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SAP Service Management -Introduction and Business Process Overview

Integrations aspects of SAP Service Management with other modules of SAP


Business Processes in Service Management

I. Service with Time & Material Billing

Service is provided after customer reports the problem. Technician is dispatched to customer’s location where
equipment is located. After work is performed and repair is finished, customer is billed based on time and material spent on repair. Quotation may be given to customer based on estimated costs of repair if required.

II. Service under Contract

A Service Contract is signed with
customer that details scope of services covered within certain period. Any
service performed in that period is bound by terms of the contract. Service
could be a planned activity e.g. preventive maintenance or  Service could be provided after customer
reports the problem e.g. corrective maintenance. Technician is dispatched to
customer’s location where equipment is located. Customer may or may not be
billed based on terms of the contract.

III. Service under Warranty

When new equipment is sold to customer
typical Warranty
is applicable for that equipment. During this warranty period service
is provided without any charge.  Within
warranty period replacement may be given to customer in case equipment is not
repairable. Typically costs of repair when product is under warranty are
tracked separately than other repairs since they are closely related to product
design and performance.

IV. Returns Repair

Sometimes it is not possible to carry out
repair at customer’s site for some reasons e.g. repair requires specialized
machinery not available at site. In such cases equipment is brought to repair
facility. Once repair is finished same equipment is then sent back to customer.
During entire process, equipment is present on company’s premises but it is
legally owned by customer. Customer may be billed a fixed price or based on
resources consumed.

SAP Enterprise Structure


  • Company Code
  • Sales
  • Sales Organization
  • Distribution Channel
  • Division
  • Plant Maintenance Planning Plant
  • Storage Location

Important Master Data Objects:

Master Warranty :

Transaction codes – BGM1- Create/2 Change/3 display.

Warranty Master is used by Plant Maintenance and Service Management only.


Warranty Master records information about duration of warranty and how it is applied.


Warranty Master is not directly used in any scenario. Warranty is applied to an
equipment after it is sold to customer.


Functional Location :

Transaction codes – IL01-create/2 change/3 display.

Functional Location represents customer location where actual equipment is located.

Functional Location hierarchy can be used to create structure of actual physical location.
E.g. Rooms on floors inside building within campus.

Functional Location tells technician where to look for equipment when they go onsite.


Each functional location is assigned basic partners – sold-to, ship-to and bill-to.

Equipments are ‘installed’ at functional locations.

Assigned Tags

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      Author's profile photo Satyendra Mittapalli
      Satyendra Mittapalli

      Hi Amlan,


      Do you have more information on this module implementation? We got a requirement of implementing the Service Management module to one of my client. Need your help on this.