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Quote Management pricing - TMF648

  • 1.  Quote Management pricing - TMF648

    TM Forum Member
    Posted May 27, 2024 18:00

    Hi.

    How to work with financial modeling in context of Quote Management?

    There are elements quoteItemPrice and quoteItemPriceAlternation that hold pricing data (e.g. price amount). From my point of view:

    1. Default price (fee) for each product is stored in Product Catalog
    2. Price of the quote item is "quote specific" and valid for current quote (could be different from the default price)
    3. Element quoteItemPrice stores the price, element quoteItemPriceAlternation stores data that affect quoteItemPrice.

    Does the Quote Management include costs (e.g. network costs, CAPEX, ...) or is there any "Cost Management" ?  Does the Quote Management include financial calculations and results (revenue, payback, gross profit)?



    ------------------------------
    Jan Brnka
    TO BE VERIFIED
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  • 2.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted May 28, 2024 03:10

    Hi Jan

    The whole area of Cost (and hence P&L) is not covered in the Open API at this time (I'm not sure what the situation is in the SID - information framework).

    There was some work being done by a CSP on a separate Cost API, but I don't know what progress has been made at this time.



    ------------------------------
    Jonathan Goldberg
    Amdocs Management Limited
    Any opinions and statements made by me on this forum are purely personal, and do not necessarily reflect the position of the TM Forum or my employer.
    ------------------------------



  • 3.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted May 31, 2024 06:21

    Hi Jonathan. Thanks a lot for the information.

    Based on that, I will have to think about how to store cost prices in quote. My first idea was to customize <quoteItem>  and extend by "cost price for this quote item" or "reference to a costing structure in some cost management DPS ".

    What do you think about this solution? What is your experience with customizations in general?



    ------------------------------
    Jan Brnka
    T-Mobile Czech & Slovak Telekom, a.s.
    ------------------------------



  • 4.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted Sep 06, 2024 06:07

    Hi, Jan. How did you solve finally the "cost issue"?



    ------------------------------
    Raquel Muñoz
    alvatross
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  • 5.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted Sep 09, 2024 10:02

    what is the cost issue?

    whether the POP  (product offering price) comes from the product catalogue (static pricing) or is the computation of a logic (dynamic pricing) is irrelevant for CQO  (cart/quote/order) entities.

    customers don't need to be aware of the CSP costs. CQO entities should only expose the price customer will pay, eventually broken down into pre/post taxes and discounts. 

    For enterprise customers, some product offerings don't have a POP or the POP is only a "starting at" guide.

    For some product offers, Cost-Based Pricing can be used, for instances:

    The POP amount is computed by a pricing/rule engine is calculated as a "cost price + a margin markup". That cost price could come from a static cost list or is dynamically calculated based on facts such as (especially in utilities such as electricity) demands, weather conditions, commodity markets etc.

    but CQO should not care about the cost price, only customer end prices



    ------------------------------
    Kind regards,

    Matthieu Hattab
    Lyse Platform
    ------------------------------



  • 6.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted Sep 27, 2024 10:52
    Edited by Jan Brnka Sep 27, 2024 10:54
    Hi Matthieu. 
    I like the Cost-Based Pricing approach. I'm facing problem of implementing a "flexible parametric internet": the price is not calculated on product offering level but in the quoting phase.
    To explain my thoughts I'll describe an example: a product called "Fancy Flexible Internet". 
     
    In the Product Catalog I have following ProductOffering
    - Fancy Flexible Internet
    - Primary Connection
    - Backup Connection 
    - Traffic Logger
     
    In the Service Catalog I have following ServiceSpecifications
    - Internet Connection
    - Traffic Logging
     
    In the Resource Catalog I have following ResourceSpecifications
    - Connection Device
    - Access Point
    - Cable
    - Antenna
    - Storage
    - License
     
    (For more details see the attached diagrams)
     
    Now when I want to offer a quote item price, I need to enter parameters of ServiceSpecifications. Based on that I can find appropriate ResourceSpecifications from the Resource Catalog and the costs. So the "Cost Catalog" provides costs based on ServiceSpecification parameters (intangible goods) and costs based on specific ResourceSpecifications (tangible material goods). After that I can apply some calculation algorithm.
     
    What do you think?



    ------------------------------
    Jan Brnka
    T-Mobile Czech & Slovak Telekom, a.s.
    ------------------------------



  • 7.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted Sep 30, 2024 08:24
    Hi,
     
    In your example, you don't necessarily need to know the costs of underlying service or resource.
     
    Use ProductSpec, which represent servicespec or resourcespec to represent anything that can determine the customer  price of each product offer in your bundle.
    having multiple productspec or using characteristic and their value can determine the product offering price.
    As the end user configure the bundle (select product offers, characteristic and their value), prices are computed for the product configuration.
     
    But if you prefer to look at cost from resource catalogue, then your pricing engine could also determine the price based on a policy (see TMF620 on policy and GB922) which will get cost prices from related resource and service.


    ------------------------------
    Kind regards,

    Matthieu Hattab
    Lyse Platform
    ------------------------------



  • 8.  RE: Quote Management pricing - TMF648

    TM Forum Member
    Posted Oct 04, 2024 03:43

    Hi.

    I went through IG1228 and linked TMFS00x use cases to understand the ProductSpec concept. There is one thing in the TMFS003_Order_Capture_Fiber_Contract that I'm not sure if I understand correctly. In chapter 3.1. Global Catalog view (page 13) there is detail of Fiber Contract Silver PO. I suppose all PO and POS are in the Product Catalog. In chapter 3.2. Product Order view (page 14) is initialized product order (I assume  belongs into Product Order Catalog) with create order item actions.

    What these actions actually do? Creates order item of course. And in addition creates products and specifications with specific characteristics in the Product Inventory? 



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    Jan Brnka
    T-Mobile Czech & Slovak Telekom, a.s.
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  • 9.  RE: Quote Management pricing - TMF648