Learning the Configuration of Service Contracts

The following contract-specific data can be maintained at item level:

• Service level agreement (SLA) data: a service and a response profile
• Object list
• Service contract items with a value/quantity limit
• Product list
• List of released service orders
• Price Agreements
• Billing plan

Each service contract item can contain a list of objects for which the service item is valid. Objects are entered at item level in the area called Object List, and can contain equipment IDs, product IDs, and/or functional location IDs.

The Proposal for Product List button displays a list of the associated services and service parts for the selected reference object in the object list of the service contract item. From this list, these services and service parts can be transferred into the product list.

Based on Price Agreements, customers can be offered lower prices for services and service parts. Price agreements rely on the determination of relevant pricing information from the condition records for service contracts. Price agreements for service contract items can be created, edited, deleted, and displayed.

The following condition types (intended for service contracts) can be used:

• Material price in service contract (PSC0)
• Material discount in service contract (DSC1)
• Group discount of material price in service contract (DSC2)
• Discount on contract header level applying to all contract items assigned to service order items (DSC3)

When service contract items are assigned to service transaction items after service contract determination, prices from price agreements are applied to those items. To ensure that the mentioned price agreements work in a specific service transaction, the previously mentioned condition types must be included in the pricing procedure used for that service transaction.

A service contract item can also list the exact services (service items and service parts) that are covered by the contract item. A (service) Product List is used for this.

In the product list belonging to a service contract item, services and service parts are entered that belong to the service product, which is defined at contract item level. Product IDs being part of a product hierarchy are also supported. These services and service parts are then proposed and can be copied into a subsequent service order, when creating this service order as a follow-up step from within the service contract.

Configurable products can be used in service contracts as well. Based on the selected variant characteristics, the service contract price (that is, the variant price) is updated accordingly.

The following configuration settings are required to be able to use these configurable products:

• Enable the Classification view for material type SERV. Use the following menu path in Customizing: SAP Customizing Implementation Guide → Logistics – General → Material Master → Basic Settings → Material Types → Define Attributes of Material Types.
• Add condition type VASE (Variant Price) to service contract pricing procedure A10020. Use the following menu path in Customizing: SAP Customizing Implementation Guide → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define and Assign Pricing Procedures → Set Pricing Procedures.

Billing plans can be used to schedule individual billing dates for billing a service contract item, independent of the execution or delivery of the actual services and service parts mentioned in the service contract. Either the same amount can be billed at regular intervals (that is, a so-called periodic billing plan) or different amounts at specified dates that have been predefined can be billed (that is, a so-called milestone billing plan).

It is possible to select one billing plan that is valid for all the items in a service contract (that is, valid at header level), or whether different billing plans are relevant for the individual service items in a contact (that is, valid at item level).

The billing plan contains a list of billing dates. For each of these dates up to the horizon, the system can generate a billing document request. Each billing document request can then trigger the system to create a billing document for the customer when certain conditions have been fulfilled (using, for example, the billing due list).

The system determines the dates for the billing document requests based on general date information, such as the start and end date of the service contract. The general date information can either be copied from the header of the service contract or from the billing plan type. The system uses the following information when generating billing document requests:

• The settlement period of the service contract
• The billing dates determined

In the standard setup, a released service contract item is required before the creation of billing document requests can be triggered.

Item category SCNB (SC Itm (Ad-hoc Bil) is available for a service contact item, for which you want to allow the process of ad hoc billing. This means that it is possible to freely define billing values and dates for a service contract item using this item category. The net value of an ad hoc billing item can be specified by using the predefined price condition type for a manual item amount (PMV1).

In the item details, it is possible to maintain the dates on which billing should take place, and it is also possible to monitor how much of the contract value has already been consumed. When no more bills need to be created, the Billing Plan is Finalized flag needs to be set.

As stated, SLAs use service and response profiles. Defining service and response profiles can be done in Customizing. Navigate to SAP Customizing Implementation Guide → Service → Transactions → Settings for Service Transactions → Define Availability and Response Times.

Service and response profiles are not only available within service products. Assigning the correct service profile and response profile to a service transaction (such as a service request or a service order) is based on the SLA Determination Procedure in question.

This procedure is defined in Customizing, and then assigned to the relevant transaction type(s). An example of the contents of a SLA determination procedure could be:

1. Service contract
2. Business partner
3. Service product
4. Service organizational unit

For service and response profile determination in the example, the system would first check for a service and response profile in the service contract. If none is found, the system would then check in the business partner master record, and so on.

To define an SLA determination procedure, in Customizing navigate to SAP Customizing Implementation Guide → Service → Transactions → Settings for Service Requests → Define SLA Determination Procedures.

Contract pricing can also be based on the service and/or response profile determined. For example, a standard service contract price on service product level or an extra charge depending on the profile(s) determined. This can be realized using the so-called condition technique, as used in pricing.

To check the configuration of transaction types in SAP S/4HANA, in Customizing navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Define Transaction Types.

The standard transaction type in SAP S/4HANA for a service contract is SC (Service Contract). This transaction type has leading business transaction category BUS2000112 (Service Contract). It is also maintained for business transaction categories BUS2000115 (Sales) and BUS2000116 (Service Order/Quot.).

For this transaction type, the Doc. Proc.Proc. field (document pricing procedure) contains value S3 Service Contract, so that a contract-specific pricing procedure can be determined in the configuration of pricing.

A number range for number range object CRM_SVCONT (Service Contract) also needs to be defined and assigned to the transaction type used for a service contract. In Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Define Number Ranges and double-click the option called Number Ranges for Service Contracts.

To check the configuration of item categories in SAP S/4HANA, in Customizing navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Define Item Categories.

The following standard item categories are available for service contract items in SAP S/4HANA:

• SCN (Service Contract): the standard item category for a service contract item
• SCNA (SC Itm (Pri. Adptn.): to be used for a service contract item with price adaptation
• SCNB (SC Itm (Ad-hoc Bil): to be used for ad hoc billing plans to define billing values and dates freely
• SCNC (Value/Qty Contract): a service contract item with a value/quantity limit

For long-term service contracts, prices of individual items are usually determined once and then remain fixed throughout the entire contract duration. These prices are usually part of the agreement made with a customer. Item category SCN (Service Contract) is available for contract items to which this described behavior applies.

Flexible pricing for service contract items can be achieved by using the so-called price adaptation functionality. Item category SCNA (SC Itm (Pri. Adptn.) is available for this purpose. In Customizing, this item category has the Price Adaptation flag set. One method of flexible pricing is to set a required date (such as the billing date, the settlement start date, or the settlement end date) within a billing request line as the pricing date of the service contract item.

This can be done using a so-called pricing date rule (using the Pricing Date field in the billing plan type used). Such a rule is used so that varying prices can be determined for varying pricing dates. Alternatively, it is possible to maintain the prices of service contract items manually at billing request line level.

For the pricing date rule, the following pricing date options are available to determine prices:

• Item pricing date (for fixed pricing date)

• Billing date in billing request line

• Settlement start date in billing request line

• Settlement end date in billing request line

To define this, for a Billing Plan, go to the Settlement Rules. To set up a default pricing date, in Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Billing Plan → Define Billing Plan Types. Double-click the Plan Lines folder under Billing Plans. Look at the entries for the Pricing Date field.

Item category SCNB (SC Itm (Ad-hoc Bil)) can be used to define billing values and dates freely for service contract items. The net value of an ad hoc billing item can be specified by using the predefined price condition type for a manual item amount (PMV1).

Item category SCNC (Value/Qty Contract) can be used for a specific form of service contract items, in which the defined service products are restricted with regards to a certain target quantity or a certain total value.

Some examples:

• Service quantity items based on a certain target quantity, such as the use of a hotline or a repair service up to 10 times
• Service value items based on a certain target value, for example service parts and services for a total of 500 EUR
• Combinations of service value contracts and service quantity contracts

In Customizing for an item category such as SCNC (Value/Qty Contract), it is possible to define:

• Whether an agreed service product can be claimed only until the total value or the target quantity has been reached
• Whether the target quantity or the total value can be exceeded, but only one time
• Whether the target quantity or the total value can, in principle, be exceeded

The corresponding item category determination with item category SCN (Service Contract) as the default has also been configured in the system. This item category is determined for service products with item category groups SCNP (Service Cntrct Prod.) or SRVP (Service Product). Item categories SCNC (Value/Qty Contract), SCNA (SC Itm (Pri. Adptn.)) and SCNB (SC Itm (Ad-hoc Bil)) have been defined as manual alternative item categories.

To check this configuration, in Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Define Item Category Determination.

If, for the service contract determination in a service order, the system needs to filter and display only those contract items in which specific products or objects are assigned, the following settings on item category level need to be maintained:

If the No Filter option is used for these fields, the system finds and displays all contract items, including those with blank object/product lists.

As discussed before, for example, when discussing service order quotations and service orders, copying control settings for service contracts also need to be maintained. In Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Copying Control for Business Transactions → Define Copying Control for Transaction Types and look at, for example, the entry with source SC (Service Contract) and destination SC (Service Contract) (that is, copying a service contract) and also the entry with source SC (Service Contract) and destination SRVO (Service Order).

In terms of item categories, in Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Copying Control for Business Transactions → Define Copying Control for Item Categories and look at the entries with source item categories SCN (Service Contract), SCNA (SC Itm (Pri. Adptn.)), SCNC (Value/Qty Contract), and SCNB (SC Itm (Ad-hoc Bil)).

The setting SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Copying Control for Business Transactions → Define Item Category Determination when Copying contains entries such as source category SCN (Service Contract), target transaction type SC (Service Contract), and target item category SCN (Service Contract) or source category SCNA (SC Itm (Pri. Adptn.)), target transaction type SC (Service Contract), and target item category SCNA (SC Itm (Pri. Adptn.)), which are both used when copying service contracts.

Billing plans are controlled using the billing plan type. The configuration of a billing plan type can be found using the following: SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Billing Plan → Define Billing Plan Types.

Billing plan types can be assigned either to a transaction type (SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Billing Plan → Assign Billing Plan Type to Business Transaction Type) or to a combination of a transaction type and an item category used within that transaction type. For example, billing plan type 02 Periodic Billing can be assigned to transaction type SC Service Contract and item category SCN Service Contract. In Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Billing Plan → Assign Billing Plan Type to Item Category.

Item category SCNB (SC Itm (Ad-hoc Bil)) has billing plan type 01 Ad-hoc Billing assigned to it. This billing plan type has been set up specifically in the system to support the ad-hoc billing process, where net values of ad-hoc billing items can be specified freely by using the predefined price condition type for a manual item amount (PMV1).

The billing plan type to be used can also be determined depending on the business partner (that is, the customer) for which a service contract is created. This is done using a field called the Billing Plan Procedure. Entries for this field can be configured using: SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Billing Plan → Define Customer Billing Plan Procedure.

To be able to generate billing document requests, the system uses a sales document type (with an appropriate sales item category) in the background. The billing document requests are generated using a specific billing type. In the standard configuration in SAP S/4HANA, sales document type BSC (Service Contract BDR) is used with sales item category CS01 (Service Item eBDR) and billing type SVTB (Cust. Mgmt Service Contract BDR) for the billing document requests.

To see this, in Customizing, navigate to SAP Customizing Implementation Guide → Service → Basic Functions → Billing → Assign Service Transaction Types to Billing Document Request Types.

To see the definition of the sales document type, in Customizing, navigate to SAP Customizing Implementation Guide → Sales and Distribution → Sales → Sales Documents → Sales Document Header → Define Sales Document Types.

To see the definition of the sales item category, in Customizing, navigate to SAP Customizing Implementation Guide → Sales and Distribution → Sales → Sales Documents → Sales Document Item → Define Item Categories. Item category CS01 (Service Item eBDR) has entry B (Relevant for order-related billing - status acc.to order qty) for the Billing Relevance field.

Billing type SVTB (Cust. Mgmt Service Contract BDR), which is used for the billing document requests, can be analyzed using: SAP Customizing Implementation Guide → Sales and Distribution → Billing → Billing Documents → Define Billing Types.

Copying control settings from sales document type BSC (Service Contract BDR) to billing type SVTB (Cust. Mgmt Service Contract BDR) can be analyzed using: SAP Customizing Implementation Guide → Sales and Distribution → Billing → Billing Documents → Maintain Copying Control for Billing Documents. Select Define Copying Control for Sales Document to Billing Document.

Copying control settings from the billing document request (billing type SVTB (Cust. Mgmt Service Contract BDR)) to the billing type of the billing document, which is sent to the customer (F2 (Invoice F2)), can also be analyzed using SAP Customizing Implementation Guide → Sales and Distribution → Billing → Billing Documents → Maintain Copying Control for Billing Documents. Select Define Copying Control for Billing Document to Billing Document.

The following is a list of some other required settings in the context of service contracts:

• Pricing for service contracts is also set up in the system. Several specific pricing condition types for service contracts are available. There are also several specific pricing procedures for service contracts available. An example is A10020 Service Contract (DE). Another example is A17020 Service Contract (US). To analyze these pricing procedures, in Customizing, navigate to SAP Customizing Implementation Guide → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define And Assign Pricing Procedures, and choose IMG - Activity. Then, double-click Set Pricing Procedures.

  Pricing procedure determination for service contracts uses document pricing procedure S3 Service Contract, which is assigned to transaction type SC (Service Contract). In Customizing, navigate again to SAP Customizing Implementation Guide → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define And Assign Pricing Procedures, and choose IMG - Activity. Then, double-click Set Pricing Procedure Determination.

  To define entries for the document pricing procedure field (which is assigned to a transaction type), in Customizing, navigate to SAP Customizing Implementation Guide → Sales and Distribution → Basic Functions → Pricing → Pricing Control → Define And Assign Pricing Procedures, and choose IMG - Activity. Then, double-click Set Document Pricing Procedures.

  Note

  See unit 2 lesson 7 of this course for more details concerning the configuration of pricing for SAP S/4HANA Service in general.

• To enable service contact determination when creating a service order, the Contract Determ field in the definition of the transaction type used for the service order should contain an appropriate entry. Example: entry F Only at Item Level: Always With Selection Option states that the system is searching for a valid contract for a service order on item level, and will always provide the user with a selection option when a service contract is found. Entry E Only at Item Level: Assign Immediately if Unique would immediately link the service contract to the service order item if only one unique service contract is determined.

  In Customizing, navigate to SAP Customizing Implementation Guide → Service → Transactions → Basic Settings → Define Transaction Types to find the Contract Determ field in the transaction type(s) used for a service order.

• Cancellation configuration can be found using: SAP Customizing Implementation Guide → Service → Transactions → Settings for Contracts → Cancellation.

  Cancellation parties and cancellation rules are defined and then combined into a cancellation procedure. This cancellation procedure is then assigned to the relevant transaction type. Per cancellation party, a list of cancellation reasons can also be defined.

  As an example, transaction type SC (Service Contract) contains cancellation procedure 0001 (Standard Cancellation), which contains rules 0002 (3 months to End of Year) and 0001 (Desired date up to 2 wk after start date) (for cancellation party CNCT (Customer)). This is just an example of a cancellation procedure, and it can be copied into a customized procedure and adapted as required.

• When releasing a service contract, an internal order is created in the background, which is used as a cost collector for the service contract. Costs are posted onto this internal order, when service order items, which are assigned to the service contract item, are executed and confirmed. To post these service costs onto the internal order, transaction CATS: Transfer to Controlling (CAT7) is used (or scheduled).

  Note

  For more details concerning the configuration of the integration between SAP S/4HANA Service and Controlling, as well as the Cross-Application Time Sheet (CATS), see unit 2 lessons 5 and 6 of this course.

• For subscription contracts, existing business rule framework + (BRF+) applications/functions can be used to determine if a change process is available for such a subscription contract.

  The assignment of an existing BRF+ application is done in Customizing. Navigate to SAP Customizing Implementation Guide → Service → Transactions → Settings for Subscription Transactions → BRF+ → Assignment of BRF+ Applications.

  Note

  Open the Customizing documentation for this configuration node to see an overview of available BRF+ applications related to the maintenance of subscription product-specific data.

  Additionally, navigate to SAP Customizing Implementation Guide → Service → Transactions → Settings for Subscription Transactions → Contract Changes → Settings for the Maintenance Framework (BTMF) to enter the settings for the Business Transactions Maintenance Framework (BTMF). The BTMF offers a series of actions for a change process that a user can execute using their user interface using push buttons. The following are examples of these change processes:

  • Extend contract and undo extension
  • Cancel contract and undo cancellation
  • Change product

  For transaction type SC (Service Contract), the following BTMF change processes have been defined and activated related to contract renewal:

  • BLEX (Contract Renewal - One Item Only)
  • CRNH (Contract Renewal - Entire Contract)
  • CSLT (Change Sold-to Party)

You can use SAP Credit Management for service contracts, so that credit checks can be automatically triggered for business partners (payers) when a service contract is saved with status Released.

If you have activated credit management for service contracts, you can use the following major features:

• Automatic credit check upon saving a service contract
• Credit commitment update upon saving a service contract
• Credit commitment transfer between service contracts and billing documents
• Simulation of a credit check
• Rebuild of credit management data
• Auto renewal of service contracts when credit management is activated
• Integration with a documented credit decision (DCD)
• Automatic recheck of service contract items that have failed a credit check

All configuration settings related to using SAP Credit Management for service contracts, can be found using: Financial Supply Chain Management → Credit Management → Integration with Accounts Receivable Accounting and Sales and Distribution → Integration with Service.

Additionally, you must assign the SAP Credit Management Role (UKM000) and credit segment to the relevant business partners (payers).