SERVICE CONTRACTS- KEY ELEMENTS

A service contract is a long-term agreement that contains the following key ingredients:

• Type of service contract –Gold, Silver, Maintenance, Repair, represented by products in the Product Master
• Products purchased by the customer that the contract covers (Object List)
• Types of services/spares that the contract includes (Product List)
• Service Level Agreements (SLAs) –Service Profile and Response Profile
• Pricing agreements (special prices for services/spares as agreedupon with the customer)
• Pricing conditions (service contract price)
• Billing parameters (one-time vs. billing plan)
• Period of coverage
• Cancellation procedure
  Automatic contract validation during service processing and escalation management when breaching SLAs
• Rule-based pricing, billing, and accounting of warranty costs
• Possible to have a quotation before creating actual contract
• Integration into FI-CO for revenues from the billing plan and costs from service orders created against the contract.

ENHANCED FUNCTIONS:

• Service contracts can be limited by quantity/value and the call-off list can be viewed from the contract itself
• Service plans can be used to generate and track periodical service/maintenance plans
• Service agreements allow the sale of “corporate” service contracts
• Support for payment by credit, debit, and other payment cards when using SAP ERP Billing
• Usage-based billing (Pool Contracts)
• Warranty Claim Management using CRM Case Management
• Improvements to service plans

Comparison with SAP ERP

• SAP CRM service contracts can be managed better than SAP ERP contracts, as renewals can be managed as new line items within existing contracts
• Revenue Recognition (time and service) in conjunction with SAP ERP Controlling
• Prerequisite –use of Internal Orders in SAP ERP
• Billing possible in SAP CRM or SAP ERP
• Contracts can be defined at the IBase, IBase Component, or iObject level
• Product List defines which services are covered by the contract
• This list can be flexibly defined by a combination of products, product categories, and partner product ranges (with exclusion rules)
  It’s possible to set up one contract with different line items representing different contracts you have for the customer and the equipment
• For example, you can have a regular contract line item, a quantity/value-based contract item, and a service plan item (PMI) all in the same contract
• Strong integration into SAP ERP FI-CO for billing and costing as in SM
• Several SAP NetWeaver® Business Intelligence (SAP NetWeaver BI) reports are available that analyze a contract and its profitability.

Migrating from SAP ERP

• There is no standard download program for SAP ERP service contracts migrating into SAP CRM contracts
• Either a custom download will have to be created or the contracts will have to be migrated manually
  • Prerequisite to running a custom download would be to download the equipment master
• Due to the flexibility of SAP CRM contracts, the mapping from SAP ERP to SAP CRM can be designed in many different ways
• Therefore, SAP does not provide a standard download