Agenda: This blog is an attempt to see an SAP IT Service from a service provider’s perspective. There are so many blogs detailing and sharing their experience from a consultants stand point. Let me try a to see from a different angle
We say we are in projects like implementation, enhancement, roll out , support, product development etc.
Do we know how an IT Service provider treats this?
Basic awareness on IT Business
SAP IT Business Process
- Pipe line analysis
Before we receive a project, there will be an inquiry and it will have a probability. The 100 % probability means the projects means the client have awarded us the project.
- Project delivery:
Once a Company gets the project from a client .People will be allocated to the work and do the delivery. (Assumption: project plan and all are in place)
- Revenue recognition and Billing:
Revenue will be recognized every month and Billing to the client will be made as mentioned in the SOW /MSA/LOI etc.
- Cash collection (ref. Day sales Outstanding – DSO):
How many day a company’s billing converted to cash
- Project closure:
Project is officially closed or the validity of the contract ends.
- CR or extension:
New project will be initiated with a new start date and end date . It may also incorporate rate change/ role change , working period etc.
The below all the legal agreement which allows us a vendor to engage work with a client.
MSA: Master Service level Agreement
SOW: Statement of work
LOI: Letter of indent
PO: purchase order
Please note: I have given things in high level detail only. You can google to see details if you want to know more.
Please let me know if you have any question .