Working with Service Contracts

Objectives

After completing this lesson, you will be able to:

  • Describe, create, and process Service Contracts

Service Contract

Service Contract: Overview

The features of a Service Contract are as follows:

  • Represent an outline agreement with customers that defines content and scope of services, under specific conditions, for a particular period

  • Specify the service levels to which a customer is entitled

  • List the parts that are covered by contracted services (for example, server, workstations, and printers)

  • Include a product list containing services and service parts in contract entitlement

  • Contain price agreements for services and parts

  • Limit contracted services or service parts in terms of value and/or quantity

A service contract is a long-term agreement with business partners that specifies which services are being offered for that period. The service contract item lists customer objects, typically pieces of equipment, that are covered by the contract item.

Service level agreements list the level of service to which a customer is entitled and contain functions for monitoring compliance with those terms. A contract may include contract-specific price agreements that control not only what is covered by the contract, but also what prices may be charged for any work covered by that contract.

Service Contract Details contain the following information, which refer to the whole contract including all items:

  • Sold-To Party

  • Dates

  • Status

  • Responsibilities

  • Price Agreements

Items contain the following information which are item-specific:

  • Products

  • Conditions

  • Service Profile

  • Response Profile

  • Status

  • Technical Object

  • Price Agreements

Create a Service Contract

In the following you will see how to create a Service Contract.

Bill a Service Contract

In the following you will see how to bill a Service Contract.

Service Contract: Assignment of Service Orders

According to the Customizing settings, when creating a service process with a transaction type for which contract determination is activated, you are either requested to select a contract or the system determines the contract and copies it to the transaction automatically. For successful contract determination, the following criteria must be fulfilled:

  • Partner: The sold-to party in the service contract and the service process must be identical.

  • Sales and Service Organization: Sales and Service Organization in the service contract and the service process must be identical.

  • Status: The status of the service contract item must be Released.

  • Validity: The date in the Requested Start field in the service process must lie within the validity period of the service contract item.

  • Object List: In standard Customizing, contract determination runs in the following sequence:

    • Contracts are found that have reference objects entered for the business transaction item in the object list of the service contract item, or that have an empty object list for the service contract item.

    • If no reference objects were entered for the business transaction item, contracts are found that have the reference object for the business transaction header entered in the object list of the service contract item, or that have an empty object list for the service contract item.

    • If the reference object was not entered in either the business transaction item or in the business transaction header, service contract items with empty object lists are found.

  • Product list: The product in the business transaction item must be entered in the product list of the service contract item, or the product list of the service contract item can be empty.

  • Copy control: The copy control for item categories must be set in Customizing.

Services and service parts available with a selected contract are proposed by copying to a service order. A release order list shows the history of service orders relating to value/quantity of service contract items.

Create a Service Order linked to a Service Contract

In the following you will find out how to create a Service Order related to a Service Contract.

Service Contract: Additional features

When creating an item in the service contract with item category Ad-hoc Billing, in the item details the billing plan view changes. You can maintain the dates on which billing should take place, and you can monitor how much of the contract value has already been consumed. When no more bills need to be created, you can choose the ‘Billing Plan is Finalized’ option.

Situation Handling

Situation Handling helps your business to run smoothly by automatically informing the right users about any situations that need their attention. This includes, for example, upcoming deadlines, delays, expiring contracts, and so on.

Situation Handling enhances SAP S/4HANA Service functionalities by informing end users about relevant or critical situations, for example, displaying Service Contracts which will expire during the next 2 months.

Manual Service Contract Renewal

The Manual Service Contract Renewal is available at the following:

  • header level: You can use this change process to extend the validity period of all items contained in a released service contract.

  • item level: You can use this function to create a follow-up item in the system when a service contract item ends.

Service Contract Cancellation

To determine when, why, and by whom a contract can be canceled, you can define a cancellation procedure that contains information about the cancellation parties, cancellation dates, and cancellation reasons.

Use Ad-hoc Billing for Service Contracts

In the following you will find out how to use Ad-hoc Billing for Service Contracts.

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