Dynamic Cost Allocation for Service Orders
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Solution Overview
Problem
Complex service orders often involve multiple service providers and receivers, making it challenging to accurately allocate costs and revenues, especially in large enterprises, where the allocations may not be known at the outset and can change during execution, leading to incorrect invoicing and cost accounting issues.
Innovation Solution
A method and computing system that allow for the creation and revision of planned and actual cost and revenue allocation rules for service orders, which are electronically forwarded to a cost accounting system, enabling accurate tracking and invoicing among multiple service providers and receivers, and facilitating correct cost allocation and billing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If service orders involve multiple service providers and receivers, then the service coverage and complexity handling capability is improved, but the difficulty of cost and revenue allocation increases
Solution Approach 1:
The patent segments the service order management into distinct components: service order creation, execution tracking, cost accounting, and billing. Each component handles specific aspects independently, allowing complex multi-provider orders to be processed through modular steps rather than as a monolithic system.
Solution Approach 2:
The patent introduces an intermediary allocation system that acts as a mediator between service providers and receivers. This intermediary component automatically calculates and distributes costs and revenues according to predefined rules, eliminating the need for manual negotiation and simplifying the interaction between multiple parties.
2Adaptability or versatility
If allocation rules are revised during service order execution, then the adaptability to changing circumstances is improved, but the risk of allocation errors increases
Solution Approach 1:
The patent implements feedback mechanisms where the system continuously monitors service order execution and automatically updates cost and revenue allocations based on actual performance data. This feedback loop ensures that revisions are data-driven rather than arbitrary, maintaining accuracy while adapting to changing conditions.
Solution Approach 2:
The patent transforms static allocation rules into dynamic rules that automatically adjust during service order execution. The system allows allocation parameters to change based on real-time conditions while maintaining mathematical consistency and preventing errors through automated calculations rather than manual updates.
3Adaptability or versatility
If manual allocation determination is used, then the flexibility in handling complex scenarios is improved, but the time consumption and productivity decrease
Solution Approach 1:
The patent enables the system to automatically determine and execute cost and revenue allocations without requiring manual intervention for each calculation. The system self-services by applying predefined rules and algorithms to compute allocations, significantly reducing processing time while maintaining the flexibility to handle complex multi-provider scenarios.
4Adaptability or versatility
If multiple computing components are integrated, then the functional capability is improved, but the system complexity and difficulty of coordination increase
Solution Approach 1:
The patent creates a universal service order management framework that can handle multiple functions (creation, tracking, accounting, billing) within a single integrated system. This universal approach allows different computing components to work together through standardized interfaces, reducing coordination complexity compared to separate specialized systems.
Data Source
AI summary
A method and system handles cost and revenue allocation for service orders. For a service order, there is allowed to be created planned rules for allocation of costs to one or more service providers and for allocation of expected revenues to be received from one or more service receivers, which are forwarded in electronic form, if created, to a cost accounting system. After receipt of a confirmation that the service order has been executed wherein the confirmation includes information about costs actually incurred in executing the service order, there is allowed the creation of revised or newly created rules for allocation of the incurred costs to the one or more service providers and for the allocation of the revenues to be received from the one or more service receivers, which are forwarded in electronic form, if created or revised, to the cost accounting system.