Explaining the Process Steps and Business Roles for Service Contract Management (3MO)

Scope item Service Contract Management (3MO) covers the creation of service contracts in SAP S/4HANA Cloud. The service contracts are created using an SAP Fiori app. The price agreements that are specific to a customer can be defined and handled using these service contracts. The service contracts can then be used to determine the pricing for a service order when it is created with reference to this service contract.

The link between a service order and a contract is also available for reporting purposes. Price adaptation for service contract items is supported either using a separate item category for the service contract item (for price adaptation) or using manual changes at the billing request line level and settlement rules in a billing plan.

Besides these options, it is also possible to automatically renew an expiring service contract by a predefined period at a predefined date, if the service contract has not been canceled. A credit memo can also be created based on the invoice of a service contract.

Note

In a service contract, a so-called Contract Auto Renewal Indicator can be set in the product master data, to control the auto renewal enablement for a product. The following three types of indicators are supported for a service product:

• <Blank> (No Selection, can be changed): no auto renewal by default. This can be changed in a service contract.
• 1 (Set to Yes, can be changed): auto renewal by default. This can be changed in a service contract.
• 2 (Not relevant for auto renewal): no auto renewal allowed for the product, the user is not able to change the auto renewal parameters in a service contract.

If the Contract Auto Renewal Indicator is set to option 1, during service contract item creation, the auto renewal extension period maintained in the product master data and the default value for renewal period in Customizing are determined automatically and auto renewal is enabled by default.

Note

Select each process step below to learn more about it:

Note

Negative quantities and negative values for items in service contracts are not allowed.

Assume the following scenario:

A customer wants to reduce the quantity of an item in a service contract from 10 to 9. The net value for a quantity of 10 is 10.000,00 EUR, and the adjusted net value should become 9.000 EUR.

Inserting a new item with a quantity of -1 in order to reduce the total quantity from 10 to 9, so the net value will be adjusted to 9.000,00 EUR, is not allowed.

For the scenario just mentioned, the suggestion is to use a negative price with a positive quantity. An extra item needs to be added to the service contract with a quantity of 1 and a price of -1.000 EUR.

See also the SAP knowledge base article with number 3109795 for this example.

Note

SEPA mandates are also supported in service contracts. A SEPA Direct Debit mandate is a document that allows the owner of a bank account to give their creditor a direct debit notice. In other words, it allows a creditor to withdraw the amount of money that is due directly from the debtor's bank account.

A customer service manager can enter payment terms, a SEPA mandate and a payment method in a service contract, so that the billing document(s) that are created for the service contract item(s) can be paid through a SEPA mandate.

Note

To prevent certain billing request lines from being invoiced (for whatever reason), a billing block needs to be set for those billing request lines.

Note

The billing status of a service contract item has no relationship with a possible credit memo for this contract item. A credit memo is a separate billing document in the system. The billing status of a service contract item is based on the net value and the cumulative invoiced value. If the cumulative invoiced value is equal to or larger than the service contract item net value, then the service contract item is fully billed.

Note

A service contract item's net value is the cumulative value of all billing request lines. Invoiced billing request lines cannot be deleted or changed. Even if later on item prices are changed in the service contract, this won't affect the already created invoices. Also: it is not possible to change the price of a completely billed service contract.

A Credit Status field is also available on header level of a service contract (in the Processing Data group). The value of this credit status is calculated based on all item level credit check statuses.

On service contract header level, a button named Simulate Credit Check is also available to allow the end-user to process a credit check simulation during service contract maintenance.

Two options are allowed to simulate a credit check:

• Simulate all items
• Simulate released items

Another feature is that when an equipment is added into the service contract object list, and if this equipment has a serial number, this serial number is taken over into the service contract.

The following organizational structure and master data objects are required for the Service Contract Management processes that are implemented using this scope item:

• Organizational structure: sales organization
• Master data objects:
  • Business partner representing the customer
  • Employee master
  • Service (using a material master record)

The main organizational element that needs to be set up for the Service Contract Management (3MO) scope item is the sales organization. A sales organization in SAP is linked to exactly one company code. As the company code is the level on which a general ledger administration is run, using this link allows the system to know to which general ledger the accounting postings must be posted. An example of such an accounting posting is the customer invoice that is generated based on the billing request document.

In terms of master data records, for the customer for whom one or more service contracts are created, a business partner with the customer role is required. An employee master is needed for the (internal) employees for whom hours are posted to the service contracts. The services delivered are created as material master records with a special material type for services (known as service products or materials).

In SAP S/4HANA Cloud - Service, there is a flexible way of defining whether a service contract, a service quotation, and/or a service order is relevant for output. Rules can be defined for each type of document individually. As an example, the figure shows rules set up for a service order. This can be done in a similar way for a service contract and/or a service quotation.

The fields Error Status, Cancellation Status, Release Status and Open are available as columns in the decision table used to set up the output relevance for a service order. For a service contract, the field Error Status is available to do this. For a service quotation, the field Release Status can be used.

Note

This is very similar to the way this is set-up for service quotations. This topic is also covered in the course material for service quotations and for service orders. See also scope items Service Quotation (4GA) and Service Order Management and Monitoring (3D2).

Note

Since release 2308.2, output management for service contracts also supports XML as the output type for service contracts (in the Manage Service Contracts app.

In the area of analytics for service contracts, release 2208 of SAP S/4HANA Cloud introduced the so called Service Contract Performance Dashboard. See the unit about scope item Service Monitoring and Analytics (43B) in this course for more details.

You can use the following simulations to work your way through the main process steps for scope item 3MO:

ExerciseStart Exercise

If you want to test and use the functionality that is provided with scope item Service Contract Management (3MO), you need to assign business roles to your individual test users based on the following template roles:

The above table provides an overview of all the standard business roles that are used when testing and executing scope item Service Contract Management (3MO).

Note

This information is based on the test script for scope item Service Contract Management (3MO), which can be found on and downloaded from the SAP Best Practices Explorer website at http://rapid.sap.com.

These roles are provided by SAP as example roles. You can use these example roles as templates to create your own roles.