Contracts are made between the service provider and the customer for a specific period. These contracts contain terms and conditions, definition, and a period for which these terms and conditions are applicable. During the contract validity, the price agreed between the two parties does not change though there are changes in the pricing of the original product. For example, if the service provider gets in contract with a customer for six months offering 1 Mbps at the rate of Rs.3000 for six months, and after two months if there is an increase in the price of the service offered, the pricing does not change for the customers who are into the contract. The pricing defined for the contract is applicable only for the duration of the contract. Generally, in business scenarios, service provider offers a service for a lesser amount if the customer agrees to be in contract for a longer period. Once the contract expires, customer may renew the contract or terminate the services. Magnaquest's Billing & CRM solution facilitates the service provider to define contracts and offer the same to the customer. This feature is addressed as Contract Obligation in the Billing & CRM solution.
In the Billing & CRM solution, plans which are under obligation term are defined as perpetual plans through Price Plan screen. The applicable contract terms are mapped to the defined plan and pricing is defined for each contract term through Pricing screen.
When a customer is booked with a plan under contract obligation, changes in the pricing are not allowed during the contract term except for upgrade. Changes in the contract term that does not impact billing or price of the contract are allowed.
Following are the various scenarios for Contract Obligation feature:
New Order
When a customer books a perpetual plan, contract term is captured. Though the contract is perpetual, it is under obligation term. Prices and discounts are applied as per the plan definition.
Upgrade
Only upgrades are allowed during the contract obligation period. During upgrade, new products can be added and these products can be given at a reduced price till the contract obligation term. Discounts can also be given till the contract end date. Change in outlets and additional rooms is also considered as an upgrade. Change in contract term and pay term is also allowed but the change of the term should be higher.
Price Changes
If the list price is changed, service provider should decide if the new price should be applied for the existing customers who are under the contract term. Price changes are applied only through "Bulk Contract Change".
Provision is given to provide Ad hoc price and Ad hoc discounts. Service provider should decide to allow or reject the ad hoc price and ad hoc discounts.
Renewal
Follow-ups should be done for customers whose contract term is near to expiry. If customer wants to extend the contract, the Billing & CRM solution user can extend the customer's contract with the same term or with a different term. This can be done through Renewal screen.
If customer is not interested to renew the contract, the list price and new plan definition (newly added services) is applied automatically from the day the term is completed. User must run the Modify Contract with Perpetual Term batch job to change the contract term to perpetual. Change order is done with perpetual term. The job should be executed everyday.
If service provider does not want to extend the contract, user must set the Disconnect on end of the contract obligation profile option to Yes. Auto expiry job picks these contracts and disconnects them.
Disconnection
If a customer requests to terminate service within the contract term, service provider can penalise the customer by posting a one time charge. This one time charge should be charged through One Time Sale action during the disconnection process.
Reconnection
Provision is given to reconnect the disconnected contracts. Service provider should decide whether the disconnected contracts can be reconnected within the contract obligation term.