Explaining the Process Steps and Business Roles for Procurement for Service Management

The process usually starts with the creation of a service order. The service order is created using the sales organization organizational element and it also uses the master data record for the customer. The service order contains one or more line items with a service material representing the service sold to the customer. The service order can be created in SAP S/4HANA Cloud Public Edition using the SAP Fiori user interface, or in the system using an API.

In procurement, the created purchase requisition for the non-stock material(s) can then be converted into a purchase order. This can be done manually or via a background job that is scheduled to be executed periodically. It is possible to configure and use an approval strategy for the created purchase order so that it needs to be approved before it can be sent to the vendor/supplier. This approval process can be supported by a (flexible) work flow to guide the document to the correct approver(s).

Once the service materials (that were procured externally from a vendor) have arrived, the goods receipt has to be posted in SAP S/4HANA Cloud Public Edition. This results in a subsequent update of costs posted against the service order line item for which the materials were bought.

The supplier will then send an invoice for the service materials bought. Upon receipt, this invoice needs to be entered in the SAP S/4HANA Cloud Public Edition. The supplier invoice posting can also update the costs again for the service order line items. A work flow can be used to approve previously parked supplier invoices.

Using an SAP Fiori app, the service order can be checked and the transaction history of the service order shows the created purchase requisition(s), the purchase order(s), the goods receipt posting(s), and the entered supplier invoice(s).

The materials bought from suppliers are referred to as non-stock managed materials or non-stock materials.

When the service order is released and saved in the database, the SAP S/4HANA Cloud system is able to automatically create a purchase requisition (PR) for any material assigned to a service line of the order as a non-stock material. Two types of processes for non-stock materials are supported:

• Non-stock material with a known source of supply: These are materials for which the vendor, price, and so on, are known and thus well defined as master data in the system.
• Non-stock material without a known source of supply: These are materials that are rarely needed or are of very low cost and therefore the vendor, price, and so on, are not available in the system as master data.

During service order creation for non-stock materials with a known source of supply, the system automatically triggers the creation of the purchase requisition and assigns the valid source of supply. This is done via a master data record called a source list. The system should also automatically fetch the correct pricing elements. This is done via a master record called a purchasing info record. This purchase requisition can then be converted into a purchase order (PO) manually or via a background job scheduled to run automatically at predefined intervals.

For non-stock material without a known source of supply, the generic material description entered in the service order is replaced by a specific material (service part) description and the valuation price of this material is entered manually. This is done to enable the automatic creation of the purchase requisition. The manual input enables the procurement department to order the correct part(s).

The following master data objects are required for the integration processes between procurement and service management, which are implemented using this scope item:

• Business partner representing the customer
• Business partner representing the supplier
• Service (using a material master record)
• Purchasing info record
• Source list

The business partner functionality of SAP S/4HANA Cloud Public Edition is used to maintain both customer and supplier master data records in the system.

The services delivered to the customer are created as material master records with a special material type for services (known as service products or materials). The same type of master record is used for the materials bought from the suppliers (as non-stock materials).

The purchasing info record contains all the pricing agreements made with the supplier concerning the materials bought (validity periods, gross prices, discounts, freight costs, and so on).

A source list is a master data record that is created for a material in a plant. It is used in automatic source of supply determination. It is possible to flag a supplier in the source list as the fixed source of supply for a material for a certain validity period. This supplier will then automatically be assigned as the source of supply to the purchase requisition created from the service line that contains the (non-stock) material.

You can use the following simulations to work your way through the main process steps for solution process Procurement for Service Management (3NI):

The above table shows the required business roles for testing and executing scope item Procurement for Service Management (3NI).

These roles can be used as a template to create your own business roles for your business users working with Procurement for Service Management (3NI).