Introducing Service Contract Management (3MO)

After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Learn the scope of Service Contract Management (3MO)

Introduction to Service Contract Management (3MO)

How to access the process flow (if available) and test script for solution process Service Contract Management (3MO)

Complete the following steps to access and download all the documentation that is available from SAP for scope item Service Contract Management (3MO):

  1. Navigate to the list of solution processes on the SAP Signavio Process Navigator website. Use URL and choose Solution Process. You can now see a list of all available solution processes.

    Log on to SAP for ME if needed.
  2. Using the Search in SAP Signavio Process Navigator field (in the top right corner of your screen), search for solution process 3MO.
  3. In the resulting list, select the entry for the current (i.e. the most recent) version of the solution process for solution scenario Best Practices for SAP S/4HANA Cloud. You can now see the details for the solution process.
  4. Choose Accelerators.
  5. Choose Test Script to download the test script as a Microsoft Word file, and open this file.
  6. If available, choose Set-up instructions to open the set-up instructions for the solution process.

Service Contract Management (3MO)

This scope item from SAP S/4HANA Cloud - Service describes the creation of service contracts in SAP S/4HANA Cloud along with additional capabilities.

You can use the navigation buttons in the bottom right corner to see what Craig has to say about service contracts in SAP S/4HANA Cloud:

The link between a service order and a service contract is also available for reporting purposes.

Price adaptation for service contract items is another important option provided in scope item 3MO. This means that a certain item doesn't maintain its price over the whole duration of the contract, but that adaptation of this price is possible for that specific (price adaptation) item. Price adaptation items use a special item category in a service contract. Price adaptation can also be defined via settlement rules in a billing plan. The price to be considered can then be maintained manually on billing request line level.

A separate topic is available in this course/unit concerning price adaptation items in service contracts.

Value proposition

  • Understand and increase profitability by using service contracts.
  • Increase service margin with reduced revenue leakage through long-term agreements with customers.
  • Increase service revenue through strong long-term relationships with important customers.

Key capabilities

  • Create or change service contracts in SAP S/4HANA Cloud.
  • Monitor, cancel, and release service contracts and service contract items.
  • Automatically execute periodic billing to manage recurring revenue streams based on service contracts.

Key process flows

  • Create a service contract by using the UI or an external interface.
  • Define a customer-specific price agreement. You can also do this on header level in the contract: use condition type DSC3.
  • Release a service contract without errors.
  • Create a service order and select a service contract by using contract determination functionality.
  • Confirm a service contract: price and service contract details are considered.
  • Adapt a price manually (for a price adaptation item, on billing request line level, and adjust the settlement rules in a billing plan); the manual price is considered (as defined in the date rule) and the price is considered for billing.
  • Enable auto renewal for service contracts based on a predefined time frame, on a predefined date, for expiring contracts not canceled within the time frame.
  • View expiring contracts and the top five contracts in analytics.
  • Get details of both a service order and a service contract in reporting.
  • Create a credit memo against the invoice for a service contract.

Business benefits

  • Creates a service contract from the user interface (UI) and also using an external interface.
  • If needed, various price adaptation possibilities are available in service contracts.
  • Price agreements (like gross price and discounts) in service contracts are available. Both on header and on item level.
  • Service contract determination is available in service orders.
  • Auto-renewals for service contracts is available.
  • Supports the creation of a credit memo against an invoice for a service contract.

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