HCLTech and Oracle simplify revenue complexity at CSG

Overview

CSG is a US-based multinational enterprise software and network solution provider with more than 100 million users globally. With more than 10,000 employees in over 20 countries across North America, Europe, the Middle East and APAC, CSG is a trusted technology provider for leading global brands in telecommunications, retail, financial services and healthcare.

To keep pace with their growing business, both organic and inorganic, CSG's revenue business team was looking for a robust revenue recognition solution that would also be compliant with IFRS 15 and ASC 606. Having Oracle Fusion Cloud as their core Enterprise Application system, CSG preferred implementing Oracle Revenue Management Cloud Service (RMCS) by replacing their legacy system for revenue recognition and thereby optimizing enterprise application TCO.

The Challenge

The complexity of CSG’s revenue recognition process lay in their subscription-based software bundled products and services. The major challenge was to have a solution to manage custom bundle split functionality for their different subscription-based products and services. Other challenges included:

Streamlining the revenue recognition process, which involves splitting the Performance Obligations (POB) based on POB code and deriving the correct allocation and pricing information
Building custom integration and data transformation with derivation logic for Standalone Selling Price ( SSP) and revenue allocation amount in the preprocessor stage
Need to implement the solution under a tight deadline
Revenue recognition to be based on the hardware/ software fulfilment (based on contract terms) and these events to be sent to Oracle RMCS as they occur

The Objective

The primary objective of the project was to modernize the revenue recognition solution landscape by implementing Oracle Revenue Management Cloud Services, which included:

Introducing best practices, data governance, future ready technology, flexible planning and real time monitoring insights
Ensuring that business process concerns are reviewed, optimized, resolved and establish a future-ready process for revenue management
Technical conversion of revenue contracts from the legacy system
Building a clear roadmap for revenue management on the cloud transformation journey and enabling seamless integrations with existing Oracle Cloud application with minimum disruption
Customization of the Oracle RMCS solution to handle customer-specific needs of managing bundle splits of performance obligations

The Solution

Oracle’s RMCS solution has been customized to achieve CSG’s unique business need, which required integration from Fusion Order Management Cloud, leveraging Oracle PaaS to derive the following information:

SSP derivation based on stratification factors, which in turn are based on attributes defined in the Order Management System
Perform allocation on kit order lines
Split the allocated amount based on the POB code
Split lines to recognize revenue in ‘Point in Time’ or ‘Over Time‘
Handling order lines with residual positioning and allocation exemption

The Impact

HCLTech’s implementation of Oracle RMCS helped CSG shift from a legacy revenue recognition system to a flexible and agile Cloud-based Oracle solution, with reduced operational cost. HCLTech also facilitated the conversion/migration of ongoing revenue contracts from legacy systems. The key benefits for CSG include:

Robust PaaS solution to handle bundle splits with accurate pricing Information, which includes transformation to derive correct pricing and allocation
Custom billing integration with RMCS, enabling seamless data flow between the billing and revenue management application
Cutover data included active and historical (three years) contract information to have a single source of truth for better reporting and analysis
RMCS implementation led to accelerated period closure (month/quarter) resulting in a reduction of the overall book closure timeline by 30% with minimal reconciliation issues