Listen as SAP’s Roshni Frisch discusses how SAP BRIM (Billing and Revenue Innovation Management) and RAR (Revenue Accounting and Reporting) work together to provide a seamless order-to-cash and RevRec compliance process.

Also, below is a transcript of the podcast episode:

Jim Hunt: Hello, this is Jim Hunt for Bramasol’s Insights to Action podcast series. Today, we’re going to talk about BRIM and revenue management, and we’re really lucky to have Roshni Frisch with us who is an expert on revenue management in SAP’s revenue, accounting and reporting center of excellence. Welcome Roshni, good to have you here.

Roshni Frisch: Hey Jim, thank you so much for having me today.

Jim Hunt: Why don’t we start off with a brief overview of how things are changing with new customer facing business models and the overall dynamic changes that has on revenue management.

Roshni Frisch: Yeah. That’s been a very interesting topic, especially recently in the last couple of years since COVID has taken place. We have seen a huge shift towards subscriptions-based business models across the board. This was happening, I would say to a lesser extent before or COVID, but COVID really seemed to kind of kickstart the whole thing and industries that typically were not really subscription based previously, have all started moving towards this new model and this new way of selling to their customers. So we’ve seen a huge jump in demand for software that supports these types of subscriptions-based models. So BRIM has seen a huge increase in sales and implementations in the last couple of years. And we see that trend actually just growing and growing based on different different markets and across the globe. North America was the first one to jump in on this, and we’ve seen recently that this trend has been following in EMEA and AsiaPac. It’s been sort of more of a global thing now, even more so than it was previously.

Jim Hunt: Yeah. It almost feels like there was a trend moving ahead and the pandemic made many companies step on the gas for those new engagement models.

Roshni Frisch: Exactly, exactly. I think everyone was thinking about it. And then all of a sudden, now everyone is executing a project on it instead.

Jim Hunt: Maybe you could describe what BRIM is for listeners who aren’t familiar with it and how it engages this model and specifically how it relates to revenue management.

Roshni Frisch: Yep. So BRIM is essentially SAP’s software of choice for subscriptions models. It’s an order-to-cash suite that’s got everything from your AR/AP functions to several different modules that you can also implement within BRIM. There’s FICA, and there’s a ton of different pieces of BRIM that customers are using based on their specific needs. If you’re talking about subscriptions order management, then you would be able the SOM portion of BRIM. In addition, you’d also be evaluating FICA, conversion invoicing and mediation. So there’s a lot of different components to the product and depending on what a customer’s specific need is, they kind of pick and choose from that suite within BRIM.

Jim Hunt: I I’ve heard BRIM described as, not so much an application as a portfolio of related applications. Is that fair?

Roshni Frisch: Yep. Yep. I think that’s a, that’s a good way to put it actually, because there’s so many different things you can do, and there’s so many different ways that different customers are implementing it as well. So it’s kind of unique to what your specific situation is and you can pick and choose out of the portfolio, what you feel would be best applicable to your specific situation.

Jim Hunt: Right. And the focus of today’s podcast, revenue management is, well you can explain this better than I would, but BRIM while it helps you with all that customer facing stuff, it doesn’t do the compliance for you and you still have to comply.

Roshni Frisch: Exactly, exactly. So, BRIM can do some simpler forms of revenue recognition within the module itself, out of the box. But if you’re looking for more complex revenue recognition methods, if you have contract combinations, if you have any type of heavy allocation going on in your subscriptions business, if you have additional performance obligations that need to be added to your existing contracts, that may not be visible on the customer facing side or invoice, but do need to be accounted for in the backend. This is where RAR has to jump in and essentially take over the accounting related processes. So BRIM is great for all of your order to cash, but at the end of the day, if you are impacted at all by IFRS 15 or ASC 606, you will also need RAR to supplement what you’re doing on the BRIM side, so that your revenue and your accounting can be correct at the end of the day.

Jim Hunt: Thank you. Could you talk a little bit to RAR versus automated revenue management, ARM? I know that they’re related, kind of an outgrowth of each other, but it might help our listeners understand those two terms.

Roshni Frisch: So Automated Revenue Management is the concept that SAP is putting forward, which kind of encompasses all of our different revenue management pieces of software. RAR, Revenue Accounting and Reporting, is a specific software and a specific module that is within the Automated Revenue Management suite at SAP. So it’s, it’s kind of the product as compared to the overall strategy.

Jim Hunt: Ah, that’s very helpful. And then expanding the lens a little bit further. Let’s talk some about S/4HANA because S/4HANA’s the future and all of the things we’ve just been talking about, BRIM, RAR, and Automated Revenue Management, they all are enabled to work in the S/4HANA ecosystem. So maybe you could talk to some of the advantages that brings about.

Roshni Frisch: Exactly. So the advantages of doing all of this on the same platform is that you get that, you know, single-source of-truth, and you can follow and trace a transaction from start to end point. This happens all seamlessly in the back-end of your system. It’s all integrated, it’s all traceable and it’s all out of the box. So this is where when you piece together the different pieces of BRIM and maybe you even have some SD in there, with your finance and your RAR, all of this can come together in one full end-to-end view in your table or your general ledger, where you can trace everything from start to finish without having to do a bunch of cumbersome reconciliation processes. So this enables you to trace all your transactions and for you to be able to do this simply with using SAP products, you don’t have to build in customizations. You don’t have to build in, you know, a bunch of complex reporting. All of the data integration is already there.

Jim Hunt: So that’s the future as it comes together down the road, maybe we should also talk just a moment about the agnostic nature of things like RAR and to some extent BRIM, becuase a lot of people moving into these new Digital Solutions, Economy business models already have some pieces, some legacy pieces, that they don’t want to give up. So maybe talk a little bit about the ability to integrate agnostically.

Roshni Frisch: Yep. That’s that’s a good point. A lot of our customers do have a separate front end, n addition to having BRIM on the order-to-cash side. That’s a common thing that we’ve seen. So the integration capability is there and we also have customers that, you know, some of their products are on BRIM while some of their product lines are on SD. Some of them may even be in different third party billing systems or something like that. So on the RAR side, we offer the flexibility to integrate into all of those different components. So you can send in your BRIM orders, you can send in your SD orders, you can even send in orders from a non SAP system directly into RAR and manage all of your revenue that way. So it’s also possible, while it’s nice to have the integrated end to end landscape because for simplicity sake, it makes things a lot easier if you are not there or if you’re on a journey to kind of get there, there’s also different pieces you can plug and play into both BRIM and RAR that can enable you to leverage a lot of this functionality in the interim or in the long term, even if that’s your long term end-state architecture plan.

Jim Hunt: And that’s a perfect segue into my last question is: what should people listening to this podcast be doing now to make sure that their revenue compliance gets integrated and that it’s present-ready and future-proof?

Roshni Frisch: Yeah, so I feel like what’s happening in the market right in now is we’re seeing a lot of BRIM implementations and a lot of BRIM projects kicking off. And a lot of times the order-to-cash is kind of leading the way. And I think what’s happening is you’re hitting a point when you’re in, in or in the middle of these projects where you’re going, “oh, how am I gonna do my revenue recognition for this”? I may not have thought this all the way through. So what we suggest is to think about your finance and your order-to-cash processes and, by extension, your BRIM and your RAR together. If you are able to take a look at both of those at the same time, then what we found is customers that go in with that type of view on their project plans are able to build simpler solutions.

Roshni Frisch: They’re able to get their benefits quicker rather than doing a phased GoLive. They’re also able to minimize their customizations because they’re looking at it from that end-to-end perspective. So if you’re considering BRIM right now, I would encourage you to also be looking at RAR at the same time. I know that’s not always possible for every customer, depending on their specific situations, but it should at least be in the back of everyone’s minds that you need to be looking at this together to ensure that you have the complete end-to-end solution, and that you don’t GoLive with just one piece. Then eventually you have to add on to it via another project in order to get you off of reporting through Excel or something like that. So I would encourage our customers to think about this in tandem rather than as two separate projects or two separate implementation items. Right.

Jim Hunt: And then I guess it goes without saying that, you know, by best practice always in these major implementation projects is to bring together all the key stakeholder, because you don’t want to move too fast with your customer facing Digital Solutions Economy, business model, and not involve the compliance people ro the accounting people who have to report revenue. So you get to down the road a ways and you realize you didn’t allow for that. And you’re stuck with a lot of manual activities, spreadsheets and so on.

Roshni Frisch: Exactly, exactly. We’ve seen that happen where they forgot to call the auditors or the accountants. And, then that can have some ramifications and delays to your overall project timeline as well. So having the right stakeholders engaged from the beginning, having that CFO or CTO buy-in from the start with regards to this journey is very, very crucial. I would say.

Jim Hunt: That’s excellent. This has been very helpful, any final words of wisdom that you want to add?

Roshni Frisch: I think my final word of wisdom would just be to take a look at BRIM and RAR, see how you may be able to benefit for your company in terms of implementing these new processes in these new business models. And take a look at the journey holistically over five to10 years. What are you looking to accomplish with your transformation?

Jim Hunt: That’s an excellent finishing point Roshni, thank you very much for your inputs today and have a good day.

Roshni Frisch: Thanks so much.

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