain negative revenue. Business Party Earns a Fixed UNIT PRICE/COST ELEMENT With 100% Fill : With this revenue model, the Business Party receives a fixed UNIT PRICE/COST ELEMENT, and the network retains any revenue above the fixed price. The network fills all Service requests for the Business Party, and all requests are counted as revenue-bearing events, even those filled by House line items, which are used to guarantee 100 percent fill. Since this revenue model deals with guarantees, it is possible for the network to retain negative revenue. Revenue Splits are often used in recognizing Revenue in Sales Lines / Sales Partner towards calculating commissions: ie For a specific transaction line a predetermine revenue split might exist between three partners 50:30:20. With an additional partner joining it might receive a Transfer Percentage of 5% which will receive a prorated share deducted of each of the 3 partners. Party Revenue Sharing develops party revenue sharing models, prepares party revenue sharing agreements, determines party revenue shares, and reconciles party revenue shares. Party Revenue Sharing Model Development develops, maintains, and removes party revenue sharing models that define how revenue is shared by and enterprise with one or more other parties. Revenue sharing models are a key component revenue sharing agreements. Party Revenue Sharing Agreement Management develops an agreement that specifies how revenue will be shared between an enterprise and one or more other parties whose product offerings are made available in some way by an enterprise. Party Revenue Share Determination uses existing artefacts such as usage, invoices, product prices, and applied billing rates to determine how revenues will be shared. Party Revenue Sharing Reconciliation ensures that two sets of party revenue sharing records are aligned and agreed upon.
This was created from the Frameworx 16.0 Model